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Consumer Warranty Law: SOUTH DAKOTA

S.D. Codified Laws §§ 58-1-3, 58-30-144

Motor vehicle service contracts offered by the manufacturer or dealer are exempt from application of the insurance code (§ 58-1-3(3)). License as insurance producer is not required of any party engaged in the sale of or issuance of vehicle service contracts (§ 58-30-144(9)).

Consumer Warranty Law: TENNESSEE

Tenn. Code Ann. §§ 56-2-126, 47-18-1401 to 47-18-1404

Service contracts are exempt from insurance regulation (§ 56-2-126). The term of a service contract other than a motor vehicle service contract is extended by the number of days the consumer is deprived of the product while it is being repaired, plus two (§§ 47-18-1401 to 47-18-1404).

Consumer Warranty Law: VERMONT

Vt. Stat. Ann. tit. 8, §§ 3301, 4247 to 4256

Automobile guarantees are insurance (§ 3301(a)(3)(B)). Forms must be approved by the commissioner. There is no requirement that rates be filed or approved. Contractor must purchase a bond or display other evidence of financial security (§ 4249). Disclosures to the consumer are required (§ 4251); certain practices and contract terms are prohibited (§§ 4253, 4254); and a violation constitutes an unfair or deceptive practice enforceable under the state’s deceptive practices statute (§ 4255(b)).

Consumer Warranty Law: WISCONSIN

Wis. Stat. §§ 616.50 to 616.62

Statute applies to service contracts for property primarily for personal, family, or household use, it does not apply to warranties or maintenance agreements; also certain provisions do not apply to vehicle service contracts (§§ 616.50, 616.52). For all contracts, forms must be approved by insurance commissioner (§ 616.56). For all contracts, sale or loan may not be conditioned on purchase of contract; deceptive or misleading terms or statements are also prohibited (§ 616.58).

Consumer Warranty Law: 11.1.1.1 Introduction

Every state has enacted a “UDAP” statute, a statute of general applicability prohibiting deceptive trade practices, and, in most instances, unfair or unconscionable practices. UDAP is an acronym for “unfair and deceptive acts and practices” and is used here to apply to any general statute proscribing abusive practices against consumers, even if the statute only prohibits deception.

Consumer Warranty Law: 11.1.1.2 Advantages of a UDAP Claim

The advantages of a UDAP claim in a warranty action are quite dramatic. Virtually any Uniform Commercial Code (UCC) warranty problem can be viewed as involving deception, the failure to disclose material facts, or unfairness.2 Moreover, sales and leases of consumer goods are almost always within the scope of a UDAP statute. (In a few states, the UDAP statute does not apply to the sale of service contracts regulated as insurance, manufactured homes when treated as realty, or certain practices occurring after the sales transaction.

Consumer Warranty Law: 11.1.1.3 Advantages of a UCC Claim

Despite a UDAP claim’s superior remedies and minimal technical requirements, it is still important in many cases to allege both UDAP and warranty claims. Because Magnuson-Moss Act claims can provide attorney fees for breach of a written or implied warranty in the sale of goods, this nullifies one of the main advantages of a UDAP claim. In fact, a number of states’ UDAP statutes do not provide attorney fees, and thus a Magnuson-Moss Act claim provides superior remedies to the UDAP claim in those states.

Consumer Warranty Law: Introduction

This appendix analyzes state laws and regulations dealing with service contracts, extended warranties, and mechanical breakdown insurance. It covers laws of general applicability and those applying to motor vehicles and electronic products, but does not cover service contract laws applying to homes or condominiums. This appendix also does not cover the many state statutes regulating service contracts for portable electronic devices. Practitioners should use this appendix for easy reference to their own state’s statute, and to compare their statute with other states’ laws.