I rented a car from a friend for a month and on Erev Shabbos while on my way to the Catskills I realized that the air conditioner wasn’t working. Since there wasn’t time to return the car, I used the car over the weekend and returned the car on Monday.
Q: Do I have the right to cancel the rental agreement?
A: Renting a car is similar to purchasing a car; therefore once a kinyan was performed neither party may cancel the transaction. However, if the rented car is defective (see C.M. 232:6 for parameters regarding defects), the lease is voided the same way a sale is canceled if the merchandise is defective.
If a customer uses the purchased merchandise after noticing the defect he forgoes the right to cancel the sale since use of the item while knowing it’s defective constitutes acceptance of the item as is (C.M. 232:3). The question is whether that principle is applicable in your circumstance.
There are numerous reasons why your use of the car does not prevent you from canceling the lease.
Some employ the following reasoning. One who uses an object without permission (shoel shelo midaas) is a thief. Therefore, if the customer intends to cancel the sale due to a defect, the object actually belongs the merchant. Use of that object is an act of theft and so we assume his intent is to maintain the sale rather than steal the merchandise (Galya Maseches cited in Pischei Teshuvah 232:1; Divrei Geonim 6:10). This rationale, however, is limited to sales when there is no indication that the seller would permit anyone to use his possessions. Regarding a rented item, even if the customer intends to return the defective merchandise it is assumed that the owner does not mind if the customer continues the rental agreement since that allows him to collect rent.
Secondly, he will have a difficult time finding someone to rent his object now that he is aware of its defect, and the current customer provides for him easy income (Teshuras Shai 285; cf. Pischei Choshen, Sechirus 6[29]).
Other authorities contend that there is no difference between a sale and a rental, and if the customer uses the item after realizing the defect he forgoes his right to cancel the rental (Raanach 40 referenced by Shach 232:3).
In your circumstance all opinions agree that you did not forgo your right to cancel the lease by using the car. If one rented a horse to travel to another city and in the middle of the journey realized that the horse was defective, he does not forgo his right to return the horse by riding it back to the owner. The reason is that he had no choice but to ride the animal back and thus nothing regarding his intent can be inferred from his behavior (Pischei Teshuvah 232:1). In your case since there was no time for you to return the car before Shabbos, your use of the car that weekend does not prevent you from canceling the rental agreement.