Status grades are finding their way into case law: Higher Regional Court Frankfurt 02 November 1988 (17 U 148/87)
In a decision of 2 November 1988, the Frankfurt Higher Regional Court had to deal for the first time in German legal history with the question of what significance condition notes have in the sale of a classic car.
The subject of the legal dispute was a Jaguar XK 140 FHC built in 1956.
On 28 February 1986, the plaintiff had purchased the car from the C. Agentur, a company under civil law whose shareholders included the defendant 1), at a price of DM 42,000.00. The vehicle had been included in the catalogue of the C. Agentur and was listed as being in condition 1 to 2. The plaintiff had conducted the negotiations with the defendant 1). However, the purchase contract was not concluded with the C. Agency or one of its partners, but with a third party (F) as the seller. The C. Agency was designated as an intermediary in the purchase agreement.
During the test drive, the plaintiff discovered various defects, which were recorded in the purchase contract (including "rev counter and odometer out of order, ignition lamp permanently lit"). The defects were to be rectified by the defendant 1) before handover.
The standard form purchase contract also contained a reference to the fact that the sale of the vehicle was subject to the warranty provisions printed on the reverse of the contract form. According to this, any warranty should be excluded unless the contracting parties have agreed otherwise.
After conclusion of the purchase contract and handover of the vehicle, whereby the defects that had occurred during the test drive had previously been rectified, further defects occurred. The plaintiff therefore demanded an amount of DM 16,870.61 from the defendant 1) to remedy these further defects.
The competent regional court had dismissed the action, whereas the Frankfurt Higher Regional Court upheld the action on the merits.
The Frankfurt Higher Regional Court affirmed the passive legitimisation of defendant 1) on the basis of the custodian liability of C. Agentur and the personal liability of defendant 1) as a BGB partner.
The Frankfurt Higher Regional Court commented as follows on the question of the legal significance of the condition note given at the time of purchase:
"But even if the warranty provision ... of the general terms and conditions were included, the liability of the defendant would be justified because he culpably warranted a non-existent property of the car sold, namely "condition 1 to 2" (see Reinking/Eggert, para. 994).
Although this assurance is not included in the standard form purchase contract, it has become part of the contract on the basis of the defendant's catalogue description, which he still considers to be correct in the legal dispute.
The defendant's catalogue description, like the indication of a certain mileage or the reference to the absence of accidents, constituted a binding declaration by the defendant of recognisably decisive importance for the plaintiff's decision to purchase and thus a warranty of a characteristic.
Contrary to the defendant's assertion in the legal dispute, the condition classifications of classic cars are not non-binding advertising claims such as "as good as new", "first-class condition, very nice" or similar. It is already clear from the defendant's catalogue that such a description of condition was only given for a few of the vehicles on offer. It was therefore obviously a very specific description of the condition of the vehicle in question.
By submitting publications, the classic car catalogue by Schrader, the magazine Motorklassik, July 1987, and the magazine Markt für klassische Automobile und Motorräder, October 1987, the plaintiff proved that certain value levels, categories or condition grades from 1 to 5 apply to classic cars and are decisive for pricing.
For example, the classic car catalogue states: "Value category 2 applies to vehicles that have been restored to an excellent standard but are not quite top class. ..."
In the magazine Motorklassik it says, specifically for a price overview of Jaguar models: "Category 2 - good but not immaculate condition, professionally restored or - much rarer to find - original; ..."
The "Classic Car Market" states: "Grade 2: Good condition ..."
In "Motorklassik" July 1987 there is a price overview for Jaguar cars according to the above-mentioned condition categories; there, for example, the market price of a Jaguar XK 140 (DHC) in category 2 is given as DM 45,000, in category 3 as DM 30,000 and in category 4 as DM 15,000. For other Jaguar models, similar significant price differences are shown between the individual condition categories. A corresponding list for vintage Volkswagens also shows price differences of at least 20% between the individual condition grades.
This demonstrates the considerable importance that is attached to dealer information about a certain condition category or condition grades on the classic car market."
The Frankfurt Higher Regional Court made the following findings regarding the condition of the Jaguar at issue and the assignment of a condition score:
"The photographs submitted by the plaintiff of the disputed car in a partially dismantled state, the authenticity of which the defendant has not disputed, allow the Senate to judge that the car sold by the defendants to the plaintiff did not correspond to the warranted condition category 1 to 2 in any case due to the considerable rust penetration recognisable in the photographs. It is irrelevant that these rust penetrations were located on the underside and in the wheel arches and were not easily recognisable from the outside, especially if, according to the plaintiff's claim, they were concealed with filler. It is equally irrelevant whether the defendant was aware of these
rust perforations were known. He was responsible for the description of condition 1 to 2, which he made without any restrictions and according to which such rust damage must not be present. If the defendant, as he claims, relied on the shiny external appearance, this is also irrelevant for his liability due to the lack of the warranted vehicle condition 1 to 2."