Source: https://library.nclc.org/cwl/010207-0
Timestamp: 2020-07-10 07:32:39
Document Index: 283134253

Matched Legal Cases: ['§ 2301', '§ 2302', '§ 2303', '§ 2304', '§ 2305', '§ 2306', '§ 2307', '§ 2308', '§ 2309', '§ 2310', '§ 2311', '§ 2312', 'art 700', '§ 700', '§ 700', '§ 700', '§ 700', '§ 700', '§ 700', '§ 700', '§ 700', '§ 700', '§ 700', '§ 700', 'arts 701', 'art 701', '§ 701', '§ 701', '§ 701', '§ 701', 'art 702', '§ 702', '§ 702', '§ 702', 'art 703', '§ 703', '§ 703', '§ 703', '§ 703', '§ 703', '§ 703', '§ 703', '§ 703', '§ 5401', '§ 5402', '§ 5403', '§ 5404', '§ 5409', '§ 5412', '§ 5413', '§ 5414', '§ 5415', '§ 5416', '§ 5421', '§ 5422', '§ 455', '§ 455', '§ 455', '§ 455', '§ 455', '§ 455', '§ 455', 'ART 455', 'ART 455', 'ART 455', 'ART 455', 'ART 455', 'ART 455', 'ART 2', 'ART 3', 'ART 3', 'ART 5', 'ART 6', 'ART 7', 'ART 2', 'ART 5', '§ 11', '§ 11', '§ 11']

1.2.7 Unfair and Deceptive Acts and Practices (UDAP), Fraud | NCLC Digital Library
1.2.7 Unfair and Deceptive Acts and Practices (UDAP), Fraud
Chapter 1 Introductory Materials
1.1.2 All Subscribers Have Access to the Digital Version
1.1.3 Structure of the Chapters
1.1.4 The Appendices and Indices
1.1.5 Additional Pleadings, Primary Sources, and Practice Tools
1.1.6 Conventions and Caveats
1.1.7 Other NCLC Treatises Useful for Warranty Cases
1.2 Overview of Consumer Warranty Laws
1.2.1 Magnuson-Moss Warranty Act
1.2.2 UCC Article 2
1.2.3 UCC Article 2A
1.2.4 UCC Article 1
1.2.5 Lemon Laws, Used Car Warranty Laws, Manufactured Home Statutes, New Home Warranty Statutes
1.2.6 Broadly Applicable State Consumer Warranty Laws
1.2.8 Strict Liability and Negligence; Common Law Warranty Law; Cooling-Off Statutes
1.2.9 Service Contract Statutes
1.3 2003 Revisions to UCC Articles 2 and 2A, Now Withdrawn
1.4 Resources for Understanding and Interpreting Consumer Warranty Law
1.4.1 UCC Case Law
1.4.2 Official Comments to the UCC
1.4.3 Legislative History of Individual State UCC Enactments
1.4.4 UCC Treatises
1.4.5 Magnuson-Moss Warranty Act, Lemon Laws, and UDAP Statutes
1.5 Scope Issues
1.5.1 Consumer Products; Goods
1.5.2 Sale
1.5.3 Used Goods
1.5.4 Computer Software
1.5.5 Services, Mixed Goods and Services Sales
1.5.6 Manufactured Homes, Houses, and Real Property
1.5.7 Utility Service
1.5.8 Leases
1.5.9 Must Seller Be a Merchant?
1.5.10 Definition of Buyer
1.5.11 Definition of Seller
1.5.12 Requirement That Sale Be for “Personal, Family, or Household Purposes”
1.6 Cumulation of Rights and Remedies
1.6.1 Magnuson-Moss Warranty Act Does Not Preempt Other Warranty Laws
1.6.2 Cumulation of Rights Under UCC and State and Federal Consumer Legislation
1.6.3 Common Law
1.7 Federal Preemption
1.7.2 Medical Devices and Medications
1.7.2.1 Medical Devices
1.7.2.1.1 The review system for medical devices
1.7.2.1.2 Supreme Court decisions; parallel claims
1.7.2.1.3 Warranty claims
1.7.2.1.4 Effect of FDA’s generic manufacturing standards
1.7.2.1.5 “Fraud on the FDA” and reporting requirements
1.7.2.1.6 The FDA’s narrow preemption regulation
1.7.2.2 Prescription Medications
1.7.2.3 Generic Medications
1.7.2.4 Over-the-Counter Medications
1.7.2.5 Vaccines
1.7.2.6 The FDA’s Exclusive Enforcement Authority
1.7.3 Pesticides, Herbicides, and Veterinary Medicines
1.7.4 Boats and Airplanes
1.7.5 Motor Vehicles
1.7.5.1 Preemptive Effect of Federal Safety Standards
1.7.5.2 Private Suits Seeking Relief Similar to a Recall
1.7.5.3 Primary Jurisdiction
1.7.5.4 Required Statement of Estimated Gas Mileage; Emission Controls
1.7.6 Consumer Product Safety Act
1.7.7 Energy Efficiency Ratings
1.7.8 Other Products
1.7.8.1 Hazardous Substances
1.7.8.2 Food and Tobacco
1.7.8.3 Wireless Communications
1.8 Liberal Construction of Consumer Warranty Laws
1.8.1 Magnuson-Moss Warranty Act, Lemon Laws, and UDAP Statutes
1.8.2 Uniform Commercial Code
1.8.2.1 Requirement of Liberal Construction
1.8.2.2 Application of Policy to Consumer Transactions
1.8.2.3 Flexible Statutory Standards of the UCC
1.8.3 Non-UCC Warranty Law
1.9 Warranty Law in a Nutshell
1.9.1 Creation of Express and Implied Warranties
1.9.1.1 Introduction
1.9.1.2 Express Warranties
1.9.1.3 Implied Warranty of Merchantability
1.9.1.4 Implied Warranty of Fitness for a Particular Purpose
1.9.1.5 Statutory Warranties
1.9.1.6 Extended Warranties, Service Contracts, and Mechanical Breakdown Insurance
1.9.2 Restrictions on Enforcement of Consumer Warranties
1.9.2.1 Warranty Disclaimers and “As Is” Sales
1.9.2.2 Privity of Contract
1.9.2.3 Contractual Limitations on Buyer’s Remedies
1.9.2.4 Notice of Breach
1.9.3 Proving Breach of Warranty
1.9.4 Revocation of Acceptance and Other Self-Help Remedies
1.9.5 Money Damages and Lemon Law Remedies
1.10 Automobile Litigation Checklist
1.10.2 Legal Claims
1.10.3 Investigation and Litigation
Chapter 2 The Magnuson-Moss Warranty Act
2.1.2 Resources to Interpret the Act
2.2.1 Covered Consumer Products
2.2.1.1 General
2.2.1.2 Whether Consumer Use Is Normal Use
2.2.1.3 Aircraft
2.2.1.4 Medical Devices
2.2.1.5 Personalty Versus Realty
2.2.1.6 Services
2.2.1.7 Date of Product’s Manufacture
2.2.2 Only a “Consumer” May Enforce the Act
2.2.3 Covered Written Warranties
2.2.3.1 General
2.2.3.2 Statements and Representations Not Meeting Definition of a “Written Warranty”
2.2.3.3 General Assurances of Satisfaction Are Exempt from Some Provisions
2.2.3.4 Do Express Warranties for Used Products Meet Definition of “Written Warranty”?
2.2.3.5 Basis of the Bargain
2.2.3.6 Must the Written Warranty Be Found in a Single Document?
2.2.3.7 Electronic Warranty Documents
2.2.4 Covered Service Contracts
2.2.4.1 Definition of Service Contract
2.2.4.2 Does the Act Apply to Service Contracts Regulated As Insurance?
2.2.5 Parties with Obligations Under the Act
2.2.5.1 General
2.2.5.2 Manufacturers and Distributors
2.2.5.3 Dealers
2.2.5.4 Creditors
2.2.5.5 Individuals
2.2.6 Leases
2.2.6.1 General
2.2.6.2 How Consumer Leases Are Structured
2.2.6.3 The Leased Item Is a “Consumer Product”
2.2.6.4 Lessee Must Meet One of Three Prongs of Definition of “Consumer”
2.2.6.5 Lessee Who Is a “Buyer” Meets First Prong of Definition
2.2.6.6 Lessee to Whom the Product Is Transferred During the Duration of an Implied or Written Warranty or Service Contract Meets Second Prong of Definition
2.2.6.6.1 Overview of the second prong
2.2.6.6.2 “Transfer” of the product
2.2.6.6.3 Existence of written warranty, implied warranty, or service contract
2.2.6.7 A Consumer Who Is Entitled to Enforce a Written or Implied Warranty or Service Contract Meets the Third Prong of the Definition
2.2.6.8 Can There Be a “Written Warranty” in a Consumer Lease Transaction?
2.2.6.9 If the Manufacturer’s Warranty Is Not a Magnuson-Moss Written Warranty, Is It a Service Contract?
2.2.6.10 Rent-to-Own Transactions Distinguished
2.2.7 Exception for Warranties Governed by Other Federal Law
2.3 Enforcement of Implied and “Written” Warranties; Regulation of Service Contracts
2.3.1 Act Prohibits Breach of Implied Warranties Even When No Written Warranty Provided
2.3.1.1 Consumer May Bring Magnuson-Moss Suit for Breach of Implied Warranty
2.3.1.2 What Is an Implied Warranty for Purposes of the Magnuson-Moss Warranty Act?
2.3.1.2.1 General
2.3.1.2.2 The warranty of title
2.3.1.3 No Requirement of Written Warranty
2.3.2 Prohibitions on Disclaimers and Modifications of Implied Warranties
2.3.2.1 General
2.3.2.2 Service Contract Sale Prevents Disclaimers
2.3.2.2.1 When dealer sells consumer its own service contract
2.3.2.2.2 When dealer sells a third-party service contract
2.3.2.2.3 Factual investigation and discovery
2.3.2.2.4 Arguments for consumers
2.3.2.2.5 When service contract regulated as insurance
2.3.2.3 Permitted Restrictions on Duration of Implied Warranties
2.3.2.3.1 Supplier who provides limited written warranty may limit duration of implied warranties
2.3.2.3.2 Durational limits must be reasonable, conscionable, and properly displayed on face of warranty
2.3.3 Restrictions on Limitations of Remedies
2.3.4 Act Prohibits Breaches of Written Warranties
2.3.5 Act Eliminates Certain Horizontal Privity Requirements
2.3.6 Restrictions on Vertical Privity Requirements
2.3.6.1 No Privity Required for Claim of Breach of Written Warranty
2.3.6.2 Does the Act Eliminate Vertical Privity Requirements for Breach of Implied Warranties?
2.3.7 Does the Act Eliminate Notice of Breach Requirement?
2.3.8 Enforcement of Service Contract Obligations; Other Regulation of Service Contracts
2.4 Restrictions on Written Warranties (Both Limited and Full)
2.4.1 Prohibition of Tie-Ins
2.4.1.1 General
2.4.1.2 Scope of the Prohibition
2.4.1.3 Application to Anti-Theft “Etch” Product
2.4.1.4 Application to “50-50” Warranties
2.4.1.5 Remedies for Anti-Tying Violations
2.4.2 Manufacturer Cannot Be Final Judge of Warranty Dispute
2.4.3 Warranty Registration Cards
2.4.4 Extension of Warranties for Time Out of Service
2.4.5 Warrantor Responsible for Own Warranty
2.5 Requirements for Full Warranties
2.5.1 Distinguishing Full from Limited Warranties
2.5.2 No Restrictions on Subsequent Owner’s Rights
2.5.3 Remedy Defects Within a Reasonable Time, Without Charge
2.5.3.1 Repair, Replace, or Refund
2.5.3.2 “Without Charge”
