The Fine Print – What To Do When Life Hands You a Lemon

“Dear Attorney,

I bought a car six months ago from a “reputable” used car dealer. I paid $5054.00 for the car and signed a contract stating the car was sold “as-is”. I also paid the dealer $695.00 extra for a service contract to cover repairs for 2 years or 24,000 miles. After buying the car, it broke down. Six times! Now the dealer is saying the car cannot be repaired and I am out of luck. He won’t return my money and I have a car I cannot drive. I have not had the car for 2 years or 24,000 miles! Do I have any recourse? Out of and Money in Matthews.


Dear Out of Luck and Money,

You say your written contract states that the used car is sold “as is”, but that you also entered into a service contract the time you purchased the vehicle.  Under the North Carolina Uniform Commercial Code, an “as is” sale is effective to disclaim warranties of merchantability and express warranties.  While you do not have recourse under these North Carolina remedies, you do have recourse under Federal law.  In your situation, the Magnuson-Moss Act applies.  Under this Act, merchants, such as car dealers, may not disclaim warranties, including the warranty of merchantability, on products sold to consumers, if the parties enter into a written service contract for the product.  Thus, the dealer’s attempt to disclaim the warranty of merchantability by an “as is” sale was ineffective.  Second, the dealer may be liable for violating the warranty of merchantability by selling you a car that was not roadworthy, and which he could not repair.

What are the lessons learned? First, consumers should be careful about buying products “as is” because such sales exclude state law warranties.  You may be in a better position since you have a service contact, but this may not always be the case.  Second, when buying a used car or any item “as-is” carefully read the details in the agreement so as to understand what your legal recourse will be if the item purchased is a dud.  In terms of moving forward, I would recommend contacting the Better Business Bureau, if the dealer is a member or alternatively, contacting the State Attorney General’s office to file a complaint.  If all else fails, a lawyer be the necessary next step.  Good Luck!

Laura H. Budd, Esq. is a managing partner experienced in corporate law and civil litigation at Weaver | Budd, Attorneys at Law.  To schedule a consultation with her, please call (704) 841-0760. 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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