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Working legally with warranties

Protecting your shop goes beyond Magnuson-Moss
Wednesday, April 18, 2012 - 14:39
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Photos: Nick M Do

IN THE never ending competition between new car dealers and independent automotive repair shops, most of us of the automotive world are aware of the Magnuson-Moss Act of 1975, though frequently only insofar as it applies to our ability to do repairs and services without impacting a customer's new car warranty. Certainly this is a great place to start a discussion on the legal side and impact of warranties on the tire and automotive repair world, but it only scratches the surface of legal issues that have every potential to impact our ability to do business.

 

A warranty is our promise, as a seller, to stand behind our products and sold services. It is our commitment to correct problems that occur on products we sell and sold services we provide. Federal law and most state laws recognize two kinds of warranties, implied and express.

Express warranties are not read into your sales contracts by state law as implied warranties are; you explicitly offer these warranties in the course of a sales transaction. They are promises and statements we voluntarily make as sellers about products we sell or commitments we make to remedy defects and expressed consumer complaints. They range from advertising to formal certificates, either verbally or in writing.

In this it is important to note that only written warranties are covered by Magnuson-Moss. "If these brakes ever wear out, I guarantee I am going to feel really bad about it!" Though very important, express warranties offer unfortunate opportunities to get ourselves in trouble. Being specific and equitable is very important to consumer satisfaction and our viability.

Implied warranties are tied to state law and are an unspoken, unwritten promise between our customer and us as a seller. They are based on the common law principle of "fair value for money spent." Further, there are two types of implied warranties. They are the implied warranty of merchantability and the implied warranty of fitness for a particular purpose.

The implied warranty of merchantability is a seller's promise that the items he sells will do the things they are supposed to do, that there is nothing significantly wrong with them and that they are fit to be sold. The warranty laws in most states say that sellers make this promise automatically every time they sell something they are in business to sell.

If you, as a tire retailer, sell a truck tire, you are promising that the tire is serviceable, in good condition and will do the things a customer could reasonably expect a tire to do. That promise is implied but enforceable, without you ever having opened your mouth.

The implied warranty for fitness for a particular purpose is a promise that most state laws say you, as a seller, make when a customer relies on your advice that a product can be used for a specific purpose. An example from the automotive repair world might be in our recommending a heavier weight oil for severe driving conditions. If the oil were to prove unsatisfactory or if engine damage were to result from our recommendation, our implied warranty for fitness for a particular service likely would find us in breach and possibly responsible for any damage to the engine.

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