2.5.3.3 Liens
2.5.4 Duration of Implied Warranty Cannot Be Limited
2.5.5 Exclusion of Consequential Damages
2.5.6 Consumer Election of Refund or Replacement
2.5.7 Any Duty on Consumer Must Be Reasonable
2.5.7.1 General
2.5.7.2 FTC Proposed Rules (Never Adopted)
2.5.7.3 Requirements That Consumer Notify Warrantor
2.5.7.4 Reasonable Use of Product
2.5.7.5 Proof of Purchase
2.6 Disclosure Requirements for Written Warranties
2.6.2 Exemptions from Disclosure Requirements
2.6.3 Designation of Warranty As Full or Limited
2.6.4 Ten Terms Required to Be Disclosed
2.6.4.1 General
2.6.4.2 Parties Who Can Enforce the Warranty
2.6.4.3 Warranty Coverage
2.6.4.4 Warranty Duration
2.6.4.5 Warrantor’s Performance Obligations
2.6.4.6 Consumer’s Duties
2.6.4.7 Availability of Informal Dispute Settlement Mechanisms
2.6.4.8 Limitations on Implied Warranties
2.6.4.9 Limitations on Remedies
2.6.4.10 Notice of State Rights
2.6.4.11 Registration Cards
2.6.5 Warranty’s Pre-Sale Availability
2.6.5.1 General
2.6.5.2 General Sales
2.6.5.3 Rules for Catalog and Mail Order Sales
2.6.5.4 Door-to-Door Sales
2.6.5.5 Internet Sales
2.7 Magnuson-Moss Litigation and Remedies
2.7.1 Violations Leading to Private Remedies
2.7.2 Jurisdictional Issues
2.7.2.1 $50,000 Amount in Controversy Requirement for Federal Court Jurisdiction
2.7.2.2 Diversity Jurisdiction over Magnuson-Moss Claims
2.7.2.3 Supplemental Jurisdiction over Magnuson-Moss Claims
2.7.2.4 Class Actions in Federal Court
2.7.2.4.1 Federal court jurisdiction over class actions under Magnuson-Moss jurisdictional grant
2.7.2.4.2 Alternative grounds for federal court jurisdiction over Magnuson-Moss class actions
2.7.2.5 Removal to Federal Court
2.7.2.6 Mandatory Arbitration and the Magnuson-Moss Warranty Act
2.7.3 Jury Trial
2.7.4 Preconditions to Suit Under the Magnuson-Moss Warranty Act
2.7.5 Pleading Damages
2.7.6 Pleading Other Elements
2.7.7 Available Relief Under the Act
2.7.7.1 Actual Damages
2.7.7.2 Personal Injury Damages
2.7.7.3 Statutory, Punitive Damages
2.7.7.4 Equitable Relief and Revocation
2.7.7.4.1 Consumer may seek equitable relief
2.7.7.4.2 Revocation of acceptance
2.7.8 Attorney Fees and Costs
2.7.8.1 General Standards for Attorney Fees
2.7.8.2 For What Claims and Activities Are Attorney Fees Available?
2.7.8.3 Fees When Magnuson-Moss Claim Is Not Pleaded or Is Not Established
2.7.8.4 Determining the Amount of Attorney Fees
2.7.8.5 Are Fees Available Under Magnuson-Moss for Work on Closely Related State Claims?
2.7.8.6 Fees If Case Is Settled
2.7.8.6.1 The Buckhannon decision and its definition of “prevailing party”
2.7.8.6.2 Does Buckhannon apply to Magnuson-Moss claims?
2.7.8.6.3 The format of settlements after Buckhannon
2.7.8.6.4 Fees when defendant moots the case by unilateral action
2.7.8.6.5 Buckhannon issues in state court
2.7.8.7 Defendant’s Fees Not Recoverable
2.7.8.8 Costs and Expenses
2.7.9 Class Actions
2.7.9.1 Except for Federal Jurisdiction Restrictions, the Usual Class Action Requirements Apply
2.7.9.2 Compliance with Magnuson-Moss Preconditions to Suit in a Class Action
2.7.9.3 Meeting the Predominance Requirement
2.7.10 Statute of Limitations
2.7.11 Federal Agency Enforcement
2.8 Informal Dispute Resolution Mechanisms
2.8.1 Precondition to Suit
2.8.1.1 Nature of the Requirement
2.8.1.2 The Mechanism Must Comply with the FTC’s Requirements
2.8.1.3 Effect of Informal Dispute Resolution Decision
2.8.1.4 Relation to Arbitration
2.8.2 Settlement with Warrantor Outside Dispute Resolution Mechanism
2.8.3 Warrantor’s Obligations
2.8.4 Disclosure of Mechanism Availability
2.8.5 Minimum Requirements for Qualifying Mechanisms
2.8.5.1 Mechanism Organization and Qualification of Members
2.8.5.2 Mechanism Operation
2.8.5.3 Recordkeeping and Disclosure
2.8.6 Remedies If Mechanism Does Not Meet Minimum Requirements
2.9 Effect on State Laws
2.9.1 No General Preemption
2.9.2 Preemption of State Disclosure Laws
Chapter 3 Express Warranties
3.2 Express Warranty by Affirmation of Fact or Promise
3.2.2 “Any Affirmation of Fact or Promise”
3.2.2.2 Statements of Quality, Characteristics, or Condition
3.2.2.3 Representations of Prior Repairs or Maintenance or Gas Mileage
3.2.2.4 Promises of Seller’s Future Actions or Product’s Future Performance
3.2.2.4.1 Introduction
3.2.2.4.2 Promises of seller’s future action; repair or replace warranties
3.2.2.4.3 Promises of future performance of the goods
3.2.2.5 Affirmation or Promise Created Orally, or by Advertisements, Brochures, or Labels
3.2.2.6 Pictures, Conduct, and the Product Itself As Affirmations of Fact
3.2.2.7 Opinion or Puffing
3.2.2.7.1 General
3.2.2.7.2 Buyer’s and seller’s sophistication as a factor
3.2.2.7.3 The bargaining context and contract language as factors
3.2.2.8 Does a Statement of Value Create a Warranty?
3.2.3 “Made by the Seller to the Buyer”
3.2.4 Affirmation Must Relate to the Goods
3.3 Express Warranty by Description of Goods
3.4 Express Warranty by Sample or Model
3.4.1 Sample and Model Distinguished
3.4.2 Creating Express Warranties by Model or Sample
3.4.3 Scope of the Warranty
3.5 Basis of the Bargain
3.5.2 Reliance Not Required
3.5.3 Presumption That Statements Are Part of Basis of Bargain
3.5.4 Parties’ Sophistication and Consumer’s Awareness of the Statement
3.6 Can Post-Sale Statements Be Part of the Basis of the Bargain?
3.6.1 Statements Made Before or at Delivery
3.6.2 Written Statements Provided at or Before Delivery That Are Not Read Until After Delivery
3.6.3 Statements Made After Delivery
3.6.3.1 General
3.6.3.2 Post-Sale Statements As Modifications of the Original Bargain
3.6.3.2.1 General
3.6.3.2.2 Must the modification be in writing?
3.6.3.2.3 Enforcing an oral modification even if statute of frauds requires it to be in writing
3.7 Parol Evidence: Can Oral or Prior Written Statements Expand on a Written Warranty?
3.7.1 General
3.7.2 Determining Whether the Writing Was Intended to Be Final or Complete and Exclusive
3.7.2.1 Parties’ Intent As Primary Consideration
3.7.2.2 Presumption That Contract Is Not Complete and Exclusive
3.7.2.3 Rejection of the Four Corners Test
3.7.2.4 Importance of Surrounding Circumstances
3.7.2.5 Content of the Writing Itself
3.7.2.6 Parol Evidence Must Be Examined Before It Can Be Excluded
3.7.2.7 Form Contracts
3.7.2.8 Post-Sale Conduct
3.7.2.9 Effect of Merger or Integration Clause
3.7.2.9.1 Has the consumer agreed to the merger clause?
3.7.2.9.2 Merger clause ineffective if inconspicuous, unconscionable, in bad faith, or unfair or deceptive
3.7.2.9.3 Merger clause ineffective when entire contract is ineffective
3.7.2.9.4 Merger clause does not protect non-parties to the contract
3.7.2.10 Question for Judge or Jury?
3.7.3 Evidence of Consistent Additional Terms Is Admissible Even If Contract Was Intended to Be Final
3.7.3.1 General
3.7.3.2 Disclaimers May Be Construed Not to Be Inconsistent with Oral Promises
3.7.4 Evidence of Course of Dealing, Usage of Trade, or Course of Performance Is Admissible to Explain or Supplement the Writing
3.7.4.1 Admissibility
3.7.4.2 Course of Dealing
3.7.4.3 Course of Performance
3.7.4.4 Trade Usage
3.7.5 Parol Evidence Rule Does Not Apply to Statements Made After the Writing
3.7.6 Admissibility of Advertisements, Samples, or Models
3.7.7 Parol Evidence Admissible to Interpret an Ambiguous Contract Term
3.7.8 Parol Evidence That Relates to Fundamental Assumptions and Conditions Precedent
3.7.9 Parol Evidence Rule Does Not Affect Fraud, Mistake, and UDAP Claims
3.8 Seller Attempts to Disclaim or Nullify Express Warranties
3.8.1 Any Disclaimer of Express Warranties Is Ineffective; Relation to Parol Evidence Rule
3.8.2 Nullification of Express Warranties Due to Buyer’s Pre-Sale Inspection
3.9 Does Express Warranty Conflict with Implied Warranties or Other Express Warranties?
3.9.1 Warranties Are to Be Construed to Cumulate Whenever Possible
3.9.2 When Are Warranties Consistent?
3.9.3 When Warranties Are Inconsistent
Chapter 4 Implied Warranties
4.2 Implied Warranty of Merchantability
4.2.1 Nature of the Warranty
4.2.1.1 Imposed by Operation of law
4.2.1.2 Arise Without Regard to Seller’s Fault
4.2.2 Parties Who Create Implied Warranty of Merchantability
4.2.2.1 Manufacturers and Other Non-Retailers
4.2.2.2 “Merchants”
4.2.2.3 Merchant Must Be a Merchant with Respect to Goods of That Kind
4.2.3 Standards for Determining If Goods Are Merchantable
4.2.3.1 General
4.2.3.2 Fitness for Ordinary Purposes
4.2.3.2.1 Ordinary purposes
4.2.3.2.2 General meaning of fitness
4.2.3.2.3 Able to do ordinary job
4.2.3.2.4 Reasonable safety, efficiency, and comfort
4.2.3.2.5 Standards for used goods
4.2.3.2.6 Quality of similar goods
4.2.3.2.7 Price
4.2.3.2.8 Government or industry standards
4.2.3.3 Adequately Contained, Packaged, and Labeled; In Conformity with the Container or Label
4.2.3.4 Passing Without Objection in the Trade
4.3 Implied Warranty of Fitness for a Particular Purpose
4.3.2 Elements of the Warranty
4.3.2.2 “The Seller”
4.3.2.3 “At the Time of Contracting Has Reason to Know”
4.3.2.4 “Any Particular Purpose”
4.3.2.4.1 General
4.3.2.4.2 Case law finding ordinary purpose as particular purpose
4.3.2.4.3 Case law finding ordinary purpose cannot be particular purpose
4.3.2.4.4 Advantages of particular purpose over merchantability warranty when use is ordinary
4.3.2.4.5 Re-characterization of ordinary use as particular use
4.3.2.5 “And That the Buyer Is Relying”
4.3.2.6 “On the Seller’s Skill or Judgment”
4.3.2.7 “To Select or Furnish Suitable Goods”
4.3.2.8 “Impliedly Warranted to Be Fit for Such Purpose”
