Michigan Court of Appeals Limits Misrepresentation Claims Against Automobile Dealers

In a recent unpublished Michigan Court of Appeals decision, the Court significantly limited the ability of a plaintiff to assert a misrepresentation claim against an automobile dealership.  In Seltz v Ford Motor Co, unpublished per curiam opinion of the Court of Appeals (Docket NO. 341700, issued Nov 5, 2019), the Court observed that, unless an allegation of misrepresentation is based on the terms of the contract–usually a purchase agreement–there can be no claim for misrepresentation.  This issue often arises when an automobile purchaser claims misrepresentation based on the oral statements of a salesperson.  But where such a contract to purchase an automobile contains a valid merger clause, there can be no claim for misrepresentation unless the misrepresentation is based on the terms or contents of the contract itself.  The merger caluse in Seltz stated: “I understand that the front and back of this order comprises the entire agreement . . . .”  The inclusion of such a clause in the contract precluded a misrepresentation claim based on pre-contractual, oral statements.

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