A Seller’s Guide to Understanding Your Liability in California

There is a lot to consider when selling your car in California. One of the biggest questions to consider when selling to a third party is whether you retain any liability for the car after the sale is closed.

Record your sale in writing

Whether you’re selling a car that’s only a few months old or a few decades old, you need to protect yourself. If the car breaks down soon after the sale, the buyer may try to hold you responsible for the cost of repairs and, in some cases, even sue you for those costs.

As an initial matter, California requires that sales for a price of $500 or more be made in writing (Section 2201-2210). The rationale for the requirement is to prevent fraud by requiring parties to document transactions. That way, if there is a dispute about any part of the sale, the parties (or a judge) can refer to the terms of the brief for further clarification.

Beyond what is required by California law, it is common sense for you as the seller to have something in writing documenting your sale, even if the amount is less than $500. As with California substantiation law, it is always good to commit the terms of a sale in writing. That way, if any dispute arises, there is no question, the terms of control of your document.

So whether you’re selling your car for $500 or more and need to record the sale in writing, or your sale is for less than $500 and you’re a smart, responsible seller, you’ll need a document that records the terms of the sale. the sale of your car. This document, also called a bill of sale, is common, and with a little research, you should be able to find a great one online.

Sale as is vs. limited warranty

The next step in protecting your liability is knowing the extent of your liability. There are several ways that your responsibility, for example, being aware of the cost of future repairs, could extend beyond the sale. First, you could write it into your contract as an added incentive for the buyer.

Second, if your bill of sale doesn’t mention the subject, California law may impose certain warranties on the sale of your car, such as a warranty of fitness. Simply put, a warranty of fitness means that if a buyer relies on the seller’s “ability or judgment” “to select or provide suitable property,” the property must be fit for that purpose (California Commercial Code 2315). Put another way, if you say the car will work and it breaks down the next day, the buyer could sue you for violating California’s definition of the warranty of fitness.

The easiest way to avoid future liability for things like the cost of repairs is to make your sale “as is.” An “as is” sale is one in which the buyer purchases the item with all future faults and liabilities, that is, the buyer assumes responsibility for all future repairs to the vehicle. It is important to note that your bill of sale must indicate in very clear and distinguishable terms (make the phrase “as is” in bold and large type), that the sale is as is.

Good luck with the sale of your car!

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