4.3.3 Seller’s Good Faith Is Irrelevant
4.3.4 Existence of Warranty Is Factual Issue
4.3.4.1 General
4.3.4.2 Parol Evidence Rule Not Applicable
4.4 Effect of Pre-Sale Inspection
4.4.2 Ways to Avoid Pre-Sale Inspection Problems
4.4.2.1 Defects That Could Not Reasonably Have Been Discovered
4.4.2.2 More Than Casual Inspection Required
4.4.2.3 Post-Sale Inspections Irrelevant
4.4.2.4 Necessity of Demand by Seller When Consumer Fails to Inspect Goods
4.4.2.5 Statutory Elimination of Pre-Sale Inspection As Grounds for Avoiding Warranty
4.4.3 Dealing with Contract Clauses Stating That the Buyer Has Examined the Goods
4.4.4 Other Remedies If Pre-Sale Inspection Has Vitiated Implied Warranties
4.5 Warranty of Title
4.5.1 Nature and Creation of Warranty of Title
4.5.2 Defending the Buyer’s Title
4.5.3 Available Causes of Action
Chapter 5 Fourteen Ways to Defeat Warranty Disclaimers
5.1.1 The Nature of Disclaimers
5.1.2 UCC Policies Favor Giving Effect to Warranties
5.2 No Disclaimer of Express Warranties
5.3 Magnuson-Moss Warranty Act Bars Implied Warranty Disclaimers
5.3.1 Prohibition Against Disclaimers
5.3.2 Permissible Limitation on the Duration of Implied Warranties
5.3.3 Magnuson-Moss Disclosure Requirements
5.4 State Statutory Restrictions on Implied Warranty Disclaimers
5.4.1 Generally Applicable Restrictions
5.4.2 Special Restrictions on Disclaimers in Used Car Sales
5.5 UCC Requires Use of the Word “Merchantability” or Language Such As “As Is”
5.6 Only Party Drafting the Disclaimer Usually Protected
5.7 When Disclaimer Not Available Before Contract Is Signed
5.8 Disclaimer Must Be Conspicuous
5.8.1 General Requirement
5.8.2 Definition of Conspicuous
5.8.3 Type Size and Appearance
5.8.4 Disclaimers on the Back of Contract
5.8.5 Disclaimers Buried in Other Text or Under Inappropriate Headings
5.8.6 Disclaimers Found Outside the Contract
5.8.7 Must “As Is” Disclaimers Be Conspicuous?
5.8.8 Special Conspicuousness Requirements of FTC Used Car Rule
5.8.9 Reasonable Person Standard
5.8.10 Effect of State Plain Language Laws
5.8.11 Electronic Documents As Disclaimers
5.9 Consumer Must Have Actual Knowledge of Disclaimer
5.10 Contract Formation and Construction
5.10.1 Is the Disclaimer Part of the Bargain?
5.10.2 When Contract Contains Ambiguities or Conflicting Clauses
5.10.3 Ambiguities When FTC Buyers Guide Is Used
5.10.4 Ambiguities Created by Seller’s Conduct
5.11 “As Is” Disclaimer Invalid If “Circumstances Indicate Otherwise”
5.11.1 General Rule
5.11.2 Level of Consumer’s Understanding May Invalidate Disclaimer
5.11.3 Seller’s Conduct May Invalidate “As Is” Disclaimer
5.12 Unconscionability of Disclaimer
5.13 Disclaimer Invalid for Lack of Good Faith
5.14 Disclaimer May Not Affect Consumer’s Ability to Revoke Acceptance
5.15 No Disclaimer of Tort, Deceptive Practices Statute, or Other Non-Warranty Liability
5.15.1 Tort Claims
5.15.2 Statutory Claims
5.15.3 Common Law and Equity Claims
5.15.4 Contract Claims
Chapter 6 Avoiding Vertical and Horizontal Privity Requirements
6.2 Vertical Privity and the Liability of Indirect Sellers
6.2.1 Reasons to Bring a Warranty Claim Against the Manufacturer
6.2.2 Manufacturers Liable to Consumers Under Their “Written Warranties”
6.2.3 Manufacturer’s Liability for Express Warranties That Are Not “Written Warranties”
6.2.3.1 Effect on Express Warranties When State Abolishes Vertical Privity Requirement for Implied Warranties
6.2.3.2 Even States That Have Not Unequivocally Abolished Privity Requirements for Implied Warranties Usually Do So for Express Warranties
6.2.4 Manufacturer’s Liability to Consumer for Implied Warranties
6.2.4.1 Liability Under Federal Law
6.2.4.2 Liability Under State Law
6.2.4.2.1 Issues in analyzing state law
6.2.4.2.2 Arguments in favor of judicial abolition of privity requirements for implied warranties
6.2.4.2.3 State law surveyed
6.2.4.2.4 Distinctions between types of implied warranties
6.2.5 Manufacturer’s Liability Even When Privity Required
6.2.5.1 Consumer As Third-Party Beneficiary of Manufacturer’s Warranty
6.2.5.2 Dealer As Manufacturer’s Agent
6.2.5.3 Manufacturer As Direct Seller
6.2.5.4 Manufacturer’s Issuance of Express Warranty As Creating Privity for Implied Warranties; Manufacturer Rebate Programs
6.2.5.5 Manufacturer’s Liability Based on Equitable Estoppel
6.2.5.6 Non-Warranty Claims
6.2.6 Direct Seller’s Liability on Indirect Seller’s Warranty
6.2.7 Proving Breach of Warranty Against Indirect Seller
6.3 Horizontal Privity and the Claims of Nonbuyers
6.3.2 No Horizontal Privity Requirement When There Is a “Written Warranty” or Implied Warranty
6.3.3 State Law May Also Abandon Horizontal Privity
6.3.3.1 Importance of State Law Standards
6.3.3.2 Analysis of State Law Variations
6.3.3.3 Survey of State Law
6.3.4 Privity May Not Be Required If Nonbuyer Is Assigned Buyer’s Warranty Rights
6.3.5 Privity Unnecessary If Buyer Is Agent for Ultimate User
6.3.6 Asserting Warranty Rights As a Third-Party Beneficiary
6.3.7 Horizontal Privity Not Required for Non-Warranty Claims
6.3.8 Contractual Limitations on Nonbuyers’ UCC Rights
Chapter 7 Establishing Breach of Warranty: Notice, Standards, Proof, and Defenses
7.2 Notice of Breach
7.2.1 General Requirement
7.2.2 When Notice of Breach Is Not Required
7.2.2.1 Rejection and Revocation
7.2.2.2 Nondelivery or Late Delivery
7.2.2.3 Magnuson-Moss Claims
7.2.2.4 When Seller Has Actual Knowledge
7.2.2.5 Notice to Indirect Sellers
7.2.2.6 Notice to Assignees
7.2.2.7 Nonbuyers and Personal Injury Claims
7.2.2.7a Futility of Notice
7.2.2.8 Special State Provisions
7.2.2.9 Can a Pleading Serve As Notice of Breach?
7.2.3 Reasonable Time Within Which to Give Notice of Breach
7.2.3.1 General
7.2.3.2 Longer Time Allowed in Consumer Cases
7.2.3.3 Second Notice After Repair Attempt
7.2.4 Contractual Specification of Time to Give Notice
7.2.5 Form and Content of Notice
7.2.5.1 Minimal Requirements for Content of Notice
7.2.5.2 Form of Notice
7.2.5.3 Contractual Specification of Manner of Giving Notice
7.2.5.4 Tactical Considerations
7.3 Warranty Standards and Nonconformity
7.3.1 The Perfect Tender Rule and the Seller’s No-Fault Liability
7.3.2 Standards for Nonconformity Vary with the Type of Warranty
7.3.3 Future Performance Versus Present Characteristic Warranties
7.3.4 General Versus Specific Warranties
7.3.5 Nonconformity with Express Warranties
7.3.5.1 Present Characteristic Express Warranties
7.3.5.1.1 Specific warranties created by affirmation of fact
7.3.5.1.2 General warranties created by affirmation of fact
7.3.5.1.3 Warranties created by pictures, models, or samples
7.3.5.1.4 Nonconformity must exist at time of delivery
7.3.5.2 Future Performance Express Warranties
7.3.5.2.1 Introduction
7.3.5.2.2 Characterizing express warranties as future performance warranties
7.3.5.2.3 Interpretation of future performance express warranties
7.3.5.2.4 Duration and conditions of future performance warranties
7.3.5.3 Interpretation of Express Warranties
7.3.5.3.1 Construction against drafter; limitations are inoperative if they are inconsistent with the express warranty
7.3.5.3.2 Do warranties against defects in materials and workmanship cover design defects?
7.3.6 Nonconformity with Implied Warranty of Merchantability
7.3.6.1 Standards for Nonconformity
7.3.6.2 Nonconformity Must Exist at Delivery
7.3.7 Implied Warranty of Fitness for a Particular Purpose
7.3.8 Defects That Have Not Yet Caused a Malfunction
7.4 The Buyer’s Burden of Proof and Use of Circumstantial Evidence
7.4.1 The Buyer’s Burden of Proof
7.4.2 Circumstantial Evidence of Defective Condition; Proof of Cause Unnecessary
7.5 Proving Condition at Delivery
7.5.1 Eyewitness Testimony of Performance
7.5.1.1 Eyewitness and Expert Testimony Compared
7.5.1.2 Early Detection Adds Credibility to Eyewitness Testimony
7.5.1.3 Problems of Using Eyewitness Testimony Against Indirect Sellers
7.5.2 Evidence of Proper Use and Maintenance; Negating Other Causes
7.5.3 Admissions by Seller or Manufacturer
7.5.4 Evidence of Repairs by the Seller
7.5.5 Evidence That Replacement Parts Work Well
7.5.6 Evidence of Similar Claims by Others
7.5.7 Government Investigation of Products or Sellers
7.5.8 Expert Testimony
7.6 Statute of Limitations As a Defense to Breach of Warranty
7.6.1 The UCC Limitations Period: Four Years After Tender of Delivery
7.6.2 Defining When Delivery Occurs
7.6.3 UCC Limitations Period for Future Performance Warranties
7.6.3.1 Claim for Breach of Future Performance Warranty Accrues upon Discovery
7.6.3.2 What Is a Future Performance Warranty?
7.6.3.3 Use of a Specific Time Period Can Create a Future Performance Warranty
7.6.3.4 Is a Repair or Replace Warranty a Future Performance Warranty?
7.6.3.5 Does Future Performance Exception Apply to Implied Warranties?
7.6.4 UCC Limitations Period for Warranties for Leased Goods
7.6.5 Seller’s Repair Attempts or Other Conduct May Toll the Limitations Period
7.6.6 Fraudulent Concealment Tolls the Limitation Period
7.6.7 A Timely Action That Is Dismissed May Be Refiled Within Six Months
7.6.8 Warranty Defenses to Seller’s Collection Action Can Be Raised After the Limitations Period Has Expired
7.6.9 Effect of Contract Provision Shortening the Limitation Period
7.6.10 Limitations Periods for Non-UCC Claims
7.7 Other Defenses to Breach of Warranty
7.7.2 Buyer’s Conduct As the Cause of Damage
7.7.2.1 General
7.7.2.2 Buyer’s Negligence
7.7.2.3 Assumption of Risk
7.7.2.4 Misuse of the Product
7.7.2.5 Failure to Abide by Directions for Use
7.7.3 Noncompliance with Conditions to Warranty Coverage
7.7.4 Expiration of Express Warranty Period
7.7.4.1 Determining When Warranty Expires
7.7.4.2 Defects Reported But Not Repaired Before Period Expires
7.7.4.3 Defects Discovered During, But Reported After, Warranty Period
7.7.4.4 Defects Not Discovered Until After Period Expires
7.7.4.5 Is There Another Warranty with a Longer Period?
7.7.4.6 Challenging an Unfairly Short Warranty Period
7.7.4.6.1 Manufacturer’s knowledge; unconscionability
7.7.4.6.2 Is the length of the warranty period “manifestly unreasonable”?
Chapter 8 UCC Self-Help Remedies: Cancellation of the Sale; Deducting Damages from the Outstanding Balance
8.1.1 Overview of UCC Self-Help Remedies
8.1.2 Differences Between Rejection and Revocation of Acceptance
8.1.3 Limitations on Rejection and Revocation
8.1.4 Law Versus Equity
8.2 Buyer’s Rejection of the Goods
8.2.2 Acceptance by Failure to Reject After Reasonable Opportunity to Inspect
8.2.2.1 Timeliness of Inspection and of Notice of Rejection
8.2.2.2 Length of Reasonable Opportunity to Inspect
8.2.2.3 Contractual Specification of Time to Inspect
8.2.2.4 Time Period Extended by Seller’s Conduct
8.2.2.5 Seasonable Notice
8.2.3 Acceptance by Buyer’s Signification of Acceptance
8.2.3.1 Overview
8.2.3.2 Repairing the Goods As Acceptance
8.2.3.3 Use of the Goods
8.2.3.4 Payment for the Goods
8.2.3.5 Resale of the Goods
8.2.4 Buyer’s Acceptance by Acts Inconsistent with Seller’s Ownership
8.2.5 Notice of Rejection
8.2.5.1 Notice Must Be Timely
8.2.5.2 Form of Notice of Rejection
8.2.5.3 Content of Notice of Rejection
8.2.5.4 Practical Tips for Giving Notice
8.2.6 Any Nonconformity Is Sufficient to Reject
8.2.7 Seller’s Right to Cure After Buyer’s Rejection
8.2.7.1 Introduction
8.2.7.2 Distinguishing Cure Before and After Time for Performance Has Expired
8.2.7.2.1 Differing cure requirements depending on whether time has expired
8.2.7.2.2 Determining whether time for performance has expired
8.2.7.3 If Contract Period Has Expired, Seller Can Cure Only If It Has Reasonable Grounds to Believe Cure Will Be Acceptable to the Buyer
