The Warranty Game: Enforcing Your Product Warranty J. M. Edgar, J.D., C.M.C.
Your new coffee maker quits working three days after you brought it home, your year-old faucet leaks and your new double-glazed, argon filled, low-E coated, insulated vinyl window fogs up inside the glass every time it rains.
You have a warranty claim. You call the manufacturer's customer service line only to be told that "it's not covered."
So you fume, maybe write a complaint on one of those consumer complaint websites and buy a new coffee maker, faucet, and window.
You're a wimp, a wuss, a panty-waist. You gave up too easily. Sorry to be so rude, namby-pamby, but there it is, you sissy.
As the managing partner in StarCraft Custom Buiders, I deal with manufacturer warranties all the time.
StarCraft buys a lot of stuff, and some of it is going to have a problem. Well over 99% of warranty claims are handled by manufacturers or sellers quickly and satisfactorily, but some are not. If they are not, then that's when the going gets tougher, but the tougher get stubborn.
This article is for the guys and gals who refuse to take "no" for an answer.
It will show you how to win the warranty game nearly every time. What it takes is perseverance – something that manufacturers are pretty confident you don't have. In fact, they're counting on it – all the way to the bank.
But if you do, then you will most likely win. It's really as simple as that.
First, we'll dissect warranties to find out what they're all about, then I'll tell you how to use them to your advantage to make an effective warranty claim, and, if you don't get satisfaction using the claims process, how to sue in court and win.
The "sue in court" bit sounds pretty scary, but it's not and it is a valuable tool in winning the warranty game.
The Manufacturer's Express Warranty
An "express" warranty is the seller's written guarantee that a product will perform properly for a specified period of time, and a statement of what the seller will do to fix the problem if the product fails during that time period.
When we talk of something "having a warranty", this is the type of warranty we are talking about. It is considered to be a part of the contract you entered into with the manufacturer when you bought the product.
You paid money and in exchange, the company sold you the product and gave you a written promise to take care of some or all of the defects in the product for a certain length of time.
This warranty promise is completely voluntary. No law or rule requires a manufacturer to guarantee its products. It can just take your money and deliver the product without making any promise to take care of defects. But, if a manufacturer does not make some sort of guarantee, would you buy the product?
A warranty is necessary to compete in the marketplace. In fact, increasingly warranties are marketing and sales tools. Manufacturers of products with generous, or at least what appear to be generous, warranties, advertise the fact.
|Moen® products have been manufactured under the highest standards of quality and workmanship…||This is promotional fluff and can be disregarded. You'll find a lot of sales hype in a warranty which is for many companies actually a sales pitch disguised as a warranty. The Federal Trade Commission discourages this practice but does not penalize for it.|
|Moen warrants to the original consumer purchaser for as long as the original consumer purchaser owns their (sic) home…, that this faucet will be leak- and drip-free during normal use and all parts and finishes of this faucet will be free from defects in material and manufacturing workmanship…||This warranty expires when the original purchaser dies or sells his house, so it is not really a "lifetime" warranty since the original purchaser is likely to sell long before he or she dies.|
|If this faucet should ever develop a leak or drip during the Warranty Period, Moen will FREE OF CHARGE provide the parts necessary to put the faucet back in good working condition and will replace FREE OF CHARGE any part or finish that proves defective in material and manufacturing workmanship, under normal installation, use, and service.||This is the section that tells you what Moen will do under the warranty to put your faucet back in working order. All it will do is provide "FREE OF CHARGE" any parts required to repair the faucet. That's it. That's all you get out of Moen. You have to pay to have the parts installed.|
|This warranty is extensive in that it covers replacement of all defective parts and finishes.||This warranty is not at all "extensive". It is about average for the industry. This section is just more marketing fluff.|
|…However, damage due to installation error, product abuse, product misuse, or use of cleaners containing abrasives, alcohol or other organic solvents, whether performed by a contractor, service company, or yourself, are excluded from this warranty. Moen will not be responsible for labor charges and/or damage incurred in installation, repair or replacement, nor for any indirect, incidental or consequential damages, losses, injury or costs of any nature relating to this faucet.||
This is the section where Moen tells you what it will not do.
• Moen will NOT PAY for the labor cost of having a plumber remove, repair and replace the faucet. This is, of course, the expensive part of repairing a faucet.
