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Consumer Warranty Law: 19.9.8.1.4 The opposing parties

Keep tabs on the opposing parties. If one is a corporation or other entity, check periodically with the appropriate agencies as to its status and addresses, and so forth. If an entity is not a corporation, it may be doing business under an assumed name. If so, it may be required to register with a governmental agency. Is the contractor required to be licensed? Is it licensed? If not, the contractor may not be able to enforce its contracts. Is the entity required to be bonded or to set up an escrow account, and has it done so?

Consumer Warranty Law: 19.9.8.2 Pleading Tips

Home improvement litigation often begins with the lender suing the homeowner in a mortgage foreclosure action. In such cases, if court rules allow, the homeowner should bring the contractor and its principals in as third party defendants, even though they may not be the deep pockets. This allows a broader exploration of the consumer’s defenses and claims without limitations based on the lender’s liability and can be used as a vehicle for presenting the entire story to the jury, which will probably be aligned in sympathy with the consumer.

Consumer Warranty Law: 19.9.8.3 Dealing with Mortgages and Liens on the Consumer’s Home

Most home improvement contracts are secured by a mortgage on the home, either in the name of the contractor or in the name of a financer. In addition, statutory liens such as mechanic’s liens can arise. Subcontractors who have no direct contractual relationship with the buyer may have a lien if the contractor has not paid them. The enforceability of home mortgages and statutory liens is a complex area covered in NCLC’s Home Foreclosures.242 This subsection examines several practice tips.

Consumer Warranty Law: 19.9.8.4 Discovery

Discovery will be necessary to obtain facts regarding the nature of the transaction, the parties and their relationships. The pleadings should be phrased broadly enough to encompass all possible characterizations of the transaction so as to avoid any relevancy or “fishing” objections in discovery.

Consumer Warranty Law: 19.10.1.1 Consumer’s Remedy When Repair Shop Has No Right to Retain the Car

A repair shop’s right to keep the car until it receives payment in full is based on a statutory or common law lien allowing a merchant to retain a good based on improvements made to that good.245 A repair shop will be liable for the tort of conversion if it retains a car when it does not have a valid lien,246 or sells the car pursuant to a valid lien when the sale does not follow proper procedures.247 Generally, conversion requires intentional cond

Consumer Warranty Law: Section 2-601. Buyer’s Rights on Improper Delivery.

Subject to the provisions of this Article on breach in installment contracts (Section 2-612) and unless otherwise agreed under the sections on contractual limitations of remedy (Sections 2-718 and 2-719), if the goods or the tender of delivery fail in any respect to conform to the contract, the buyer may

(a) reject the whole; or

(b) accept the whole; or

(c) accept any commercial unit or units and reject the rest.

Consumer Warranty Law: Section 2-602. Manner and Effect of Rightful Rejection.

(1) Rejection of goods must be within a reasonable time after their delivery or tender. It is ineffective unless the buyer seasonably notifies the seller.

(2) Subject to the provisions of the two following sections on rejected goods (Sections 2-603 and 2-604),

(a) after rejection any exercise of ownership by the buyer with respect to any commercial unit is wrongful as against the seller; and

Consumer Warranty Law: Section 2-604. Buyer’s Options as to Salvage of Rightfully Rejected Goods.

Subject to the provisions of the immediately preceding section on perishables if the seller gives no instructions within a reasonable time after notification of rejection the buyer may store the rejected goods for the seller’s account or reship them to him or resell them for the seller’s account with reimbursement as provided in the preceding section. Such action is not acceptance or conversion.

Official Comment

Purposes:

Consumer Warranty Law: Section 2-605. Waiver of Buyer’s Objections by Failure to Particularize.

(1) The buyer’s failure to state in connection with rejection a particular defect which is ascertainable by reasonable inspection precludes him from relying on the unstated defect to justify rejection or to establish breach

(a) where the seller could have cured it if stated seasonably; or

(b) between merchants when the seller has after rejection made a request in writing for a full and final written statement of all defects on which the buyer proposes to rely.

Consumer Warranty Law: Section 2-606. What Constitutes Acceptance of Goods.

(1) Acceptance of goods occurs when the buyer

(a) after a reasonable opportunity to inspect the goods signifies to the seller that the goods are conforming or that he will take or retain them in spite of their non-conformity; or

(b) fails to make an effective rejection (subsection (1) of Section 2-602), but such acceptance does not occur until the buyer has had a reasonable opportunity to inspect them; or

Consumer Warranty Law: Section 2-607. Effect of Acceptance; Notice of Breach; Burden of Establishing Breach After Acceptance; Notice of Claim or Litigation to Person Answerable Over.

