The Fine Print – Warranties…a Guarantee?

Warranties - a Guarantee?

“Dear Attorney,

I bought a used car, and it came with a warranty.  At least, that is what the dealer told me when I bought it.  When I took the car in for repairs I was informed the warranty was a limited one and had a maximum amount it covered for repairs.  Then the repair shop told me the repair costs were more than the warranty covered! What is going on and can the dealer do this?” Sharon M. from Matthews

“Goods” are tangible personal property such as cars, food, computers, and kitchen appliances. They often have “warranties” – promises or guarantees merchants make (or don’t make) about the products they sell.  If you believe the quality and reliability of the goods you buy is important, you need to know that the law permits sellers to exclude warranties from contracts for sale.

There are two general types of warranties: express and implied.  An “express warranty” means that the product will uphold any statement of fact or promise made by the seller.  “Implied warranty of merchantability” means that the product is meant to be used for its stated purpose.  “Implied warranty of fitness for a particular purpose” means that the product is suitable for a particular purpose if the seller knows of the buyer’s reason for the purchase, and the buyer is relying on the seller’s skill or judgment to select a suitable product.

The UCC allows a seller to disclaim warranties.  However, a disclaimer of express warranties is ineffective if it is inconsistent with any express warranties made in the contract of sale which has some description of what is being sold. Implied warranties may also be disclaimed, but if in writing, must be “conspicuous.” All warranties may be excluded by use of language, such as “as is” or “with all faults.”

Additionally, for an instance of breach of warranty, a seller may limit the remedies that are otherwise available under the UCC.  For example, a merchant can limit these remedies to refunding the price paid for the product or to repairing or replacing defective goods or parts.

Bottom line: for warranties and all contracts, know the terms and conditions.  Pay special attention to language in a contract that excludes warranties or limits the buyer’s remedies for breach of warranty.

Disclaimer:  The actual outcome of any legal dispute depends on the facts of the specific case, and this general discussion is no substitute for seeking the advice of a lawyer in any specific case. This information is based on North Carolina’s version of Article 2 of the Uniform Commercial Code (UCC) that governs contracts for the sale of goods.

Laura H. Budd, Esq. is a managing partner skilled in contract law and civil litigation at Weaver | Budd, Attorneys at Law.  To schedule a consultation with her, please call (704) 841-0760. The information contained in this article is general in nature and not to be taken as legal advice, nor to establish an attorney-client relationship between the reader and Laura H. Budd or Weaver | Budd, Attorneys at Law.

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