• Nor will Moen pay for any "consequential" damages or injuries relating to the faucet.A consequential damage is damage caused by a defect in the faucet to something other than the faucet itself. For example, your faucet leaks, flooding your kitchen. The damage to your kitchen is a "consequential" damage that Moen says it will NOT PAY FOR.
|Except as provided by law, this warranty is in lieu of and excludes all other warranties, conditions, and guarantees, whether expressed or implied, statutory or otherwise, including without restriction those of merchantability or of fitness for use.||This is Moen's disclaimer of any implied warranty of fitness or merchantability. It is very cleverly written. Moen knows that this sort of blanket disclaimer of state-law implied warranties is not allowed in a consumer warranty. It looks imposing, but it is merely a bluff. The expression "Except as provided by law ..." is its cover in case anyone brings a lawsuit for a deceptive business practice. It is, however, intended to deceive consumers into believeing that they do not have the protection of state law warranties.|
|Some states, provinces, and nations do not allow the exclusion or limitation of incidental or consequential damages, so the above limitations or exclusions may not apply to you. This warranty gives you specific legal rights and you may also have other rights which vary from state to state, province to province, nation to nation.||This is the section, required by federal law, where Moen admits without actually admitting that its attempted disclaimer of implied warranties and limitations on incidental or consequential damages probably won't work.|
|Replacement parts may be obtained by calling 1-800-289-6636 (Canada 1-800-465-6130), or by writing to the address shown below. Proof of purchase (original sales receipt) from the original consumer purchaser must accompany all warranty claims. …
…Moen will advise you of the procedure to follow in making warranty claims. Simply write to Moen Incorporated using the address above. Explain the defect and include proof of purchase and your name, address, area code, and telephone number.
|This is how you make a warranty claim.
In actual practice, Moen almost never asks for a proof of purchase figuring that you will probably not be asking for parts for a faucet that you don't actually own.
|Defects or damage caused by the use of other than genuine Moen parts is not covered by this warranty.||This bit is just to scare you into using Moen parts. It sort of sounds like if you don't you may void your Moen warranty, but such "tie-in clauses" are illegal under federal law, and can be disregarded.|
Ford offers a 36,000 mile, 3-year powertrain warranty on its small trucks, Dodge offers 100,000 miles or 5 years.
For the first time in our company's history, we did not buy Ford trucks. If Ford thinks its powertrains will last just 36,000 miles, we'll take Ford's word for it and look elsewhere.
Marketing through warranty competition works, and encouraging this competition was one of the major goals of the federal Magnuson-Moss Warranty Act (see more below).
Warranty Games & Barnum Promises
Not that games aren't played with warranties. They are. Many product warranties are written to look like the company is promising a lot, while actually very little is promised.
Alside windows, for example, trumpets its lifetime "peace of mind" window warranty, but on careful examination, the company promises only what the majority of window manufacturers promise – if your window is defective, it will send you some replacement parts. It's up to you to pay to get them installed.
This is hardly what we could reasonably call a "peace of mind" warranty.
Most "lifetime" warranties are not really for your lifetime. If you sell the house in which a faucet is installed, most "lifetime" faucet warranties end, despite the fact that you may live on for quite a few more years – albeit warranty-less.
Many warranty promises are completely empty. For example, nearly every vinyl window manufacturer warrants its product against peeling or delaminating – something vinyl cannot possibly do, but only a very few warrant their windows against warping or twisting, which vinyl windows do all the time.
I call these "Barnum promises", in honor of the famous showman, huckster, and philanthropist, Phineas Taylor (P. T.) Barnum, who reputedly sold a whole rail car-load of white salmon by promising that it absolutely "would not turn pink in the can", something white salmon cannot possibly do.
A warranty against a defect that can't possibly happen looks good but is really just puff and fluff – a totally hollow guarantee, a Barnum promise.
Warranties can be slippery things and understanding a warranty can be a challenge, even for attorneys.
Generous promises given in bold print at the top of the page are often taken away in the fine print at the bottom.
The warranty offered by the English internet retailer that sells heating appliances in the U.S. is a case on point. It guarantees its products for ten years "against manufacturing defects" but excludes "serviceable parts" from coverage, which it interprets to mean just about every part of the fixtures except the finishes. it is barely a warranty at all.
Northern Central Distributing at one time guaranteed its Yosemite sink faucets with a "lifetime warranty for ten years."
When I first read it, I thought it was a misprint. Nope. That's the warranty. Of course, maybe the lifetime of Yosemite faucets is just ten years. (NCD eliminated that term from its warranty once we made fun of it in our review of Yosemite faucets.
