Court of Appeals Exempts Car Company from Liability for Late Delivery and Price Increase

In “Biggeri, Patricio Hernan c/ Viel Automotores S.A.C.I.F.I. y otro s/ Sumarísimo,” a plaintiff sued an authorized dealer and well-known car company for failure to comply with a contractual trade agreement involving of a 4-month delay in delivering the car in question and a 25% price increase.

The trial court partially granted the petition, ordering the dealer to compensate the plaintiff for the claimed price difference (AR$ 34.344) and non-material damages (AR$ 13.000), plus interests. But, at the same time, the court rejected the claim against the car company in full.

The plaintiff and the dealer appealed the trial court’s decision. In addition to other defenses, the plaintiff contended that the court’s decision should have been extended to the car company as well. While the dealer argued that it had no standing to be sued on account of being just a “commercialization channel” for the manufacturer and acting as a commercial agent. The dealer also argued that only one agreement had been entered into and that was between the plaintiff and the car company. Furthermore, the price had been determined by the manufacturer and delays had been linked to external causes, including difficulties posed by import regulations.

In its March 11, 2021 judgment, Division F of the Commercial Court of Appeals upheld the trial court’s judgment on the grounds that the dealer had standing to be sued. The Appeals Court further determined that both defendants were bound by a license agreement but not by an agency agreement, adding that the main difference between them is that agents act as mere intermediaries who promote businesses in favor of a company, without the power to conclude business on its behalf. However, because “Viel Auomotores” (i.e. the dealer) would acquire cars from the car company for the purpose of trading them, the kind of agreement in question was a license agreement.

The Court of Appeals further held that the car company was not  liability because the joint liability applicable to every participating party in a distribution chain under section 40 of the Consumer Protection Law only applies in cases of damages caused by hidden defects of the acquired goods. The Court further added that the culpable act was not the delay itself (arising out of alleged import hurdles), but rather the insufficient or inadequate information provided by the dealer about the date of delivery. The evidence demonstrated that the timeline of the delivery of units from the manufacturer to the dealer was independent from the sale of the latter.

Lastly, the Court of Appeals admitted the punitive damages claim against the licensee, which had previously been rejected by the trial court. It further added clarifications about the different kinds of liability that arise from license and agency agreements and the scope of application of Section 40 of the Consumer Protection Law.

Read the judgment in full (in Spanish).