I think honesty is worth its weight in gold. Accidents do happen. Occasionally accidents also result in better dogs than you get with planned breedings :P (For the record, I've never had an accident -- I've never had an intact bitch and stud dog!)
The lack of health testing is a negative, but compared with the overall setup, based on what you've said here, I'd feel comfortable with this breeder. If the dogs behind these parent dogs are generally sound, you've got more information than many people have.