8.2.7.3.1 Introduction
8.2.7.3.2 Notice from the buyer
8.2.7.3.3 Greater monetary value
8.2.7.3.4 Minor defects
8.2.7.3.5 Seller’s ignorance of defect
8.2.7.4 Seller Must Give Seasonable Notice of Intention to Cure
8.2.7.5 Cure by Repair and the Shaken Faith Doctrine
8.2.7.6 Seller’s Deadline to Effect a Cure
8.2.7.7 Cost of Returning Goods to Seller to Allow a Cure
8.2.7.7.1 Seller bears the expense
8.2.7.7.2 Effect of contract requirement that consumer return goods
8.2.7.7.3 Cure not contingent on seller first paying buyer’s damages
8.2.7.8 Effect of Buyer’s Refusal to Allow Rightful Cure
8.3 Revocation of Acceptance
8.3.1.1 Basic Criteria for Revocation of Acceptance
8.3.1.2 Overcoming Judicial Resistance to Revocation of Acceptance
8.3.2 Substantial Impairment of Value of Goods to Buyer
8.3.2.1 General
8.3.2.2 Is the Test Objective or Subjective?
8.3.2.3 Rationale for Subjective View of Substantial Impairment
8.3.2.4 The Shaken Faith Doctrine and the Buyer’s Particular Needs
8.3.2.5 Failure to Repair As a Substantial Nonconformity
8.3.2.6 Nonconformity Need Not Involve Breach of Warranty
8.3.3 Buyer’s Justification for Having Accepted the Nonconforming Goods
8.3.3.1 Introduction
8.3.3.2 Acceptance Based on Reasonable Assumption of Repair
8.3.3.3 Buyer Unaware of Nonconformity at Time of Acceptance
8.3.4 Reasonable Time for Revocation
8.3.5 Condition of Goods at Revocation
8.3.6 Notice of Revocation
8.3.6.1 Form of Notice
8.3.6.2 Content of Notice
8.3.6.3 Sending the Notice to Third Parties
8.3.7 Seller’s Cure After Revocation
8.3.7.1 No Right to Cure Under the UCC
8.3.7.2 Cure After Acceptance Pursuant to Subsequent Agreement Between Parties
8.3.7.3 Cure Based on Contractual Limitation on Remedies
8.3.7.4 Strategic Issues
8.3.8 Canceling the Sale Against the Indirect Seller
8.3.8.1 Introduction
8.3.8.2 Precedent Allowing Revocation Against the Indirect Seller
8.3.8.3 Precedent Disallowing Revocation Against the Indirect Seller
8.3.8.4 Tactics to Optimize Chances of Revoking Against the Indirect Seller
8.3.8.5 Rescission As an Alternative Claim Against a Remote Manufacturer
8.4 What the Buyer May Do with the Goods After Cancellation
8.4.2 Holding the Goods for Seller
8.4.3 Returning the Goods to the Seller
8.4.3.1 Advantages and Disadvantages of Returning the Goods
8.4.3.2 Steps to Protect the Buyer Who Returns the Goods
8.4.3.3 Providing Clear Title to the Goods
8.4.3.4 Strategy When Seller Refuses to Accept Return of the Goods
8.4.4 Selling the Goods When Buyer Has Made Payments or Incurred Expenses
8.4.4.1 Right to Sell the Goods
8.4.4.2 When Has Buyer Made Payments or Incurred Expenses?
8.4.4.3 Advantages of Selling the Goods
8.4.4.4 Applying the Sale Proceeds
8.4.4.5 Sale Procedures
8.4.5 Reselling the Goods When Seller or Creditor Has Security Interest
8.4.5.1 Introduction
8.4.5.2 Reselling the Goods When the Seller Itself Has a Security Interest
8.4.5.2.1 Canceling the contract terminates the seller’s security interest
8.4.5.2.2 Reselling the goods when the seller holds the security interest and has not filed a financing statement
8.4.5.2.3 Reselling the goods when the seller has filed a financing statement or has noted a lien on a title document
8.4.5.3 Reselling the Goods When an Assignee Has a Security Interest
8.4.5.4 Reselling the Goods When a Third-Party Direct Lender Has a Security Interest
8.4.5.4.1 When the seller arranged the loan or referred the buyer to the lender
8.4.5.4.2 When the buyer independently arranged the loan
8.4.5.5 Revocation of Acceptance After Repossession
8.4.6 Using the Goods—Does It Negate Cancellation?
8.4.6.1 General
8.4.6.2 Continued Use of a Manufactured Home
8.4.6.3 Continued Use of a Motor Vehicle
8.4.6.4 Continued Use of Other Consumer Products
8.4.6.5 Strategies to Protect the Buyer Who Uses the Goods
8.4.6.6 Seller’s Set-Off for Buyer’s Continued Use
8.5 Deducting Buyer’s Damages from the Outstanding Balance
8.5.1 When May the Buyer Deduct Damages?
8.5.2 Avoiding Repossession When Buyer Deducts Damages
8.5.3 Deductions from Installment Payments
8.5.4 Practical Problems with Withholding Installment Payments
8.5.5 Buyer Must Notify Seller Concerning Deduction of Damages
8.5.6 Deducting Damages for Breach of Manufacturer’s Warranty When Direct Seller Has Disclaimed Warranties
Chapter 9 Ten Ways to Avoid Contractual Limitations on Remedies
9.2 Contract Language Must Unambiguously Limit the Consumer’s Remedies
9.3 Has the Consumer Agreed to the Remedy Limitation?
9.4 Claims Unaffected by Contractual Remedy Limitations
9.4.1 Claims Against Manufacturer or Dealer When Only the Other Party Limits the Consumer’s Remedy
9.4.2 Express Warranty Claims Not Covered by the Limitation of Remedies
9.4.3 Implied Warranty Claims Not Covered by the Limitation of Remedies
9.4.3a Non-UCC Remedies
9.4.4 Personal Injury Claims in Consumer Cases
9.4.5 Tort and Consumer Protection Claims
9.5 When Limited Remedy “Fails of Its Essential Purpose”
9.5.2 Application to Repair or Replace Remedies
9.5.3 Effect of Failure of Repair or Replace Remedy on Seller’s Limitation of Incidental or Consequential Damages
9.5.4 Limitations on Incidental or Consequential Damages When Goods Were Purchased to Guard Against the Very Damage Being Limited
9.6 Unconscionability of Limitation of Remedies
9.6.2 No Limitation of Consequential Damages When Unconscionable
9.6.3 Factors Used to Determine Unconscionability of a Limitation of Remedies Clause
9.7 Inconspicuousness of Limitations Provision Will Defeat Its Effect
9.7.1 Federal Law Requires Any Remedy Limitation to Be Conspicuous If “Written Warranty” Provided
9.7.2 UCC Requirements Concerning Conspicuous Disclosure
9.7.3 Effect of State Plain Language Statute
9.8 Seller’s Post-Sale Conduct May Waive the Contractual Limitation
9.9 State Law Restrictions on Limitation of Remedy Clauses
9.10 Seller’s Bad Faith
9.11 Remedy Limitations That Make Warranty Unfair or Deceptive
Chapter 10 UCC Damages
10.2 Comparison Between Cancellation and Keeping the Goods
10.3 Buyer’s Direct Damages upon Cancellation
10.3.2 Recovery of Purchase Price
10.3.3 Cover: Cost of Substitute Goods
10.3.3.1 Introduction
10.3.3.2 Goods Qualifying As Substitutes
10.3.3.3 Requirements of Good Faith and Reasonableness
10.3.3.4 Delay in Effectuating Cover
10.3.3.5 Offset for Expenses Saved in Consequence of Breach
10.3.4 No Cover: Difference in Price
10.3.5 Expenses of Holding and Reselling
10.3.6 Offset for Buyer’s Use
10.3.6.1 Is an Offset Authorized?
10.3.6.2 Calculating the Offset
10.4 Buyer’s Direct Damages When No Cancellation
10.4.1 General Rule As to Measure of Damages for Accepted Goods
10.4.2 Buyer’s Burden of Proof
10.4.3 Difficulties in Proving Value of Goods As Accepted
10.4.4 Cost of Repair As a Measure of Damages
10.4.4.1 When Can Direct Damages Be Based on Repair Cost?
10.4.4.2 Proof Issues
10.4.5 Resale Price As a Measure of Damages
10.4.6 Buyer’s Testimony As a Measure of Damages
10.4.7 Expert Testimony of Extent of Buyer’s Damages
10.4.8 Blue Books and Other Market Compilations
10.4.9 Use of Requests for Admissions
10.4.10 Subjective Value
10.4.11 When Seller Did Not Have Title to Goods Sold
10.5 Buyer’s Incidental and Consequential Damages (Whether or Not Buyer Cancels)
10.5.2 Incidental Damages
10.5.3 Consequential Damages
10.5.3.1 Economic Loss Consequential Damages
10.5.3.1.1 General standards; knowledge; mitigation
10.5.3.1.2 Substitute transportation and housing, lost wages
10.5.3.1.3 Financing costs
10.5.3.1.4 Damage to the consumer’s credit rating
10.5.3.1.5 Damage due to repossession of the goods
10.5.3.2 Consequential Damages Based on Injury to Person or Property
10.5.3.3 Mental Anguish Damages
10.5.3.4 Damages for Inconvenience, Aggravation, Loss of Time
10.5.4 Proving Incidental and Consequential Damages
10.6 Punitive Damages
10.7 Attorney Fees As Damages
Chapter 11 Deception, Unfairness, Unconscionability, Lack of Good Faith, and Fraud