(1) The buyer must pay at the contract rate for any goods accepted.

(2) Acceptance of goods by the buyer precludes rejection of the goods accepted and if made with knowledge of a non-conformity cannot be revoked because of it unless the acceptance was on the reasonable assumption that the non-conformity would be seasonably cured but acceptance does not of itself impair any other remedy provided by this Article for non-conformity.

(3) Where a tender has been accepted

Consumer Warranty Law: Section 2-608. Revocation of Acceptance in Whole or in Part.

(1) The buyer may revoke his acceptance of a lot or commercial unit whose non-conformity substantially impairs its value to him if he has accepted it

(a) on the reasonable assumption that its non-conformity would be cured and it has not been seasonably cured; or

(b) without discovery of such non-conformity if his acceptance was reasonably induced either by the difficulty of discovery before acceptance or by the seller’s assurances.

Consumer Warranty Law: Section 2-706. Seller’s Resale Including Contract for Resale.

(1) Under the conditions stated in Section 2-703 on seller’s remedies, the seller may resell the goods concerned or the undelivered balance thereof. Where the resale is made in good faith and in a commercially reasonable manner the seller may recover the difference between the resale price and the contract price together with any incidental damages allowed under the provisions of this Article (Section 2-710), but less expenses saved in consequence of the buyer’s breach.

Consumer Warranty Law: Section 2-711. Buyer’s Remedies in General; Buyer’s Security Interest in Rejected Goods.

(1) Where the seller fails to make delivery or repudiates or the buyer rightfully rejects or justifiably revokes acceptance then with respect to any goods involved, and with respect to the whole if the breach goes to the whole contract (Section 2-612), the buyer may cancel and whether or not he has done so may in addition to recovering so much of the price as has been paid

(a) “cover” and have damages under the next section as to all the goods affected whether or not they have been identified to the contract; or

Consumer Warranty Law: Section 2-712. “Cover”; Buyer’s Procurement of Substitute Goods.

(1) After a breach within the preceding section the buyer may “cover” by making in good faith and without unreasonable delay any reasonable purchase of or contract to purchase goods in substitution for those due from the seller.

(2) The buyer may recover from the seller as damages the difference between the cost of cover and the contract price together with any incidental or consequential damages as hereinafter defined (Section 2-715), but less expenses saved in consequence of the seller’s breach.

Consumer Warranty Law: Section 2-713. Buyer’s Damages for Non-delivery or Repudiation.

(1) Subject to the provisions of this Article with respect to proof of market price (Section 2-723), the measure of damages for non-delivery or repudiation by the seller is the difference between the market price at the time when the buyer learned of the breach and the contract price together with any incidental and consequential damages provided in this Article (Section 2-715), but less expenses saved in consequence of the seller’s breach.

Consumer Warranty Law: Section 2-715. Buyer’s Incidental and Consequential Damages.

(1) Incidental damages resulting from the seller’s breach include expenses reasonably incurred in inspection, receipt, transportation and care and custody of goods rightfully rejected, any commercially reasonable charges, expenses or commissions in connection with effecting cover and any other reasonable expense incident to the delay or other breach.

(2) Consequential damages resulting from the seller’s breach include

Consumer Warranty Law: Section 2-719. Contractual Modification or Limitation of Remedy.

(1) Subject to the provisions of subsections (2) and (3) of this section and of the preceding section on liquidation and limitation of damages,

(a) the agreement may provide for remedies in addition to or in substitution for those provided in this Article and may limit or alter the measure of damages recoverable under this Article, as by limiting the buyer’s remedies to return of the goods and repayment of the price or to repair and replacement of non-conforming goods or parts; and

Consumer Warranty Law: Section 2-721. Remedies for Fraud.

Remedies for material misrepresentation or fraud include all remedies available under this Article for non-fraudulent breach. Neither rescission or a claim for rescission of the contract for sale nor rejection or return of the goods shall bar or be deemed inconsistent with a claim for damages or other remedy.

Official Comment

Consumer Warranty Law: Section 2-723. Proof of Market Price: Time and Place.

(1) If an action based on anticipatory repudiation comes to trial before the time for performance with respect to some or all of the goods, any damages based on market price (Section 2-708 or Section 2-713) shall be determined according to the price of such goods prevailing at the time when the aggrieved party learned of the repudiation.

Consumer Warranty Law: 19.10.3.2.2 Required disclosures

About half the states have adopted specific provisions regulating the daily operation of repair facilities. Although the specific requirements vary from state to state, common provisions include requirements that the facilities: