The operative principle is that fraud vitiates (negates) consent. When a person is induced to enter a contract on the strength of fraudulent misrepresentation, the standard remedy is rescission of the contract. The contract is deemed rescinded and the parties are restored to their position prior to entering into the contract.
Now we have a situation involving vehicles equipped with Volkswagen's vaunted "Clean Diesel" or TDI engine.There are many like me who bought the vehicle because of its advertised low emissions and fuel economy. It turns out we were sold a bill of goods.
Volkswagen used a software trick to contrive the low emissions and fuel economy. When emissions testing equipment was being used the engine detected what was going on and responded by turning on the full emissions-control system. In ordinary operation part of the emissions-control hardware was deactivated to give increased performance and fuel economy.
It was a deliberate deception. Government regulators were deceived and so too were purchasers of the Volkswagen vehicles.
VW was exposed by the US Environmental Protection Agency which ordered half a million vehicles recalled and slapped the company with a multi-billion dollar fine. Presumably criminal prosecutions will follow. Somebody hatched this scheme. Software was written and installed in these vehicles. Results were fabricated to mislead regulators and customers alike.
And what of those half-million plus customers? There will be no cheap and dirty fix for this. Their vehicles, once highly regarded, are now infamous in the sort of way that tears the bottom out of market values. They too have been defrauded. They too will claim damages from the manufacturer, possibly the dealers also.
CBC News is reporting that Volkswagen Canada has issued a directive to dealers to stop selling certain models effective today. That's a start.
I'm figuring there'll be one if not several class action lawsuits filed against VW. Where do I sign up?