11.1 State UDAP Statutes
11.1.1 Application of UDAP Statutes to Warranty Problems
11.1.1.1 Introduction
11.1.1.2 Advantages of a UDAP Claim
11.1.1.3 Advantages of a UCC Claim
11.1.2 Standards of Deception and Unfairness
11.1.3 Breach of Warranty or Service Contract As a UDAP Violation
11.1.4 Unfair and Deceptive Conduct After Warranty Breach
11.1.5 Defective Product As a UDAP Violation
11.1.6 Deceptive Warranty Advertising
11.1.7 Other Misrepresentations About Warranties
11.1.8 Misrepresentation or Nondisclosure of Condition or Features of Product
11.1.9 Violation of Other Warranty Statute
11.2 UCC Unconscionability
11.2.2 Overview and Scope of Section 2-302
11.2.3 Unconscionability Is a Question of Law for the Court; Hearing Requirement
11.2.4 Unconscionable at Time Contract Is Made; Contract’s Commercial Setting
11.2.5 Standards for Determining Unconscionability
11.2.5.1 UCC Does Not Define Unconscionability; Uniform Consumer Sales Practices Act Standards
11.2.5.2 Procedural Unconscionability
11.2.5.2.1 Consumer and commercial cases distinguished
11.2.5.2.2 Lack of understanding of contract terms
11.2.5.2.3 Standard form contracts
11.2.5.2.4 Preying on the buyer’s weaknesses
11.2.5.3 Substantive Unconscionability
11.2.5.4 Relation of Procedural to Substantive Unconscionability
11.2.6 Proving Unconscionability
11.2.7 Remedies for Unconscionable Clauses
11.2.7.1 Whole Contract May Be Ruled Unenforceable
11.2.7.2 Offensive Term Ruled Unenforceable
11.2.7.3 Limiting the Effect of the Offensive Term
11.2.7.4 Availability of Monetary Damages
11.3 Good Faith Obligation
11.3.2 Good Faith Applies to Conduct Initiating the Sale and to Contract Terms
11.3.3 Common Law Duty of Good Faith
11.3.4 Remedies for Seller’s Lack of Good Faith
11.3.5 Bad Faith and Unconscionability Distinguished
11.4 Common Law Fraud and Related Torts
11.4.1 Relevance to Warranty Cases
11.4.1.1 Overview
11.4.1.2 Advantages over Warranty Claims
11.4.1.3 Advantages of Misrepresentation Claims over UDAP Claims
11.4.2 Intentional Misrepresentation
11.4.2.1 Elements
11.4.2.2 Can Economic Loss Be Recovered for Intentional Misrepresentation?
11.4.3 Negligent Misrepresentation
11.4.3.1 Nature of the Tort
11.4.3.2 Is Economic Loss Recoverable for Negligent Misrepresentation?
11.4.3.3 Recklessness As an Alternative
11.4.4 Innocent Misrepresentation
11.4.5 Concealment or Nondisclosure
11.4.6 Justifiable Reliance and the Buyer’s Opportunity to Inspect
11.4.7 Remedies
11.4.7.1 Measure of Damages
11.4.7.2 Punitive Damages
11.4.7.3 Rescission
11.4.8 Pleading and Practice Tips
Chapter 12 Negligence and Strict Liability in Tort
12.1 Utility of Tort Theories in Consumer Warranty Cases
12.2 Are Economic Damages Recoverable Under Negligence and Strict Liability Claims?
12.2.1 General Rule Barring Recovery of Economic Damages
12.2.2 Rationales for Economic Loss Doctrine
12.2.3 Economic Damages May Be Allowed in Consumer But Not Commercial Cases
12.2.4 Recovery for Economic Injury When Damage Linked to Accident, Danger, Personal Injury, or Property Damage
12.2.5 When UCC Remedies Unavailable; Non-Privity Plaintiffs; Services
12.2.6 Breach of Statutory or Independent Duty
12.2.7 Special Relationship
12.2.8 Distinguishing Economic Loss from Property Damage
12.2.8.1 Damage to Other Property Can Be Recovered in Most Jurisdictions
12.2.8.2 The East River and Saratoga Fishing Standard
12.2.8.3 Alternative Tests
12.2.8.4 Damage That a Defective Component Causes to a Home
12.3 Elements of Strict Liability in Tort
12.3.2 Strict Liability Can Apply to Manufacturers, Retailers, and Lessors
12.3.3 Products Covered
12.3.3.1 General Scope
12.3.3.2 Used Goods
12.3.3.3 Services
12.3.4 Defective Condition
12.3.5 The Unreasonably Dangerous Requirement
12.3.6 Failure to Warn
12.3.7 Causation
12.3.8 Use in a Normal or Foreseeable Manner
12.4 Elements of the Negligence Claim
12.4.1 Duty to Conform to a Reasonable Standard of Conduct
12.4.1.1 General
12.4.1.2 Establishing the Standard of Normal Care
12.4.1.3 Standard of Care As to Design and Manufacture
12.4.1.4 Standard of Care As to Inspection for Defects and Preparation for Sale
12.4.1.5 Standard of Care to Warn the Consumer of Defects or Dangers in Use
12.4.2 Failure to Act in Conformity with the Standard
12.4.3 Proximate Cause
12.4.4 Defenses
Chapter 13 Litigating Warranty Cases
13.1 Evaluating and Framing the Case
13.1.1 Initial Contacts with the Client
13.1.2 Obtain and Analyze All Relevant Documents
13.1.3 Go Behind the Written Documents
13.1.4 Develop the Buyer’s Circumstances
13.1.5 Characterize the Warranties in the Most Favorable Way
13.2 Strategic Decisions
13.2.1 Should the Buyer Allow the Seller an Opportunity to Cure?
13.2.2 Should the Buyer Cancel the Sale or Keep the Goods?
13.2.3 How to Deal with Secured Creditors
13.2.4 Use of the Goods After Cancellation
13.2.5 Avoiding Spoliation of Evidence Problems
13.2.6 Provide Complete and Timely Notice to the Seller
13.2.7 Consumer Publicity Efforts
13.3 Pleading Warranty Claims
13.3.1 Plead Both UCC and Non-UCC Claims
13.3.1.1 Benefits of Pleading Non-UCC Claims
13.3.1.2 Magnuson-Moss Claims
13.3.1.3 UDAP Claims
13.3.1.4 Lemon Law and Other Statutory Claims
13.3.1.5 Tort Claims
13.3.2 Pleading Multiple UCC Claims
13.3.3 Specificity of Warranty Allegations
13.3.4 Pleading Revocation or Rejection
13.3.5 Pleading Notice of Breach
13.3.6 Pleading the Existence and Terms of the Warranty and Its Breach
13.3.7 Pleading Privity
13.3.8 Pleading Incidental and Consequential Damages
13.3.9 Determining What Parties to Name
13.3.9.1 The Proper Plaintiff
13.3.9.2 Manufacturers and Dealers
13.3.9.3 Institutions That Finance the Sale
13.3.9.4 Distributors and Other Entities Related to Manufacturer
13.3.10 Jurisdiction over, and Service of Process upon, Foreign Defendants and Witnesses
13.3.11 Warranty Class Actions
13.3.11.1 Certifying a Warranty Class Action
13.3.11.2 Jurisdictional Issues
13.3.12 The Seller’s Answer
13.4 The Enforceability of Binding Arbitration Agreements
13.4.1 Introduction
13.4.2 The Enforceability of Arbitration Clauses in a Nutshell
13.4.3 Federal Limits on Arbitration in Manufactured-Home Sales
13.4.3.1 General
13.4.3.2 Installment Sales and Other Dealer-Originated Credit
13.4.3.3 When Originating Creditor Is Not the Dealer
13.4.3.4 Effective Date and Retroactive Application
13.4.4 Arbitration Requirement’s Disclosure in Written Warranties and Service Contracts
13.4.4.1 Introduction
13.4.4.2 Eleventh Circuit Requires Disclosure in Written Warranty
13.4.4.3 Alabama Courts’ Strange Rejection of the Eleventh Circuit Ruling
13.4.4.4 Significance of Disclosure of Arbitration Requirement in Written Warranty
13.4.4.5 Does Disclosure Requirement Extend to Service Contracts and Extended Warranties?
13.4.5 Does Magnuson-Moss Prohibit Merchant’s Designation of Arbitration Service Provider?
13.4.6 Does Magnuson-Moss Warranty Act Prohibit All Binding Arbitration of Written Warranty Claims?
13.4.6.1 Overview
13.4.6.2 The Initial FTC Interpretations
13.4.6.3 Case Law Interpreting Magnuson-Moss Warranty Act and Arbitration
13.4.6.4 The 2015 FTC Affirmation of Its Prior Interpretation
13.4.7 Arbitration Requirement When Consumer Rejects or Revokes the Sale or Withholds Payments
13.4.7.1 No Arbitration of Self-Help Remedies
13.4.7.2 Does Consumer’s Cancellation of the Contract Invalidate the Arbitration Requirement?
13.4.8 Class Arbitration
13.5 Discovery
13.5.1 Interrogatories
13.5.2 Document Requests
13.5.3 Depositions
13.5.4 Deposition of the Consumer
13.6 Inspections
13.6.1 Inspection by the Buyer’s Expert
13.6.1.1 Timing of the Inspection
13.6.1.2 Selection of a Qualified Expert
13.6.1.3 Conduct of the Inspection
13.6.2 Inspection by the Seller
13.7 Settlement
13.7.1 First Considerations
13.7.2 Negotiating a Settlement
13.7.3 Mediation
13.7.4 Settlement Terms
13.7.4.1 Expenses to Include in Settlement Demand
13.7.4.2 Protecting Against Delay in Payment
13.7.4.3 Protecting the Consumer’s Credit Record
13.7.4.4 Confidentiality Clauses and Exculpatory Clauses
13.7.4.5 Settling with the Entity That Financed the Sale
13.7.5 Protecting Against the Defendant’s Bankruptcy
13.7.6 Effect of Settlement upon Other Parties
13.7.7 Preserving Attorney Fees Under Fee-Shifting Statutes
13.8 Trial
13.8.1 Most Elements of Warranty Cases Are Questions for the Trier of Fact
13.8.1.1 General
13.8.1.2 Fact Questions Relating to a Breach of Express Warranty
13.8.1.3 Fact Questions in Breach of Implied Warranties
13.8.1.4 Fact Questions When Buyer Has Canceled
13.8.1.5 Other Fact Questions in Warranty Cases
13.8.1.6 Questions of Law in Warranty Cases
13.8.2 Jury Selection
13.8.3 Evidence Issues
13.8.3.1 Introduction; Motions in Limine
13.8.3.2 Recall Notices
13.8.3.3 Evidence of “As Is” Clauses in Fraud Cases
13.8.3.4 Use of Word “Lemon” at Trial
13.8.3.5 Evidence of Other Bad Acts
13.8.3.6 Subsequent Remedial Measures
13.8.3.7 Demonstrative Evidence
13.8.3.8 History of Vehicle
13.8.3.9 Attorney Fees
13.8.3.10 Records of Vehicle’s Condition and Performance
13.8.4 Admissibility of Expert Testimony Under the Daubert Rule
13.8.4.1 The Gatekeeping Function Established by Daubert
13.8.4.2 Factors in the Court’s Evaluation of Expert Testimony
13.8.4.3 Discovery of the Expert’s Opinion
13.8.4.4 Burden of Proof and Conduct of the Daubert Hearing
13.8.4.5 Timing of the Inquiry into Admissibility
13.8.5 Presenting the Testimony of the Plaintiff’s Expert
13.8.6 Cross-Examining the Opponent’s Expert Witness
13.8.6.1 General Rules for Cross-Examining the Opponent’s Expert Witness
13.8.6.2 Bringing Out Testimony That Supports the Consumer
13.8.6.3 Discrediting the Opposing Expert on Cross-Examination
13.8.7 Trial Themes
13.8.7.1 Tie the Facts to the Policies Behind Applicable Law
13.8.7.2 Stress the Reasonableness of the Buyer’s Conduct
13.8.8 Jury Instructions and Forms
13.9 Attorney Fees
Chapter 14 New Vehicles and Motor Homes: Lemon Laws, Other Remedies
14.2 Lemon Laws: Repair, Replace, or Refund
14.2.2 Lemon Laws Are Constitutional
14.2.3 Scope of New Car Lemon Laws
14.2.3.1 Types of Vehicles Covered
14.2.3.2 Motor Homes
14.2.3.2.1 Does the lemon law apply to motor homes?
14.2.3.2.2 Are living quarters excluded?
14.2.3.3 Demonstrators and Low-Mileage Used Cars
14.2.3.4 Leased Vehicles
14.2.3.5 Out-of-State Vehicles
14.2.3.6 Covered Car Owners
14.2.3.7 Defendants Covered by New Car Lemon Laws
14.2.3.7.1 Manufacturers
14.2.3.7.2 Dealers
14.2.4 Defects Covered by New Car Lemon Laws
14.2.4.1 Breach of Express Warranties
14.2.4.2 Defects Not Covered by Manufacturer’s Express Warranty; Implied Warranties
14.2.4.3 Manufacturer’s Obligation for Dealer Warranties and Actions; Dealer’s Installation of Options
14.2.4.4 Dealer’s Installation of Accessories
14.2.4.5 Exceptions for Abuse or Neglect
14.2.4.6 Requirement That Nonconformity Cause Substantial Impairment
14.2.4.6.1 General
14.2.4.6.2 Is the standard subjective or objective?
14.2.4.6.3 Specific impairments found to be substantial
14.2.4.6.4 Proving substantial impairment and the existence of a defect
14.2.4.7 Effect of Continued Use
14.2.5 Notice Requirements
14.2.5.1 General
14.2.5.2 How Notice Delivered
14.2.5.3 Timing and Content of Notice
14.2.5.4 Consequences of Failure to Provide Notice
14.2.6 Manufacturer’s Repair Attempts
14.2.6.1 General
14.2.6.2 Costs of Transporting Car to Manufacturer
14.2.6.3 Number of Repair Attempts or Time Out of Service Allowed
14.2.6.3.1 Nature of the requirement
14.2.6.3.2 What constitutes a repair attempt
14.2.6.3.3 Determining the number of days out of service
14.2.6.3.4 Effect of presumption of reasonable number of repair attempts
14.2.7 Time Restrictions on Lemon Law Applicability