Clauses in a warranty are often deliberately jumbled so it is hard to ferret out exactly what is being promised. Usually, after carefully parsing a warranty for substantial content rather than marketing puffery, I find that much of the time a product warranty actually promises very little.
Many fixture warranties promise you parts but you have to pay to have them installed, and sometimes to have them delivered. Most plumbing fixtures have this type of warranty, as do decks and most other products that are built in.
Small appliance warranties, by contrast, often cover repair labor at least for a year or two, but also require you to send the product to an authorized service center for evaluation at your expense before it will be repaired. Warranties on large appliance typically require you to pay for a technician to evaluate the appliance before the company will even consider your claim.
There are, however, real warranties available that offer real relief if a product or service fails.
Milgard's Full Lifetime Warranty on its Tuscany® windows is the only full warranty I know of for a building product. (Download and read this warranty here.) Milgard promises that if its window is defective, it will fix it or buy you a new window and install it in your house free of charge. It will pay for all transportation and delivery and it will even remove your old window to the landfill. If it gets any better than this, I have not seen it, so Milgard is our preferred vinyl window. If the company is this confident in its windows, then so are we, and more than happy to offer such a well-supported window to our customers.
The Magnuson-Moss Act
But, as obtuse and often incomprehensible as most product warranties are today, in former years they were even worse. It finally got so bad that our usually laggard Congress finally stepped in to put a stop to some of the more flagrant abuses. (Some of you old timers may remember those heady days of yore when Congress actually did something.)
The federal Magnuson-Moss Warranty Act (15 U.S.C. §2301) enacted in 1975, defines the types of written or "express" warranties that may be offered by manufacturers and sellers of consumer goods. It requires that any written warranty be conspicuously identified as a full "warranty" or a "limited warranty".
A full warranty ("unlimited warranty" or just a "warranty") must meet every single one of the following five requirements:
A limited warranty is one that does not meet any one or more of these requirements and is entitled some variation of "Limited Warranty." If the word "limited" is not in the title (or caption), then it is automatically converted to a full warranty
Almost all warranties are limited warranties because rare is the manufacturer who is brave enough to offer a full warranty.
The Moen warranty shown on this page is a good example of a typical limited product warranty. It limits the warranty to the initial purchaser only. It promises only to replace or repair any defective parts but specifically excludes any labor costs and consequential damages. None of these limitations is allowed in a full warranty.
The Length of Warranty Coverage
Neither the Magnuson-Moss Act nor any state law requires that a warranty be for any specific length of time. A seller is free to offer a warranty for any length of time it thinks is appropriate. But, the length of the warranty period must be "clearly disclosed" in simple, "easy to understand" language.
"Easy to understand" however, has been very liberally interpreted by the courts. It increasingly means "easy to understand" by the average lawyer. For most of the rest of us, warranty language is not all that "easy to understand".
The language must not, however, be outright deceptive. If the company advertises a "lifetime" warranty, at least something in the warranty must be guaranteed for someone's or something's lifetime, even if everything else is guaranteed for just 10 days.
A manufacturer can also guarantee against certain defects for one length of time and others for a different period of time. "Lifetime" faucet warranties frequently include only a very short warranty term for "exotic" faucet finishes like oil-rubbed bronze. The fact is that most of these finishes have not been around long enough for anyone to know how long they will actually last, so the companies are taking no chances.
Warranties "Implied" by Law
In addition to any express warranty issued by the manufacturer, every consumer product is sold with a warranty of "merchantability" and a warranty of "fitness for a particular purpose". Note 1 These warranties are "implied" by law and automatically attach to every sale. The terms "merchantable" and "fit for purpose" are legal terms, and sound formidable but they are not that complicated.
What is Meant by "Merchantable"?
Before the industrial age, the principle of caveat emptor or "buyer beware" governed sales of consumer goods.
Buyers were expected to inspect the goods to be purchased and assure themselves that they were of good enough quality to be "salable among merchants who dealt in such goods" or, in other words, "merchantable."
This worked very well when sellers and buyers met face-to-face to conduct a sale. But ith the advent in the 19th century of mass production and trans-continental sales of goods shipped by railroad, personal examination became increasingly impossible. In response, the courts began implying a seller's warranty that the goods received would
• Conform to the seller's description and
• Be fit for the uses to which such goods were ordinarily put.
• at the time of sale.
If they did not conform the the seller's description or were not fit for their ordinary use, then they were not considered merchantable.
