SELLING: Caveat Venditor

The Kentucky court of appeals last week handed down a decision that was enough to give pause to used-car dealers. The court ruled, in effect, that a used-car dealer must tell his customer about defects in a car that "make it a menace to the public," or else be liable for any damage the car may cause.

The case involved Gaidry Motors, of Lexington, which sold a used car to William Hensley. He drove it 14 blocks, and as he stepped on the brakes approaching an intersection, the brakes grabbed and locked. The car skidded wildly into a curb and...

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