14.2.8 The Replacement or Refund Remedy
14.2.8.1 When Is the Remedy Triggered?
14.2.8.2 Must Defect Still Exist at Time of Hearing?
14.2.8.3 Who Chooses Between Replacement and Refund?
14.2.8.4 Effect of Consumer’s Inability to Return Car
14.2.8.5 Is a Replacement Vehicle Comparable?
14.2.8.6 No Allowance for Use When Consumer Receives a Replacement Vehicle
14.2.8.7 How to Calculate a Refund
14.2.8.7.1 Components of the refund
14.2.8.7.2 Trade-in vehicles and negative equity
14.2.8.7.3 Incidental and consequential damages
14.2.8.7.4 Refund calculations for leased vehicles
14.2.8.8 Deduction from Refund for Reasonable Use Allowance
14.2.8.9 Effect of a Third Party Lender or Lessor on Replace or Refund Remedy
14.2.8.10 Responsibility for Post-Cancellation Accidents
14.2.9 Informal Dispute Resolution When Manufacturer Does Not Grant Proper Relief
14.2.9.1 General
14.2.9.2 Whether the Decision Is Binding on the Manufacturer and Consumer; Appellate Review
14.2.9.2.1 Whether the decision is binding; effect of accepting an award
14.2.9.2.2 Appellate review
14.2.9.2.3 Effect of failure to appeal
14.2.9.2.4 Appeal procedures; burden of proof and evidence
14.2.9.3 Can the Mechanism Award the Consumer Attorney Fees?
14.2.9.4 Mechanism Standards
14.2.9.5 Federal Preemption
14.2.9.6 Constitutional Challenges by Manufacturers to Dispute Resolution Mechanisms
14.2.9.7 Tips on Preparing for Dispute Resolution
14.2.10 Judicial Enforcement of Replace or Refund Remedy
14.2.10.1 Dispute Resolution As a Precondition
14.2.10.2 State Versus Federal Court
14.2.10.3 Which State Court?
14.2.10.4 Right to Jury Trial
14.2.10.5 Limitations on Judicial Replace or Refund Remedy
14.2.10.6 Availability of Damages Under Lemon Laws
14.2.10.6.1 When lemon law does not explicitly afford a damages remedy
14.2.10.6.2 Lemon laws that provide for damages
14.2.10.6.3 Relation to other remedies
14.2.10.7 Effect of Limitation of Damages Clause
14.2.10.8 Multiple and Punitive Damages and Civil Penalties
14.2.10.9 Equitable Relief
14.2.10.10 Lemon Law Attorney Fees, Costs, and Expert Witness Fees
14.2.10.10.1 General
14.2.10.10.2 When fees not available under lemon law
14.2.10.10.3 Fees in settled lemon law cases
14.2.10.10.4 Calculating the fees
14.2.10.10.5 Costs and expert witness fees
14.3 Revocation Under the UCC As Alternative to Lemon Law Remedy
14.3.1 General
14.3.2 New Car Defects That Breach Merchantability Warranty
14.3.3 Is the Impairment Substantial Enough to Allow Revocation?
14.3.3.1 Major Defects
14.3.3.2 Cumulative Effect of Minor Defects
14.3.3.3 Amount of Time Car Unusable
14.3.3.4 Defect Need Not Interfere with Car’s Operation
14.3.3.5 Is One Minor Defect Sufficient?
14.4 Damages Remedies As an Alternative to Lemon Law Claims
14.4.2 Lemon Law Does Not Preempt Other Damage Claims
14.4.3 Magnuson-Moss and UCC Damage Claims
14.4.4 UDAP and Tort Claims
14.4.5 Claims Under Special State Motor Vehicle Statutes
14.5 Latent Defects Discovered After Lemon Law and Warranty Period Expire
14.5.2 Service Contract Coverage
14.5.3 Secret Warranties
14.5.4 Implied and Express Warranties Extending Beyond the Written Warranty
14.5.5 Failure to Disclose Defect As a UDAP Violation
14.5.6 Strict Liability and Negligence
14.5.7 Federal Motor Vehicle Recalls
14.5.8 Long-Term Emissions Warranties Under Federal and State Law
14.6 Undisclosed Damage to New Cars Before Delivery to the Consumer
14.7 Warranty Issues in Gray Market Vehicle Sales
14.8 Special Problems in Motor Home Cases
14.8.1 Lemon Law Claims
14.8.2 Dealing with the Multiple Manufacturers of the Vehicle
14.8.3 Preserving the Consumer’s Choice of Forum
14.8.4 Motor Home Defects
14.8.5 Trial Issues
14.9 Practice Pointers
14.9.1 Investigation and Inspection
14.9.2 Pleadings
14.9.3 Warranty Claims Against the New General Motors and Chrysler
14.9.3.1 The Bankruptcies and Creation of New Corporate Entities
14.9.3.2 The New York Bankruptcy Court’s Role in Interpreting the Scope of the Sale Orders
14.9.3.3 Liabilities Assumed by the New Entities
14.9.3.3.1 Liability for breach of warranties, lemon law claims
14.9.3.3.2 Liability for revocation of acceptance, product recalls
14.9.3.3.3 Product liability claims
14.9.3.3.4 UDAP and other non-warranty claims
14.9.3.3.5 Claims arising from concealed defects
14.9.4 Discovery
14.9.4.1 Document Requests, Interrogatories, and Requests for Admissions
14.9.4.2 Depositions
14.9.4.2.1 Selection of deponents
14.9.4.2.2 Deposing the manufacturer’s representative
14.9.4.2.3 Deposing the dealer’s service manager
14.9.4.2.4 Deposing the service technicians
14.9.4.2.5 Deposing the defense expert
14.9.5 Trial
14.9.6 Evidence and Proof Issues
14.9.7 Collecting the Judgment
Chapter 15 Used Cars
15.1 The Chapter’s Scope and Organization
15.2 Almost All Used Cars Carry a Warranty of Good Title
15.3 Express Warranties Apply Even in “As Is” Used Car Sales
15.3.2 Manufacturer’s Express Warranties
15.3.2.1 Unexpired Original Manufacturer Warranties
15.3.2.2 Manufacturer Express Warranties on Lemon Buybacks and “Certified” Used Cars
15.3.3 Express Warranties Written on Dealer’s Sales Documents
15.3.4 Dealer Representations That Vehicle Is Certified
15.3.5 Express Warranties by Description
15.3.6 Odometer Reading and Disclosures As Express Warranties
15.3.7 Express Warranties Involving Lemon Laundering
15.3.8 Express Warranties Involving Salvage Vehicles
15.3.9 The Dealer’s Oral Warranties
15.4 Implied Warranties and “As Is” Sales
15.4.1 Creation of Implied Warranties in Used Car Sales
15.4.2 Standards for Merchantability
15.4.3 Written Warranty or Service Contract May Prevent Implied Warranty Disclaimer
15.4.4 UCC Limits on Implied Warranty Disclaimers
15.4.5 Effect of FTC Used Car Rule on Implied Warranty Disclaimers
15.5 Statutory Warranties
15.5.2 Used Car Lemon Laws
15.5.2.1 Introduction
15.5.2.2 Scope
15.5.2.3 Duration of Statutory Warranty
15.5.2.4 Statutory Warranty Coverage
15.5.2.5 Omission or Disclaimer of Statutory Warranties
15.5.2.6 The Consumer’s Notice and the Dealer’s Attempt to Cure
15.5.2.7 Replacement Cars and Refunds
15.5.2.8 Private Enforcement of Used Car Lemon Law Rights
15.5.3 Applicability of New Car Lemon Laws to Used Cars
15.5.4 Other Minimum Statutory Standards for Used Cars
15.5.5 Statutes Limiting Implied Warranty Disclaimers for All Consumer Goods
15.5.6 The Effect of State Inspection Laws
15.5.7 State-by-State Summary of Special Used Car Warranty and Condition Standards
15.6 FTC Used Car Rule
15.6.2 Scope
15.6.2.1 Types of Vehicles Covered
15.6.2.2 Leased Vehicles
15.6.2.3 Covered Buyers and Sellers
15.6.2.4 Territorial Applicability
15.6.2.5 State Exemptions
15.6.3 The Buyers Guide
15.6.3.1 General
15.6.3.2 Disclosure of Warranty Coverage or Availability of Service Contract
15.6.3.3 Proving Buyers Guide Not Disclosed to Consumer
15.6.4 Disclosures Must Be Amended As Sales Terms Change
15.6.5 Buyers Guide Disclosures Must Be Repeated in Other Documents
15.6.6 Spanish Disclosures
15.6.7 Rule Prohibits Specific Deceptive Practices
15.6.8 Rule Does Not Displace Stricter State Law
15.6.9 Private Remedies for Rule Violations
15.6.9.1 State UDAP Remedies
15.6.9.2 Magnuson-Moss Warranty Act Remedies
15.7 UCC Revocation of Acceptance; Other Cancellations
15.7.1 Defects Substantial Enough to Allow Revocation
15.7.2 Other Grounds for Cancellation
15.8 Non-UCC Claims for Used Vehicle Defects
15.8.1 Magnuson-Moss Remedies
15.8.2 Special Causes of Action Under State Motor Vehicle Laws
15.8.3 UDAP Claims
15.8.3.1 Advantages of the UDAP Claim
15.8.3.2 Failure to Disclose Defects As a UDAP Claim
15.8.3.3 Compliance with Used Car Rule Does Not Prevent UDAP Claim
15.8.4 Fraud, Negligence, and Strict Liability
15.8.5 Good Faith Duty to Disclose Known Defects
15.8.6 Odometer Claims
15.8.7 Lemon Laundering Claims
15.8.7.1 Causes of Action
15.8.7.2 Determining If a Vehicle Is a Laundered Lemon
15.8.8 Salvage and Other Prior History Vehicle Claims
15.8.9 Demonstrators with Undisclosed Repair History
15.9 Collecting When Car Dealer Is Insolvent
15.9.1 Raising Dealer-Related Claims Against the Creditor
15.9.2 Collecting on the Dealer’s Bond
15.9.3 Dealer Compensation Fund
15.9.4 Reaching Dealer Assets; Filing Claims in the Dealer’s Bankruptcy
Chapter 16 Wheelchairs and Other Assistive Devices
16.2 Scope of Coverage
16.3 Are AT Device Warranty Laws Preempted by Federal Law?
16.4 What Is an AT Device Lemon?
16.5 Warranties Under AT Device Lemon Laws
16.6 Who Can Bring Claims Under AT Device Warranty Laws?
16.7 Remedies for Consumers
16.7.1 Remedies Provided by AT Device Warranty Laws
16.7.2 Affirmative Defenses
16.7.3 Prohibitions and Limitations on Laundering of AT Device Lemons
16.7.4 Other Causes of Action
Chapter 17 Manufactured Home Sales
17.1.1 Nature of the Manufactured Home Market
17.1.2 Categories of Factory Built Housing
17.1.3 Common Manufactured Home Defects
17.1.3.1 Overview
17.1.3.2 Leaking Roofs
17.1.3.3 Improperly Installed Windows and Doors
17.1.3.4 Sagging Roofs and Ceilings
17.1.3.5 Heating and Cooling Duct Work
17.1.3.6 Defective or Damaged Flooring
17.1.3.7 Electrical System
17.1.3.8 Defective Plumbing
17.1.3.9 Hardboard Siding
17.1.3.10 Improperly Installed Appliances
17.1.3.11 Formaldehyde Emissions
17.2 Applicability of Uniform Commercial Code and Magnuson-Moss Warranty Act
17.2.1 Uniform Commercial Code
17.2.2 Magnuson-Moss Warranty Act
17.2.3 What Law Applies If the UCC and Magnuson-Moss Warranty Act Do Not Apply
17.3 National Manufactured Housing Construction and Safety Standards Act
17.3.1 Overview
17.3.2 Scope
17.3.3 Construction Standards and the Consumer Manual
17.3.4 Federal Quality Assurance and Inspection Requirements
17.3.4.1 Introduction
17.3.4.2 Construction Designs
17.3.4.3 Plant Quality Assurance Program
17.3.4.4 Production Order
17.3.4.5 Permanent File for Each Home Manufactured
17.3.4.6 Records of In-Plant Inspections of Homes
17.3.4.7 Interstate Monitoring Team Reports
17.3.5 Effect of Federal Standards upon State Construction Standards
17.3.6 Private Causes of Action to Enforce Federal Standards
17.3.7 Effect of Federal Standards on State Law Claims
17.3.7.1 Private Claims When Manufacturer Did Not Comply with Federal Standards
17.3.7.2 Private Claims When Manufacturer Complied with Federal Standards
17.3.8 Administrative Enforcement of HUD Standards
17.3.9 Federally Mandated Dispute Resolution System
17.3.9.1 Statutory Requirements and the Role of the States
17.3.9.2 HUD’s Dispute Resolution System
17.3.9.3 Requirements for State-Operated Programs
17.4 Express and Statutory Warranties for Manufactured Homes
17.4.1 Express Warranties
17.4.2 State Manufactured Home Warranty Laws
17.4.3 Other State Standards for Manufactured Homes
17.4.4 Manufactured Homes Purchased with Federally Insured Loans
17.5 Implied Warranties for Manufactured Homes
17.5.2 Implied Warranty of Merchantability
17.5.2.1 Creation of the Implied Warranty of Merchantability in Manufactured Home Sales
17.5.2.2 Role of HUD Standards
17.5.2.3 Standards for Merchantability of Manufactured Homes
17.5.3 Implied Warranty of Fitness for a Particular Purpose
17.5.4 Disclaimer of Implied Warranties
17.6 Revocation of Acceptance of Manufactured Homes
17.6.1 Overview
17.6.2 Manufactured Home Defects That Justify Revocation of Acceptance
17.6.3 Effect of Repair or Replace Clause
17.6.4 Time for Revocation
17.6.5 Use of the Home After Revocation
17.6.6 Sale of the Home by the Buyer After Revocation
17.6.7 Revocation As Against Manufacturer and Dealer
17.7 Defects Caused by Transportation and Setup
17.7.1 How Transportation and Setup Can Damage Manufactured Homes
