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Consumer Warranty Law: NEW JERSEY

New Home Warranties: N.J. Stat. Ann. §§ 46:3B-1 to 46:3B-9 (West)

Structures Covered: Any dwelling unit not previously occupied, excluding dwelling units constructed solely for lease.

Eligible Buyers: Any person for whom the new home is built or to whom the home is sold for occupation by buyer or buyer’s family as a home.

Warrantors: Any person or entity in the business of constructing new homes.

Express Warranty Provisions: No applicable provisions.

Consumer Warranty Law: NEW YORK

New Home Warranties: New York Gen. Bus. Law §§ 777 to 777-b (McKinney)

Structures Covered: Any single family house or for-sale unit in a multi-unit condominium or cooperative structure.

Eligible Buyers: The first person to whom home is sold and each subsequent owner during the warranty period.

Warrantors: Any person or entity contracting with an owner for the construction or sale of a new home.

Express Warranty Provisions: No applicable provisions.

Consumer Warranty Law: NORTH CAROLINA

Condominium Warranties: N.C. Gen. Stat. §§ 47C-4-113 to 47C-4-117

Structures Covered: Condominium unit and premises.

Eligible Buyers: No applicable provisions.

Warrantors: Declarant or person in the business of selling real estate for his own account.

Express Warranty Provisions: The existence of express warranties does not disclaim implied warranties; law relating to express warranties applies to the sale of a condominium unit.

Consumer Warranty Law: OHIO

New Home Warranties: Ohio Rev. Code Ann. §§ 4722.01 to 4722.08 (West)

Structures Covered: Residential buildings, but not structures containing four or more dwelling units except for work on an individual dwelling unit within that structure or construction performed on a condominium’s common areas.

Eligible Buyers: Any person who contracts with a home construction service supplier, including a tenant occupying the dwelling or a person acting on the owner’s behalf.

Consumer Warranty Law: 8.3.2.2 Is the Test Objective or Subjective?

For some courts, the test of substantial impairment is akin to material breach under traditional contract law,209 at least absent a buyer’s special circumstances.210 This view requires a showing that the nonconformity is objectively substantial, that is, substantially interferes with or alters the objective nature of the goods.

Consumer Warranty Law: 8.3.2.5 Failure to Repair As a Substantial Nonconformity

Courts have held that the seller’s failure to repair a major defect or several minor ones under a repair or replace warranty may itself be a sufficient nonconformity to give rise to the right to revoke acceptance.235 Other courts reach the same result through a different analysis, treating the repair or replace clause as a limitation on remedies that fails of its essential purpose if the seller is unable to correct the problem within a reasonable time.236

Consumer Warranty Law: 8.3.3.2 Acceptance Based on Reasonable Assumption of Repair

A buyer who accepts with knowledge of a nonconformity may revoke acceptance if the acceptance was based upon the reasonable assumption of repair by the seller, but the seller fails to repair the goods.248 This revocation is distinguished from the extension of time to reject that is afforded a buyer who has not accepted the goods when the seller gives assurances of repair.249

Consumer Warranty Law: 8.3.3.3 Buyer Unaware of Nonconformity at Time of Acceptance

A buyer who was reasonably unaware of the nonconformity at acceptance can also revoke acceptance.254 The buyer’s lack of awareness of the nonconformity can be due to either the difficulty of discovery or the seller’s assurances that the goods are conforming.255 The difficulty of discovery will depend on the nature of the defect, the complexity of the goods, the use of the goods, and the sophistication of the buyer.256 In most consumer cases, this s

Consumer Warranty Law: 8.3.4 Reasonable Time for Revocation

Section 2-608(2) provides in part: “Revocation of acceptance must occur within a reasonable time after the buyer discovers or should have discovered the ground for it.” Section 1-205(a) explains: “What is a reasonable time for taking any action depends on the nature, purpose and circumstances of such action.”260 This issue is a question of fact for the jury,261 unless reasonable minds cannot differ, in which case it becomes an issue of law for the court to decide.

Consumer Warranty Law: 8.3.6.1 Form of Notice

Revocation of acceptance is not effective until the buyer notifies the seller of it.294 No particular form of notice of revocation is necessary.295 Written or oral notice should suffice.296 Notice by telegram or email297 or on a bill is also proper.298

Consumer Warranty Law: 8.3.6.2 Content of Notice

Buyers who wish to revoke acceptance must give the seller fair notice that they do not want to keep the goods.306 They need not, however, use the words “revocation of acceptance.”307 A buyer’s notice, after her car was repaired, redelivered, and again broke down, that she elected “to stand upon the notice of rescission” was effective,308 as was a letter saying that the buyer rescinded.309 Buyers who s

Consumer Warranty Law: 8.3.6.3 Sending the Notice to Third Parties

The consumer should take care to give notice of revocation directly to every party against whom revocation is sought.318 Notice given to a third party who has some connection to the seller and then communicates the revocation to the seller may be sufficient,319 but there are likely to be proof problems.

Consumer Warranty Law: 8.3.7.1 No Right to Cure Under the UCC

The Code limits a buyer’s right to reject goods by giving the seller a statutory right to cure under section 2-508. That section provides that if the goods are nonconforming, the seller in certain circumstances may cure the buyer’s rejection by making a conforming tender at no cost to the buyer.323

Consumer Warranty Law: 8.3.7.4 Strategic Issues

Should the buyer allow the seller to cure after acceptance, if the seller has no right to cure? Certainly, the buyer who wants to keep the goods will rarely lose anything by free seller repair attempts. Even the buyer who does not want the goods will do well by showing good faith in allowing cure, at least when the cure is by replacement of the goods and the buyer need not worry about the efficacy of repair. Refusing replacement goods may raise a suspicion of a bad faith attempt to avoid the transaction.

Consumer Warranty Law: 8.3.8.1 Introduction

Revocation against the manufacturer or other indirect seller is important in cases in which the direct seller has disclaimed warranties but the indirect seller has not. In this situation, many courts have ruled that revocation is available against the direct seller notwithstanding the disclaimer,338 but this view is not universal.

Consumer Warranty Law: 8.3.8.2 Precedent Allowing Revocation Against the Indirect Seller

Cases that have found revocation of acceptance available against a remote manufacturer have done so for different reasons. In Durfee v. Rod Baxter Imports, Inc.,352 the Minnesota Supreme Court was evidently concerned that, because the dealer appeared to be out of business, the buyer would be left with no remedy if revocation of acceptance were not permitted. It allowed the consumer to revoke acceptance against the remote distributor of an automobile by invoking the Code provision allowing for the liberal granting of remedies.