Breach of Warranty Cases in Small Claims Court

Understand the different types of warranty claims that might apply to your defective product claim.

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In simplest terms, a warranty is a promise by the manufacturer or seller of a product that the product is of a certain quality or that they will repair the product for a stated period of time. The manufacturer or seller is legally obligated to live up to its promise if the product turns out to have a defect that's covered by the warranty. Warranty law is extremely confusing, even to lawyers. A principal reason for this is that three separate warranty laws can apply to the retail sale of consumer goods. The unhappy result is that, short of presenting a major legal treatise, it's impossible to thoroughly explain warranty law. Instead, this article will review the basic rules.

Types of Warranties

There are a number of different types of warranties that might apply to your defective product.

Express Written Warranty

If a new or used consumer product comes with an express written warranty, you have the right to rely on what it says. The express warranty may be the seller's written description of the product that you relied on when deciding to purchase it (for example, a promise that a car is defect free). Or, the express warranty may be the manufacturer's or retailer's written promise to maintain the performance of the product (for example, a promise to repair or replace defective parts for a stated period).

Express Oral Warranty

If a seller makes an oral statement describing a product's features (for example, "these tires will last at least 25,000 miles" or "this car is in running condition") or what it will do ("it will work for two years"), and you rely on the statement in deciding to purchase the product, the oral statement is a warranty that you have the right to rely on. It is important to understand that this is true even though a more limited written warranty printed on the package states there are no other warranties. You must be able to prove that the seller made the oral statement; if you can't, the written warranty and its limitations may be effective.

Implied Warranty

In most retail sales of consumer products, an implied warranty exists stating that the product is fit for the ordinary purposes for which it is used (for example, that a lawn mower will cut grass, a tire will hold air, and a calculator will add and subtract). This warranty exists in addition to any express written and oral warranties to maintain the product's performance. This applies even if there is a statement (often called a "warranty disclaimer") printed on the product or packaging saying no warranties exist beyond the express written warranty, or that no warranty exists at all, or that all implied warranties are specifically disclaimed.

When a Breach Occurs

If you believe any warranty has been breached–for example, a DVD player with a six-month warranty on parts and labor breaks the day after the purchase–you should notify the seller and manufacturer in writing, keeping copies of both letters. Give them a reasonable chance to make necessary repairs or replace the defective product. Thirty days to accomplish this is usually considered reasonable. If they fail to do so, it's time to think about filing in small claims court.

In considering whether and how to pursue a breach of warranty case, realize that small claims court judges tend to evaluate warranty disputes based on their own broad view of what is fair under the circumstances. In other words, if you purchase goods that are clearly defective or do not accomplish the task the seller claimed they would accomplish (either in an advertisement or a personal statement to you), and you have made and documented a good faith effort to give the seller or manufacturer a chance to either fix or replace the goods or refund your money, your chances of winning are excellent–as long as you can prove:

  • the warranty existed in the first place
  • the defect is "substantial" (for example, a nonfunctioning disc drawer in the DVD player would be substantial, but a small chip in the chrome nameplate would not be), and
  • you did not cause the defect by misusing the product.

However, realize that proving the existence of a warranty can be difficult when the promises were made orally and the other party will likely deny they were ever made.

EXAMPLE: Alan purchases a computer and some expensive accounting software from ABC Computer. He thoroughly explains his specialized bookkeeping needs to the salesperson and is assured that the computer and software will do the job. The computer contains a written warranty against defects in parts and labor for 90 days. The warranty statement says that all implied warranties are disclaimed. The software contains no written warranty statement. It is apparent to Alan after a couple of days' work that the software simply is not sophisticated enough to meet the bookkeeping needs he had explained to the salesperson and that the salesperson didn't know what he was talking about when he said it was "perfect for the job."

Two days later the computer has a major crash. Alan calls ABC and asks for the computer to be fixed or replaced and for his money back on the software. When ABC ignores him, Alan sues in small claims court. Alan should have no problem recovering for the price of the computer–it failed within the written warranty period. But the software raises a tougher problem. Alan is claiming a breach of an express oral warranty (the salesperson's statement that the software would meet his needs), and a breach of the implied warranty of general fitness or merchantability. To succeed on the first claim, he must prove that the salesperson did in fact assure him that the software was right for his needs, which may be difficult. Proving the second claim will be even harder, however, because Alan must somehow prove that the software falls below the reasonable standard for sophisticated small business accounting packages. ABC is likely to counter Alan's claim with evidence that the software is in wide use and is generally considered to be adequate to accomplish most accounting tasks. In short, Alan would be smart to focus on trying to prove that in making his decision to purchase the software, he relied on the salesperson's oral statements that the software would meet his specific bookkeeping needs.

How should he do this? If Alan gave the salesperson a written specification detailing his accounting needs and still has a copy, he should show it to the judge. Even better, if he has a witness who heard the salesperson's overly optimistic promises, he should ask this person to testify in court or at least write a letter stating what happened. Unfortunately, if Alan has no convincing evidence as to the salesman's statements, the small claims hearing is likely to come down to his word against the salesperson's, with the judge left to decide who appears to be telling the truth.

Warranty Law: Where Does It Come From?

The Magnuson-Moss Warranty Federal Trade Commission Improvement Act (15 USC § 2302) is a federal law that applies in every state. In addition, every state has a commercial code, which includes similar laws regulating retail sales and warranty protections for consumers. Some states have enacted separate consumer protection and warranty laws that go beyond the Magnuson-Moss Act and these commercial codes. For example, in California, a warranty or guarantee is still good even if the buyer doesn't fill out and return the manufacturer's form (Cal. Com. Code § 2801), and in Kansas an implied warranty exists even for goods sold "as is," unless the consumer has knowledge of the exact defects in the merchandise (Kan. Stat. Ann. § 50-639). To find out about your state's warranty laws, search your state statutes for "commercial code," "consumer protection," or "warranty," or get in touch with your state consumer protection agency.

by: Ralph Warner

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