17.7.2 Federal Standards for Installation and for State Installation Programs
17.7.3 State Standards for Installation
17.7.4 Disputes About Responsibility for Defects Caused by Transportation and Setup
17.7.5 Liability of Manufacturer
17.7.6 Liability of Dealer
17.7.7 Liability of Independent Transportation and Setup Company
17.8 Litigating Manufactured Home Breach of Warranty Cases
17.8.1 Administrative Remedies
17.8.2 Pleading Causes of Action in Manufactured Home Cases
17.8.2.1 UCC and Magnuson-Moss Claims
17.8.2.2 UDAP Claims
17.8.2.3 Other State Statutory Claims
17.8.2.4 Tort Claims
17.8.2.5 Claims Under Federal and State Credit Statutes
17.8.2.5.1 Claims under state credit statutes
17.8.2.5.2 The Truth in Lending Act
17.8.2.5.3 The Home Ownership and Equity Protection Act (HOEPA)
17.8.2.5.4 The Real Estate Settlement Procedures Act
17.8.2.6 Claims Against Creditor That Financed the Sale
17.8.3 Discovery
17.8.4 Proof of Defective Condition at Delivery
17.8.5 Proof of Damages
17.8.5.1 Diminution in Value
17.8.5.2 Incidental Damages
17.8.5.3 Consequential Damages
17.8.5.4 Remedy Limitation Clauses
17.8.6 Deduction of Damages As Self-Help Remedy for Buyer
17.8.7 Attorney Fees
17.8.8 Recovery Against Bond or from Special Fund
Chapter 18 New Home Sales
18.1 Limited Applicability of the Uniform Commercial Code
18.2 Limited Applicability of the Magnuson-Moss Warranty Act
18.3 Common Law Implied Warranties of Quality in the Sale of a New Home
18.3.1 Policy Basis to Abandon Caveat Emptor
18.3.2 Overview of Modern Common Law Implied Warranties
18.3.3 Which Buyers Can Assert the Warranty?
18.3.3.1 Does the Warranty Apply Only to Buyers for Their Own Use?
18.3.3.2 Do Subsequent Buyers Have Rights Under the Warranty?
18.3.4 Which Sellers Give the Warranty?
18.3.4.1 Do Only Professional Builders Provide the Warranty?
18.3.4.2 Other Parties Liable Under the Warranty
18.3.4.3 Is a Warranty Provided If the Buyer Already Owns the Land?
18.3.5 What Property Does the Warranty Cover?
18.3.5.1 Application of Implied Warranty of Habitability to Used Homes
18.3.5.2 Multifamily Homes, Condominiums, Non-Living Areas, Land, and Plans
18.3.6 When Is an Implied Warranty Breached?
18.3.6.1 Breach Should Be Liberally Interpreted
18.3.6.2 Breach of Warranty of Habitability
18.3.6.3 Breach of Warranty of Good and Workmanlike Construction
18.3.6.4 Common Defects That Breach the Warranties
18.3.7 Disclaimers of the Implied Warranties
18.3.8 Express Warranty, Merger Clause, or Transfer of Deed Do Not Nullify Implied Warranty
18.3.9 Duration of the Implied Warranties
18.3.10 Notice to Builder of Defects
18.4 Statutory Warranties for Homes
18.4.1 General
18.4.2 Parties Liable
18.4.3 Property Covered
18.4.4 Nature of the Statutory Warranty
18.4.5 Disclaimers
18.4.6 Time Limits
18.4.7 Other Preconditions to Liability
18.4.8 Remedies
18.4.9 Relation to Common Law Remedies
18.5 Condominium-Specific Warranty Statutes
18.5.1 The Uniform Common Interest Ownership Act
18.5.2 State Adoptions
18.6 Express Warranties
18.6.1 General
18.6.2 Common Forms of Express Warranties
18.6.2.1 Houses Purchased with Federally Insured Loans
18.6.2.2 Third Party Home Warranty Programs
18.6.3 Limitations on Express Warranty Rights
18.6.3.1 The Merger Doctrine
18.6.3.2 Merger and Integration Clauses; Disclaimers
18.6.3.3 Notice Requirements and Other Warranty Restrictions
18.6.3.4 Puffing
18.7 Litigating New Home Breach of Warranty Cases
18.7.1 Additional Causes of Action to Plead
18.7.1.1 UDAP Claims
18.7.1.2 Tort Claims
18.7.1.3 Breach of Contract Claims
18.7.1a State Right to Repair Statutes
18.7.2 Proof of Defects
18.7.3 Direct Damages
18.7.3.1 Repair or Replacement
18.7.3.2 Benefit of the Bargain
18.7.3.3 Which Measure Will the Court Select?
18.7.3.4 Doctrine of Waste
18.7.4 Consequential Damages
18.7.5 Failure to Mitigate As a Defense
18.7.6 Punitive Damages
18.7.7 Specific Performance and Rescission
18.7.8 Attorney Fees
Chapter 19 Automobile Repair, Home Improvements, and Other Services
19.2 Applicability of UCC Article 2 and Magnuson-Moss Warranty Act to Service Transactions
19.2.1 Magnuson-Moss Applicability
19.2.2 UCC Article 2 Applicability
19.2.3 UCC Applicability by Analogy
19.3 UCC Applicability to Mixed Goods and Services Transactions
19.3.1 Introduction
19.3.2 Courts That Treat the Contract As a Whole
19.3.2.1 When the Contract Is Predominantly for Goods
19.3.2.2 When the Contract Is Predominantly for Services
19.3.3 Courts That Apply Different Law to the Goods and Services Components
19.3.4 Determining the Predominant Purpose
19.3.4.1 Parties’ Intent As Determining Predominant Purpose
19.3.4.2 Finished Product As Determining Predominant Purpose
19.4 Common Law Warranties
19.4.1 Introduction
19.4.2 Common Law Express Warranties
19.4.3 Common Law Implied Warranties
19.4.4 Damages for Breach of Common Law Warranties
19.5 Negligence in Service Transactions
19.5.1 Advantages and Disadvantages of a Negligence Claim
19.5.2 The Negligence Cause of Action
19.5.3 Parties Liable
19.5.4 Proving Damages
19.6 Breach of Bailment Contract
19.7 UDAP and Fraud Claims
19.8 Special Issues Concerning Home Improvement Contracts
19.8.1 Canceling the Contract
19.8.1.1 UCC Revocation, Unconscionability, and Cancellation Based upon Misrepresentation
19.8.1.2 Truth in Lending Rescission
19.8.1.3 FTC Cooling-Off Rule for Off-Premises Sales
19.8.1.4 State Home Solicitation Statutes
19.8.1.5 Credit Repair Organization Statutes
19.8.2 Failure to Complete Work and Completion Certificates
19.8.3 Special Relevance of Building Codes and Permits
19.8.4 State Home Improvement Statutes and Regulations
19.8.5 State UDAP Statutes and Regulations
19.8.6 Other State Statutes
19.8.7 Dealing with the Home Improvement Contractor’s Insolvency
19.8.7.1 Introduction
19.8.7.2 Contractor Bonds and Collection Against Individuals
19.8.7.3 Piercing the Corporate Veil
19.8.7.4 Raising Contractor-Related Claims and Defenses Against the Holder of the Obligation
19.8.7.5 Other Theories of Lender Liability
19.8.8 Home Improvement Contract Litigation Tips
19.8.8.1 Investigating the Case
19.8.8.1.1 The client interview and legal analysis
19.8.8.1.2 The consumer’s expert witness and repair estimates
19.8.8.1.3 Photographs and witnesses
19.8.8.1.4 The opposing parties
19.8.8.2 Pleading Tips
19.8.8.3 Dealing with Mortgages and Liens on the Consumer’s Home
19.8.8.4 Discovery
19.9 Special Issues Concerning Automobile Repair
19.9.1 Repair Shop Refusal to Return Car Until Repair Bill Paid
19.9.1.1 Consumer’s Remedy When Repair Shop Has No Right to Retain the Car
19.9.1.2 Stopping a Credit Card Payment for Repairs
19.9.2 Special Protections When Repair Shop Offers Written Warranty Covering Parts and Labor
19.9.3 State Automobile Repair Laws
19.9.3.1 General
19.9.3.2 Disclosure and Regulation Laws
19.9.3.2.1 Scope
19.9.3.2.2 Required disclosures
19.9.3.2.3 Other requirements
19.9.3.2.4 Private remedies
19.9.3.2.5 Administrative enforcement
19.9.3.3 Repair Shop Licensing
19.9.3.4 Mechanic Certification or Licensing
19.9.4 State UDAP Statutes
19.9.5 Manufacturer’s Liability
19.9.5.1 Liability for Authorized Dealer’s Negligent Repair
19.9.5.2 Liability for Repair Costs for Recalls or Emissions Control Equipment Failure
Chapter 20 Service Contracts, Extended Warranties, and Mechanical Breakdown Insurance
20.1 Getting Started
20.1.1 Introduction
20.1.2 Relationship of Service Contracts to Extended Warranties and Mechanical Breakdown Insurance
20.1.3 Parties to a Service Contract Transaction
20.2 Distinguishing Service Contracts from Warranties
20.3 Is a Service Contract Regulated As Insurance?
20.3.1 First Considerations
20.3.2 Factors Indicating Whether a Service Contract Is Regulated As Insurance
20.4 Disputing Grounds for Coverage Denial
20.4.1 Compare Service Contract Language with Stated Grounds for Coverage Denial
20.4.2 Computing the Contract’s Time Period
20.4.3 When Service Contract’s Restrictions Are Not Conspicuous
20.4.4 When the Contract Is at Variance with Prior Representations
20.4.5 Disputing the Accuracy of the Obligor’s Product Inspection
20.4.6 Failure to Obtain Prior Approval for Repairs
20.5 Remedies for a Contractor’s Failure to Pay a Covered Claim
20.5.1 Informal Approaches
20.5.2 Shaping the Consumer’s Legal Claim
20.5.3 Mandatory Arbitration Requirements
20.5.4 Magnuson-Moss Warranty Act Remedies
20.5.5 UDAP Statutes
20.5.6 Breach of Duty of Good Faith; Special Application to Service Contracts
20.5.7 Unfair Insurance Claims Settlement Practices Statutes; Licensing Requirements
20.5.8 State Service Contract Statutes
20.6 Shoddy Repair Work
20.7 Third Parties Liable for Service Contract Obligor’s Failure to Pay a Claim
20.7.1 Introduction
20.7.2 Insurance Coverage When Contract Owner Is Insolvent
20.7.3 Service Contract Administrator Liability
20.7.4 Retailer Liability
20.7.5 Liability of Other Parties
20.7.6 Liability of Holder of Installment Sales Contract
20.8 Refunds upon Service Contract Cancellation
20.9 Automatic Renewal
20.10 Service Contract Rights of Product’s Subsequent Purchaser
Chapter 21 Leases
21.1 First Considerations
21.1.1 Scope of This Chapter
21.1.2 Types of Consumer Leases
21.1.3 Consumer Leasing Warranties in a Nutshell
21.2 Sources of Lease Warranty Law
21.2.1 UCC Article 2A on Leases
21.2.2 UCC Article 2
21.2.3 Magnuson-Moss Warranty Act
21.2.4 State Lemon Laws
21.2.5 Federal Consumer Leasing Act
21.2.6 UCC Article 2A Unconscionability
21.2.7 UDAP Statutes, Tort Law, and State Leasing Acts
21.3 Lessor’s Warranty Obligations
21.3.2 Special Treatment for Finance Leases
21.3.3 The Lessor’s Warranties
21.3.4 Disclaimer of Lessor’s Implied Warranties
21.3.5 Damages for Lessor’s Breach of Warranty
21.3.6 Rejection and Revocation of Acceptance
21.3.6.1 Introduction
21.3.6.2 Lessee’s Right to Reject
21.3.6.3 Lessee’s Right to Revoke Acceptance
21.3.6.4 Specific Grounds for Revocation
21.3.6.5 Consumer Rights upon Rejection or Revocation
21.3.7 Lessee’s Right to Withhold Lease Payments
21.3.8 Lessee’s Remedies Are Cumulative
21.4 Manufacturer Liability to the Lessee
21.5 Retailer’s Warranty Obligations When Retailer Not the Originating Lessor
21.6 Raising Warranty Defenses Against the Entity Holding the Lease
21.6.1 Consumer Can Raise Initial Lessor’s Warranty Obligations Against Lessor’s Assignee
21.6.1.1 Raising the Lessor’s Warranty Obligation as a Defense to Payment
21.6.1.2 Can the Right to Raise Defenses Against Assignees Be Waived?
21.6.1.3 Can Lessee Raise Affirmative Claims Against the Lessor’s Assignee?
21.6.2 Can Lessee Raise Manufacturer or Retailer-Related Warranty Defenses Against the Lessor?
21.6.2.1 Introduction
21.6.2.2 Consumer Leasing Act and Article 2A Liability for Inaccurate Disclosure of Manufacturer Warranties
21.6.2.3 Lessor Liability Based on Incorporation of Manufacturer or Retailer Warranties into the Lease or Based on Close-Connectedness
Appendix A Magnuson-Moss Warranty Act
§ 2301. Definitions
§ 2302. Rules governing contents of warranties
§ 2303. Designation of written warranties
§ 2304. Federal minimum standards for warranties
§ 2305. Full and limited warranting of a consumer product
§ 2306. Service contracts; rules for full, clear and conspicuous disclosure of terms and conditions; addition to or in lieu of written warranty
§ 2307. Designation of representatives by warrantor to perform duties under written or implied warranty
§ 2308. Implied warranties
§ 2309. Procedures applicable to promulgation of rules by Commission
§ 2310. Remedies in consumer disputes
§ 2311. Applicability to other laws
§ 2312. Effective dates
Appendix B Magnuson-Moss Warranty Act Rules and Interpretations
16 C.F.R. Part 700
§ 700.1 Products covered.
