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Consumer Warranty Law: 18.4.6 Time Limits

A major disadvantage of home warranty statutes is that they typically limit the warranty’s duration, generally to only one year as to defects in general, but often with a more extended warranty for structural defects:

Consumer Warranty Law: 18.4.7 Notice and an Opportunity to Cure

New home warranty statutes may require that the owner give notice to the builder of any defect covered by a warranty, and a reasonable opportunity to cure the defect.233 In addition, states may have stand-alone statutes imposing such a requirement for any type of warranty claim involving a home.234

Consumer Warranty Law: 18.4.9 Relation to Common Law Remedies

The Connecticut, Indiana, Maine, Mississippi, New Hampshire, and Virginia statutory warranty laws expressly provide that their remedies are in addition to other rights and remedies.239 In California, one court has concluded that the statutory warranty does not preclude an action for breach of an implied warranty.240

Consumer Warranty Law: 18.5.1 The Uniform Common Interest Ownership Act

The Uniform Common Interest Ownership Act addresses both express warranties and implied warranties relating to condominium sales.247 The Act provides that a seller makes an express warranty by an affirmation of fact or promise relating to the unit, showing a model or description of the physical characteristics of the unit, including plans and specifications, or by describing the quantity or extent of the property.248 The seller need not have any specific intention to make a warranty in order to

Consumer Warranty Law: 9.7.1 Federal Law Requires Any Remedy Limitation to Be Conspicuous If “Written Warranty” Provided

The Magnuson-Moss Warranty Act leaves sellers free to limit warranty remedies for consumer products, but a seller who gives a “written warranty” as defined by the statute must make clear and conspicuous disclosure, in simple and readily understood language, of any limitations on warranty remedies.116 The disclosures must be part of a single document that includes other required information about the warranty.117

Consumer Warranty Law: 9.7.3 Effect of State Plain Language Statute

Several states, including Connecticut, Hawaii, Maine, Minnesota, Montana, New Jersey, New York, Oregon, Pennsylvania, and West Virginia, have adopted plain language statutes that are generally applicable to a wide variety of consumer transactions. Other states have plain language requirements as part of other statutes, such as rent-to-own statutes, deceptive practices (UDAP) statutes, insurance codes, consumer credit statutes, and hearing aid sales statutes.127

Consumer Warranty Law: 9.8 Seller’s Post-Sale Conduct May Waive the Contractual Limitation

The seller’s post-sale conduct can operate as a waiver of the remedy limitation or can be a course of performance that demonstrates that the limited remedy was not intended by the parties to be exclusive.128 A common example is a contractual requirement that the buyer deliver the goods to the seller or manufacturer for warranty work. A warrantor who does not hold the buyer to this requirement cannot invoke it at a later date.129

Consumer Warranty Law: 9.10 Seller’s Bad Faith

The seller’s bad faith may also bar the seller from enforcing a limitation of remedies.144 The UCC imposes a non-waivable145 obligation of good faith upon all transactions it covers.146 “Good faith” is defined as honesty in fact and the observance of reasonable commercial standards of fair dealing.147

Consumer Warranty Law: 9.11 Remedy Limitations That Make Warranty Unfair or Deceptive

A limitation of remedies clause can be challenged as a deceptive or unfair trade practice. For example, a remedy limitation that so restricts the warranty as to render it nearly illusory may violate the state’s unfair and deceptive acts and practices (UDAP) statute.152 If promotional material for a burglar alarm stresses how it safeguards the buyer’s valuables and is guaranteed, a limitation of the warranty to repair or replacement may be deceptive.

Consumer Warranty Law: 18.6.1 General

Just as with goods,281 a builder or seller of a house can make an express warranty as to the quality or other aspects of the house, the breach of which leads to a claim if it was part of the basis of the bargain.282 The warranty may be written or oral, and whether a particular statement constitutes a warranty is usually a question of fact.283 Quite often the purchase and sale agreement,284 or the cons

Consumer Warranty Law: 18.6.2.1 Houses Purchased with Federally Insured Loans

Federal law requires that homes built pursuant to a loan guaranteed by the Veterans Administration296 or financed by the Federal Housing Administration pursuant to the National Housing Act297 be accompanied by “a warranty that the dwelling is constructed in substantial conformity with the plans and specifications.” One court has held that this statute does not create a private federal cause of action.298 Nonetheless, if the contract contains the re

Consumer Warranty Law: 18.6.3.1 The Merger Doctrine

Builders argue that the merger doctrine (not to be confused with a merger clause) extinguishes a sales contract’s express warranties. That doctrine states that agreements made prior to a conveyance are merged into—meaning extinguished—by the deed unless specifically repeated in it.

Consumer Warranty Law: 18.6.3.3 Notice Requirements and Other Warranty Restrictions

An express warranty is contractual, and conditions placed on the warranty, such as a requirement that the buyer notify the seller of a warranty breach within a specific period of time or allow the seller an opportunity to repair, may be enforced if not unconscionable.315 The requirement of notice and an opportunity to cure also exists in some states because of a stand-alone statute applicable to any type of home warranty claim.316 However, when a plaintiff has a reasonable excuse for failing to

Consumer Warranty Law: 18.6.3.4 Puffing

“Puffing”—that is, sales statements expressing an opinion and not intended to guarantee a particular quality—will not create an express warranty.

Consumer Warranty Law: 18.7.1.1 UDAP Claims

New home defects usually give rise to a variety of claims in addition to breach of warranty claims. State unfair and deceptive acts and practices (UDAP) statutes usually apply to home sales unless a particular state UDAP statute does not apply to real estate transactions.323 Some UDAP statutes also exclude non-merchant sellers,324 and therefore would not cover individuals selling their own homes.

Consumer Warranty Law: 18.7.1.2 Tort Claims

A builder may be liable in tort under a strict liability theory,328 so that no negligence need be shown, and recovery can be had despite lack of privity or the existence of disclaimers of liability.329 The consumer only has to show that the house is unreasonably dangerous.330