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Consumer Warranty Law: 14.5.6 Strict Liability and Negligence

Claims based on the manufacturer’s strict liability or negligence are examined in Chapter 12, supra. The claim is in tort and not based on a warranty, so expiration of the warranty is irrelevant. Nor is privity of contract an issue. Tort limitations periods typically begin running from when the consumer should have discovered the tort.

Consumer Warranty Law: 14.9.4 Trial

A mechanic is a good first witness. A mechanic can set up the basic framework for the technical aspects that the jury needs to understand, particularly the impairment to use or safety. This witness can also testify about what advice a mechanic would offer a consumer concerning keeping a vehicle with the described defect.

Consumer Warranty Law: 14.9.5 Evidence and Proof Issues

The manufacturer’s technical service bulletins (TSBs) can demonstrate the existence of a defect. TSBs should be requested through discovery, but also obtain them through the Center for Auto Safety952 or from the National Highway Traffic Safety Administration (NHTSA) website,953 as a means of checking whether the defendant is producing all of them.

Consumer Warranty Law: 14.9.6 Collecting the Judgment

If a manufacturer fails to pay a judgment, a judgment attachment can be issued against the equipment in any of the manufacturer’s plants in the state. Another approach is to garnish a local dealership, which will probably owe the manufacturer for vehicles and parts, or garnish the entities that finance the vehicles that the dealer sells. Those entities may owe the dealer money for vehicle sales they are financing. In addition, the dealer’s floor plan financer, or the auction where the dealer buys vehicles, may be holding money of the dealer’s in reserve accounts.

Consumer Warranty Law: Introduction and Listing of Provisions

This appendix reprints the Federal Trade Commission’s Used Motor Vehicle Trade Regulation Rule, 16 C.F.R. Part 455. The rule was amended on November 18, 2016, effective January 27, 2017. See 81 Fed. Reg. 81,664-01 (Nov. 18, 2016). The amendments altered the Buyers Guide disclosures. Dealers could use their existing supply of the old Buyers Guide until January 27, 2018.

Consumer Warranty Law: § 455.1 General duties of a used vehicle dealer; definitions.

(a) It is a deceptive act or practice for any used vehicle dealer, when that dealer sells or offers for sale a used vehicle in or affecting commerce as commerce is defined in the Federal Trade Commission Act:

(1) To misrepresent the mechanical condition of a used vehicle;

(2) To misrepresent the terms of any warranty offered in connection with the sale of a used vehicle; and

Consumer Warranty Law: § 455.2 Consumer sales—window form.

(a) General duty. Before you offer a used vehicle for sale to a consumer, you must prepare, fill in as applicable and display on that vehicle the applicable “Buyers Guide” illustrated by Figures 1–2 at the end of this part. Dealers may use remaining stocks of the version of the Buyers Guide in effect prior to the effective date of this Rule for up to one year after that effective date (i.e., until January 27, 2018).

Consumer Warranty Law: § 455.3 Window form.

(a) Form given to buyer. Give the buyer of a used vehicle sold by you the window form displayed under § 455.2 containing all of the disclosures required by the Rule and reflecting the warranty coverage agreed upon. If you prefer, you may give the buyer a copy of the original, so long as that copy accurately reflects all of the disclosures required by the Rule and the warranty coverage agreed upon.

Consumer Warranty Law: § 455.4 Contrary statements.

You may not make any statements, oral or written, or take other actions which alter or contradict the disclosures required by §§ 455.2 and 455.3. You may negotiate over warranty coverage, as provided in § 455.2(b) of this part, as long as the final warranty terms are identified in the contract of sale and summarized on the copy of the window form you give to the buyer.

Consumer Warranty Law: § 455.5 Spanish language sales.

(a) If you conduct a sale in Spanish, the window form required by § 455.2 and the contract disclosures required by § 455.3 must be in that language. You may display on a vehicle both an English language window form and a Spanish language translation of that form. Use the translation and layout for Spanish language sales in Figures 4, 5, and 6.

(b) Use the following language for the “Implied Warranties Only” disclosure when required by § 455.2(b)(1) as illustrated by Figure 5:

Consumer Warranty Law: § 455.6 State exemptions.

(a) If, upon application to the Commission by an appropriate state agency, the Commission determines, that—

(1) There is a state requirement in effect which applies to any transaction to which this rule applies; and

Consumer Warranty Law: 14.7 Warranty Issues in Gray Market Vehicle Sales

The term “gray market” “refers to a fact pattern in which someone other than the designated exclusive United States importer buys genuine trademarked goods outside the U.S. and imports them for sale in the U.S. in competition with the exclusive U.S. importer.”850 Sometimes manufacturers or their distributors, responding to local market conditions, set lower prices when they sell cars to dealers in other countries, creating an incentive for U.S.

Consumer Warranty Law: 14.8.2.1 Lemon Law Coverage

Many motor home manufacturers give written warranties only on certain parts of the vehicle. They pass along the written warranties issued by the manufacturers of other parts. There may be no single entity willing to take responsibility for fixing the vehicle.

Consumer Warranty Law: 14.8.2.2 Application of UCC, Other Laws

Many courts hold that the implied warranty of merchantability arises not just against the immediate seller but also against the remote manufacturer.886 The implied warranty of merchantability should cover the vehicle as a whole, as that is the product that the final manufacturer sold to the consumer through the dealer.887 Motor homes are no different from other products, that a final manufacturer assembles from components manufactured by many other companies.

Consumer Warranty Law: 14.8.2.3 Litigation Issues

Ask early in discovery whether the entity named in the complaint as the final manufacturer actually meets that description. Many motor home manufacturers are subsidiaries of other companies. The parent company may be liable as the manufacturer’s alter ego, but if there is any doubt that the right corporation has been sued, find this fact out early and add the subsidiary to the suit.

Consumer Warranty Law: 14.8.5 Trial Issues

When trying a motor home case, prepare the jury for any terms used in the motor home industry that are not common knowledge. Prepare evidence that shows that the impairment is substantial. Many owners experience some problems with their motor homes. A jury that has some familiarity with motor home problems will want to know why the problems with the plaintiff’s home were so substantial as to justify the relief sought.

Consumer Warranty Law: 14.9.1.1 NHTSA Data

The federal National Highway Traffic Safety Administration (NHTSA) receives, investigates, and researches consumer complaints about motor vehicle defects, and can order manufacturer recalls.924 It is required by statute925 to make technical service bulletins (TSBs) available to the public in searchable form on its website.926 The same website allows sea

Consumer Warranty Law: § 455.7 Severability.

The provisions of this part are separate and severable from one another. If any provision is determined to be invalid, it is the Commission’s intention that the remaining provisions shall continue in effect.