§ 700.2 Date of manufacture.
§ 700.3 Written warranty.
§ 700.4 Parties “actually making” a written warranty.
§ 700.5 Expressions of general policy.
§ 700.6 Designation of warranties.
§ 700.7 Use of warranty registration cards.
§ 700.8 Warrantor’s decision as final.
§ 700.9 Duty to install under a full warranty.
§ 700.11 Written warranty, service contract, and insurance distinguished for purposes of compliance under the Act.
§ 700.12 Effective date of 16 CFR parts 701 and 702.
16 C.F.R. Part 701
§ 701.1 Definitions.
§ 701.2 Scope.
§ 701.3 Written warranty terms.
§ 701.4 Owner registration cards.
16 C.F.R. Part 702
§ 702.1 Definitions.
§ 702.2 Scope.
§ 702.3 Pre-sale availability of written warranty terms.
16 C.F.R. Part 703
§ 703.1 Definitions.
§ 703.2 Duties of warrantor.
§ 703.3 Mechanism organization.
§ 703.4 Qualification of members.
§ 703.5 Operation of the Mechanism.
§ 703.6 Recordkeeping.
§ 703.7 Audits.
§ 703.8 Openness of records and proceedings.
Appendix C National Manufactured Housing Construction and Safety Standards Act
§ 5401. Findings and purposes
§ 5402. Definitions
§ 5403. Construction and safety standards
§ 5404. Manufactured home installation
§ 5409. Prohibited acts; exemptions
§ 5412. Noncompliance with standards or defective nature of manufactured home; administrative or judicial determination; repurchase by manufacturer or repair by distributor or retailer; reimbursement of expenses, etc., by manufacturer for failure to comp
§ 5413. Inspections and investigations for promulgation or enforcement of standards or execution of other duties
§ 5414. Notification and correction of defects by manufacturer
§ 5415. Certification by manufacturer of conformity of manufactured home with standards; form and placement of certification
§ 5416. Consumer’s manual; contents
§ 5421. Prohibition on waiver of rights
§ 5422. State enforcement
Appendix D FTC Used Motor Vehicle Trade Regulation Rule
Introduction and Listing of Provisions
§ 455.1 General duties of a used vehicle dealer; definitions.
§ 455.2 Consumer sales—window form.
§ 455.3 Window form.
§ 455.4 Contrary statements.
§ 455.5 Spanish language sales.
§ 455.6 State exemptions.
§ 455.7 Severability.
FIGURE 1 TO PART 455—“AS IS”–NO DEALER WARRANTY Buyers Guide (English)
FIGURE 2 TO PART 455—IMPLIED WARRANTIES ONLY Buyers Guide (English)
FIGURE 3 TO PART 455—Back of Buyers Guide (English)
FIGURE 4 TO PART 455—“AS IS”–NO DEALER WARRANTY Buyers Guide (Spanish)
FIGURE 5 TO PART 455—IMPLIED WARRANTIES ONLY Buyers Guide (Spanish)
FIGURE 6 TO PART 455—Back of Buyers Guide (Spanish)
Old Buyers Guide
Appendix E Uniform Commercial Code Warranty Provisions
E.2 2001 Revised Version of Article 1—Selected Provisions and Official Comments
Section 1-101. Short Titles.
Section 1-102. Scope of Article.
Section 1-103. Construction of [Uniform Commercial Code] to Promote Its Purposes and Policies; Applicability of Supplemental Principles of Law.
Section 1-108. Relation to Electronic Signatures in Global and National Commerce Act.
PART 2. GENERAL DEFINITIONS AND PRINCIPLES OF INTERPRETATION
Section 1-201. General Definitions.
Section 1-202. Notice; Knowledge.
Section 1-203. Lease Distinguished From Security Interest.
Section 1-204. Value.
Section 1-205. Reasonable Time; Seasonableness.
PART 3. TERRITORIAL APPLICABILITY AND GENERAL RULES
Section 1-302. Variation by Agreement.
Section 1-303. Course of Performance, Course of Dealing, and Usage of Trade.
Section 1-304. Obligation of Good Faith.
Section 1-305. Remedies to Be Liberally Administered.
Section 1-306. Waiver or Renunciation of Claim or Right After Breach.
E.3 Article 2—Selected Provisions and Official Comments
Section 2-102. Scope; Certain Security and Other Transactions Excluded From This Article.
Section 2-103. Definitions and Index of Definitions.
Section 2-104. Definitions: “Merchant”; “Between Merchants”; “Financing Agency”.
Section 2-105. Definitions: Transferability; “Goods”; “Future” Goods; “Lot”; “Commercial Unit”.
Section 2-106. Definitions: “Contract”; “Agreement”; “Contract for Sale”; “Sale”; “Present Sale”; “Conforming” to Contract; “Termination”; “Cancellation”.
Section 2-107. Goods to Be Severed From Realty: Recording.
Section 2-201. Formal Requirements; Statute of Frauds.
Section 2-202. Final Written Expression: Parol or Extrinsic Evidence.
Section 2-208. Course of Performance or Practical Construction.
Section 2-209. Modification, Rescission and Waiver.
PART 3. GENERAL OBLIGATIONS AND CONSTRUCTION OF CONTRACT
Section 2-302. Unconscionable Contract or Clause.
Section 2-312. Warranty of Title and Against Infringement; Buyer’s Obligation Against Infringement.
Section 2-313. Express Warranties by Affirmation, Promise, Description, Sample.
Section 2-314. Implied Warranty: Merchantability; Usage of Trade.
Section 2-315. Implied Warranty: Fitness for Particular Purpose.
Section 2-316. Exclusion or Modification of Warranties.
Section 2-317. Cumulation and Conflict of Warranties Express or Implied.
Section 2-318. Third Party Beneficiaries of Warranties Express or Implied.
PART 5. PERFORMANCE
Section 2-508. Cure by Seller of Improper Tender or Delivery; Replacement.
Section 2-515. Preserving Evidence of Goods in Dispute.
PART 6. BREACH, REPUDIATION AND EXCUSE
Section 2-601. Buyer’s Rights on Improper Delivery.
Section 2-602. Manner and Effect of Rightful Rejection.
Section 2-604. Buyer’s Options as to Salvage of Rightfully Rejected Goods.
Section 2-605. Waiver of Buyer’s Objections by Failure to Particularize.
Section 2-606. What Constitutes Acceptance of Goods.
Section 2-607. Effect of Acceptance; Notice of Breach; Burden of Establishing Breach After Acceptance; Notice of Claim or Litigation to Person Answerable Over.
Section 2-608. Revocation of Acceptance in Whole or in Part.
PART 7. REMEDIES
Section 2-706. Seller’s Resale Including Contract for Resale.
Section 2-711. Buyer’s Remedies in General; Buyer’s Security Interest in Rejected Goods.
Section 2-712. “Cover”; Buyer’s Procurement of Substitute Goods.
Section 2-713. Buyer’s Damages for Non-delivery or Repudiation.
Section 2-714. Buyer’s Damages for Breach in Regard to Accepted Goods.
Section 2-715. Buyer’s Incidental and Consequential Damages.
Section 2-717. Deduction of Damages From the Price.
Section 2-719. Contractual Modification or Limitation of Remedy.
Section 2-720. Effect of “Cancellation” or “Rescission” on Claims for Antecedent Breach.
Section 2-721. Remedies for Fraud.
Section 2-723. Proof of Market Price: Time and Place.
Section 2-724. Admissibility of Market Quotations.
Section 2-725. Statute of Limitations in Contracts for Sale.
E.4 1990 Version of Article 2A—Selected Provisions and Official Comments
Section 2A-102. Scope.
Section 2A-103. Definitions and Index of Definitions.
Section 2A-104. Leases Subject to Other Law.
Section 2A-107. Waiver or Renunciation of Claim or Right After Default.
Section 2A-108. Unconscionability.
PART 2. FORMATION AND CONSTRUCTION OF LEASE CONTRACT
Section 2A-209. Lessee Under Finance Lease as Beneficiary of Supply Contract.
Section 2A-210. Express Warranties.
Section 2A-212. Implied Warranty of Merchantability.
Section 2A-213. Implied Warranty of Fitness for Particular Purpose.
Section 2A-214. Exclusion or Modification of Warranties.
Section 2A-215. Cumulation and Conflict of Warranties Express or Implied.
Section 2A-216. Third-Party Beneficiaries of Express and Implied Warranties.
PART 5. DEFAULT
SUBPART A. IN GENERAL
Section 2A-506. Statute of Limitations.
SUBPART B. DEFAULT BY LESSOR
Section 2A-508. Lessee’s Remedies.
Section 2A-509. Lessee’s Rights on Improper Delivery; Rightful Rejection.
Section 2A-512. Lessee’s Duties as to Rightfully Rejected Goods.
Section 2A-513. Cure by Lessor of Improper Tender or Delivery; Replacement.
Section 2A-514. Waiver of Lessee’s Objections.
Section 2A-515. Acceptance of Goods.
Section 2A-516. Effect of Acceptance of Goods; Notice of Default; Burden of Establishing Default After Acceptance; Notice of Claim or Litigation to Person Answerable Over.
Section 2A-517. Revocation of Acceptance of Goods.
Section 2A-518. Cover; Substitute Goods.
Section 2A-519. Lessee’s Damages for Non-delivery, Repudiation, Default, and Breach of Warranty in Regard to Accepted Goods.
Section 2A-520. Lessee’s Incidental and Consequential Damages.
E.5 Revised Article 9—Section 9-110 and Official Comments
Section 9-110. Security Interests Arising under Article 2 or 2A.
Appendix F State-by-State Analysis of New Car Lemon Laws
Appendix G State-by-State Analysis of Service Contract Laws and Regulations
Appendix H State-by-State Analysis of New Home and Condominium Warranty Laws
Appendix I Sample Notices of Rejection, Revocation, or Deduction of Damages
I.1 Introduction
I.2 Sample Notice of Rejection or Revocation of Acceptance
I.3 Sample Notice That Consumer Is Deducting Damages from the Outstanding Balance
Appendix J Sample Pleadings
J.1 Sample Complaints
J.2 Sample Document Requests and Interrogatories
J.2.1 Proper Use
J.2.2 Documents Requests and Interrogatories Found Online
J.3 Sample Requests for Admissions and Deposition Transcripts
J.4 Sample Trial Documents
Appendix K Useful Warranty Law Websites
Consumer Advocacy Organizations
Investigating Vehicle Safety and Defects
Other Vehicle Pricing Information
Quick Title Searches
General Information About Dealers and Creditors
Contact Information for Car Manufacturers
Other Vehicle, Dealer, and Manufacturer Information
Litigation Aids
Wreck, Salvage and Flood
Used Car Defects
Hidden Repair History, Mechanical Defects
New Car Lemons
Discovery Response
Deposition Notice
Jury Instructions and Forms
Post-Trial Brief
Arb. Confirmation
FTC Letters and Advisory Opinions
FTC Trade Regulation Rules
FTC Used Car Rule
Manufactured Housing Construction Standards
State Statutes, State Interpretations
While the UCC, the Magnuson-Moss Warranty Act, lemon laws, and manufactured home warranty statutes provide the core consumer warranty rights, a state unfair and deceptive acts and practices (UDAP) claim is often indispensable when the consumer’s rights under those other core statutes are overly restricted by warranty disclaimers, limitations of remedies, privity requirements, the parol evidence rule, and notice requirements.46 As described in more detail in § 11.1.1, infra, UDAP statutes are state laws of general applicability that prohibit deceptive practices. Most also prohibit unfair practices, and a substantial minority prohibit unconscionable practices. They usually provide strong remedies, such as attorney fees and multiple or minimum damages, and apply to oral misrepresentations, the failure to disclose material facts, and unfair practices irrespective of any contractual disclaimers or limitations of UCC restrictions on consumer warranty rights.
This treatise, in § 11.1, infra, briefly summarizes UDAP law as it relates to warranty issues. Throughout the book, UDAP statutes are also mentioned as an alternative remedy when appropriate. For more detail on UDAP statutes, including summaries of every state’s statute, and analysis of scope, remedies, and litigation issues, see NCLC’s Unfair and Deceptive Acts and Practices.47
A fraud claim is another alternative to a UCC or Magnuson-Moss claim. Its primary benefits are its broad scope covering almost any type of transaction (as long as the elements of fraud are met) and the availability of punitive damages. Section 11.4, infra, examines various branches of the law of deceit, including negligent misrepresentation, innocent misrepresentation, and misrepresentation based on the failure to disclose.
46 {34} See § 11.1.1.2, infra.
47 {35} National Consumer Law Center, Unfair and Deceptive Acts and Practices (9th ed. 2016), updated at www.nclc.org/library.