By the 1940s, after some further refinement and eventual codification in various state statutes, this court-made exception to caveat emptor became today's warranty of merchantability, which by law accompanies every sale of goods and protects consumers from defective merchandise even though they are in no sense "merchants".
In it current incarnation in most states, only the seller must be a merchant, the buyer can be anybody, merchant or not.
A product is merchantable if it is "suitable for the ordinary purpose for which it is ordinarily used.". A faucet must actually control water, a coffee maker must make coffee, a DVD player must play DVDs. See, it's simple!
The law says that manufacturers Note 2 make this promise automatically every time one of their products is sold to a consumer. They don't have to do the actual selling. If they merely place the product into the "stream of commerce", then they are responsible for its merchantability in the hands of the ultimate consumer.
The limitation of the original common law warranty of merchantability was that a product needed be merchantable only at the moment of sale. If it broke 10 minutes later, the warranty of merchantability did not apply – the sale was over, so the warranty of merchantability had expired.
To close this cavernous hole in warranty law, the Courts evolved a useful legal fiction. This was the concept of latency.
It worked like this: If a coffee-maker stopped making coffee, the concept of latency assumed that the cause of the problem must have been a defect that existed at the time of sale but it was invisible and undiscoverable, that is, it was "latent". It was not and could not have been discovered until the coffee-maker actually stopped working. It had existed all along, however, as a hidden defect in the product.
Since the latent defect existed at the time of sale, it was covered by the warranty of merchantability.
This concept of latency slowly morphed case by case into the less convoluted notion that for a product had to be merchantable, it had to be fit for its ordinary purpose not only at the time of sale but for a reasonable period of time after the sale.
The warranty of merchanability then became a two-part guarantee that required a product be
(1) fit for its ordinary uses at the moment of sale and
(2) continue to be fit for its ordinary uses for a reasonable length of time after the sale.
The merchantability warranty may not sound like anything much but it is everything you need to collect the cost of repairing or replacing a defective product.
What Defects are Covered by Implied Warranties
Implied warranties do not protect against every single thing that can possibly go wrong with a product. They do not cover improper installation or setup, abuse, misuse, ordinary wear and tear, failure to follow directions, improper or incomplete maintenance, war, riot, insurrection, insurgency, negligence, sabotage, criminal acts, extreme weather conditions, acts of God or of the government.
What they do protect against are problems caused by the design, engineering, and manufacturing of the product – usually lumped together under the term "manufacturing defects" – things over which the manufacturer has almost complete control. And, not every manufacturing defect is protected against. The defect usually must affect an "essential" purpose of the product.
If your gleaming white plastic coffeemaker starts turning yellow after a few months, you may have no claim. The color of the coffee maker does not affect its essential purpose: making coffee. But, if your gleaming white thermofoil kitchen cabinets start turning yellow, then you do have a claim because appearance is an essential feature of kitchen cabinets. One of the core purposes of the cabinets is to enhance the beauty of your kitchen.
Warranty of Fitness for a Particular Purpose
But, what if you ordered the gleaming white coffee maker to exactly match the color of your gleaming white kitchen cabinets? Well, that may be a horse of a different color (pun intended).
The discoloration could fall under the "particular purpose" doctrine of the fitness warranty, especially if you ordered a special white color (not in the manufacturer's ordinary line of colors), and paid a premium price for it.
The particular purpose doctrine holds that if the buyer buys a product intending to use it for other than its common purpose and the seller knew or should have known of the buyer's intention, then the seller's warranty also applies to the spcial or "particualr" purpose for which the buyer intends to use the product.
Your order of a special color may have the effect of giving the manufacturer notice that you had a special requirement of the coffee maker:. That notice is the key to recovery under the special purpose warranty: the manufacturer must know or have reason to know of the special purpose you have in mind for the product: in addition to making coffee in your case, it had to be gleaming white. The color now becomes a core feature of the product.
Some states view the particular purpose warranty as modifying the warranty of merchantability which now requires a product to be
(1) fit for its
(a) ordinary purposes and
(b) any special purpose of which the seller has notice,
at the time of sale and
(2) continuing to be fit for a reasonable time after the sale.
Other states consider the special purpose warranty to be its own, stand-alone, type of warranty: a warranty of "fitness for a particual purpose." No matter how it is viewed, however, the effect is much the same.
How Long Do Implied Warranties Last?
Implied warranties do not assume that a product will continue to perform forever.
