united-states

UCC §2-314 - implied merchantability

Selling a car implies that it can be used as a motor vehicle and qualifies under whatever test a state wants to impose on a motor vehicle. The vehicle posed by OP - failing to brake, shaking front axle and otherwise complete junk - does not qualify for those. So unless the sales contract contained an 'as is' clause, we got a case of implied merchantability under the UCC, incorporated in 49/50 states wholesale and as much as possible in Louisiana.

The contract can be voided under it, meaning the salesman needs to pay back the buyer and take back the chunk of junk. Or the salesman can be forced to make the car work to work as well as they represented it would. An inspection sticker would mean that the seller implied it passes the inspection, so that is the standard the car has to succeed in or violate the implied merchantability.

Unfair and deceptive trade practice

Further, selling a car as working or fit for use when it is not, such as through misrepresentation or silence on the issue, can trigger state laws on unfair and deceptive trade practices. Those generally allow voiding a contract and recovering damages.

Reckless endangerment

Selling a car that is unfit to be used as one might qualify as reckless endangerment, such as New York Penal Law §120.20 (“Reckless Endangerment in the Second Degree”). That would be a criminal case against the seller of the car.

Forgery and fraud

Creating a false test plaque that the junk car passed testing would be forgery, which is a criminal felony.

Similarly, misrepresenting that the vehicle passed the inspection would be fraud against the next buyer, and also a criminal felony.

What's an as-is clause?!

The united-states allows one to sell a used item "As is", disclaiming all implied merchantability under the UCC and warranties. Selling "As is" even extinguishes a lot of civil remedies. It does not block a case of reckless endangerment or forgery for applying unjustified inspection stickers though.

canada

(Note: the question has since been edited to add facts not initially part of the scenario. This answer addresses an earlier version of the question.)

I understand the circumstance as follows:

• The car dealer represented to a buyer that the car dealer obtained inspection stickers for the car
• The car dealer sold the car to the buyer
• After the sale, the buyer discovered that the vehicle is "complete junk" in such a way that made driving unsafe for the buyer/driver and those around them
• This causes "consternation and fright"

You say the buyer "wants to sue," so I understand you to be referring to personal remedies rather than criminal law.

This answer describes the common law and statutes that would apply in Canada.

Common law: a contract claim may be available

The contractual remedies would not be about "consternation and fright."

If the buyer can also establish that the car dealer in fact did not obtain inspection stickers, or that the car dealer knew that the inspection stickers they obtained did not accurately reflect the condition of the car, there is an arguable misrepresentation claim. A common remedy in this circumstance is rescission (undoing the deal).

If the buyer can establish that the car dealer did not deliver what they promised they would deliver (a properly-inspected vehicle), ordinary damages would generally be limited to the difference in value between what the buyer received and what they would have received had the car dealer had lived up to their promise of providing a properly inspected vehicle.

As always, punitive damages may be awarded depending on the circumstances.

Common law: torts of negligence and/or negligent misrepresentation are not likely available

Without damage, there is no cause of action in negligence or negligent misrepresentation.

While damages can include psychological injury (Mustapha v. Culligan of Canada Ltd., 2008 SCC 27, para. 8) "consternation and fright" is not necessarily damages for the purpose of negligence. See Mustapha, para. 9:

psychological disturbance that rises to the level of personal injury must be distinguished from psychological upset. Personal injury at law connotes serious trauma or illness. ... The law does not recognize upset, disgust, anxiety, agitation or other mental states that fall short of injury. I would not purport to define compensable injury exhaustively, except to say that it must be serious and prolonged and rise above the ordinary annoyances, anxieties and fears that people living in society routinely, if sometimes reluctantly, accept.

There are also statutory causes of action under consumer-protection statutes

Every jurisdiction in Canada has a consumer-protection statute that would provide a statutory remedy in the circumstance described. It would not be a remedy for the "consternation and fright" but rather, for the simple act of selling something under a false, misleading, or deceptive representation. For one example, see Ontario's Consumer Protection Act, which specifically lists the following as false, misleading, or deceptive representations:

A representation that the goods or services are of a particular standard, quality, grade, style or model, if they are not.

Remedies under Ontario's Consumer Protection Act include rescission, damages, and exemplary damages.