Every consumer product is subject to the "it all turns to crap eventually" rule that scientists call "negative entropy" and lawyers term "ordinary wear and tear". Eventually, anything you buy will fail.
Implied warranties do require, however, that the product be of "normal durability". A product that is not normally durable is not considered "fit for its intended purpose," and breaches the warranty of merchantability.
|Life Expectancy of Home Appliances*|
|Appliance||Life Expectancy (in Years)|
|Air Conditioner, Window||5-7|
|Clothes Drier, Electric||13|
|Clothes Drier, Gas||13|
|Clothes Washer, Front Load||11|
|Clothes Washer, Top Load||14|
|Refrigerator, No Freezer||19|
|Water Heater, Electric||13-14|
|Water Heater, Gas||11-13|
|Water Heater, Tankless||20+|
|* Source: Appliance Magazine Research Report, 2011.|
Normal durability is, as you might suspect, a very elastic concept. Courts usually determine what is reasonable based on two things.
- The first is the general, commonly-held community perception of how long a product should last.
- The second is any representations the manufacturer has made about the durability or longevity of the product.
Almost everyone can agree that a faucet that leaks right out of the box is not reasonably durable. But what if it starts leaking 5 years later? Ten years later? How long does the common perception say an average faucet should work without leaking?
Should a $5,000.00 faucet last longer without leaking than a $50.00 faucet? What if the manufacturer advertised the $50.00 faucet as lasting a "lifetime". Does that influence the community's perception?
Common perceptions and manufacturers' statements create what are known as "reasonable expectations" in the mind of the buyer that can influence the buyer's decision about which product to buy and how much to pay.
You may not realize that you have certain preconceptions of the durability of a product but you almost certainly do.
If you buy a $2,500.00 Jura Impressa J9 coffee maker rather than a $39.99 Wal-Mart special, it's, at least in part, because in the back of your mind you expect the more costly coffee maker to be better made, more durable, and last quite a bit longer than the bargain-basement model – and also to make better coffee but that's neither here nor there for warranty purposes.
This is especially true if the seller advertises a product as being particularly robust or durable.
Manufacturers have a lot of influence over a buyer's expectations of product performance through promotion and advertising.
If the seller's claims would lead a reasonable person to believe that the product will last longer than competing similar products, the seller is probably going to be held to this higher standard.
So, if you bought something advertised as a "lifetime coffee maker", your expectation that it should indeed last your lifetime becomes reasonable, even though the common perception is that a typical coffee maker would not last nearly that long.
A lot of composite deck manufacturers were sued and had to pay up big time when their early promises of a "lifetime maintenance free" deck turned out to be a gross overstatement.
Customers with decks that stained, cracked, fell apart, and grew mold and mildew like it was a cash crop were frequently denied warranty recovery by companies claiming that the product warranty had expired.
The courts, however, found that even though the express warranty had lapsed, the implied warranty of merchantability supported the consumers' claims. In other words, if the company advertises a lifetime maintenance-free deck, then it had better deliver a deck that is maintenance-free for the consumer's lifetime. If not, the company pays. There is not a single composite decking manufacturer that now advertises a lifetime deck.
Disclaiming Implied Warranties
But, if implied warranties are automatic, how is it that Big Al down at Al's Super-Clean Used Cars can sell his broken down clunkers "as is" without any warranty of any kind?
Simple. Thirty-nine of our 54 states and territories allow the sale of consumer products without an implied warranty if the seller clearly discloses the fact, that is, disclaims any implied warranties. But he must do it the right way for it to be effective.
First, Big Al must not provide his own written warranty on the vehicle. If he does, then the Magnuson-Moss Warranty Act prohibits him from disclaming state-law implied warranties.
The schema underlying Magnuson-Moss is that a company's written warranty supplements implied warranties. It does not replace them. So, if Big Al did provide a written warranty, he could not legally disclaim state-law implied warranties. But, Big Al has never offered a written warranty in his life, so that's not a problem here.
In addition, Big Al must comply with all of the common law requirements for disclaiming implied warranties. He must …
- Make the disclaimer in writing,,
- at or prior to the time of sale,
- in a conspicuous manner so it will be noticed,
- using language that makes it clear and unmistakable what warranties are disclaimed, and
- provide the buyer with an opportunity to examine and test the object being purchased prior to the sale.
• District of Columbia
• New Hampshire
• West Virginia
So, if Big Al informs you in writing that the cherry-red, candy-apple-flake '57 Chevy Malibu convertible with the "real leatherette" top you are eyeing is being sold "as is" or "with all faults" or "without warranties of any kind", then this is an effective disclaimer of any implied warranty provided he also gives you a reasonable opportunity to examine and test the vehicle.
If you decide not to examine and test the car, that's on you. Big Al is covered if he gave you the opportunity regardless of whether you took advantage of it. If you then buy the car, you are buying it while fully aware that you and you alone are at risk if it proves to be defective.
When describing how warranties work, almost every writer of law books uses the "buying-a-used-car" example. Why? Because it is the type of buying situation that implied warranties were designed for: face-to-face negotiations over price and terms, and an opportunity to examine the product minutely before purchasing.
When warranty law was codified, largely in the 19th century, at the dawn of the industrial age, it was assumed that all consumer transactions would take place just this way. It's how your great-great-grandfather bought everything from horses to tooth powder.
But, in the internet age, automobiles (and horses) are just about the only consumer product still sold that way. The modern consumer buying experience in today's blister-pack retail economy is very different.
Let's look at a more typical consumer sale.
The Typical Retail Sale
You've been thinking about buying a DVD player since 1997 and decide now's the time. Prices will never be lower. So, you mosey on over to Easy Eddie's Electronics Emporium.
You find a player manufactured by Szechwan Lucky Golden Electric Co. Ltd. that you like the look of, and it's in your price range, so, you buy it.
Ninety-one days later it stops playing DVDs.
You immediately call the manufacturer's warranty number, only to learn that the express warranty on the device is 90 days. "But," you exclaim, "what about my warranty of merchantability." Sorry, explains the customer service agent, we clearly disclaimed all warranties of merchantability or fitness in the documents you received with the player.
You go back to look at the instruction manual in the pristine plastic envelope (which you have heretofore neither opened nor explored) and sure enough there is indeed a statement disclaiming in conspicuous bold print all warranties of any kind, including warranties of merchantability and fitness for a particual purpose, except the manufacturer's 90-day express warranty. So, you're out of luck.
Or, are you?
Since Magnuson-Moss prohibits companies that provide a written warranty from disclaiming implied warranties, most likely the party out of luck is Lucky Golden. But, for our purposes at this moment let's assume that Magnuson-Moss does not exist. Would the disclaimer be effective even without Magnuson-Moss?
To find out, let's break down the transaction at Easy Eddie's to see how it compares to buying a used car from Big Al.
Did you get the disclaimer at or before the time of sale?
Are you kidding? The disclaimer is buried in the box. You did not open the box until after you got home. The box is expressly designed by expert packaging engineers to discourage opening in the store prior to sale. It is blister-packed, hot-glued, stapled, taped, and shrink-wrapped. Its primary purpose is to protect the product and that includes keeping it safe from manhandling by snoopy shoppers.
So, you had no opportunity to read the warranty disclaimer ensconced deep in the packaging, and thereby get any notice of any disclaimer of implied warranties, until well after the sale.
Did you have an opportunity to examine and test the product at or before the time of sale?
How could you? Commonly not only is "some assembly required" but "batteries are not included".
If you did manage to open the tamper-resistant, fire-retardant, waterproof, high-security packaging and remove all the expanded foam packing to extract the DVD player from the box without setting off an alarm while somehow eluding arrest and detention by Milton the mall cop for shoplifting and malicious destruction of store property, there's no place to plug it in.
So, you don't even get to see the product in action until you finally master the "easy assembly" instructions (literally translated from ancient and honorable Mandarin), and put it together after several trial runs many weekends later.
Was the written disclaimer conspicuous enough to grab your attention?
Conspicuous? It's not even visible – entombed deep inside the box, usually combined with the written warranty and typically co-mingled with assembly instructions (in seven languages), the user manual, catalogs, coupons, "exciting offers" and other claptrap manufacturers commonly stuff into the box.
Even after you open the box and extract all the paperwork included with the product, there is seldom anything, like a bright paper color, to distinguish the disclaimer from all the other reams of paperwork inside the box. Absolutely nothing about it commands your attention.
Usually, the only way to find it is to dig for it with the patience of an archaeologist excavating a stone-age burial mound, carefully examining the documentation one page at a time until you finally stumble across it.
You have to be dedicated, determined, and persistent to find it at all. Conspicuous? You must be kidding!
Disclaimers and Magnuson-Moss
A seller that does not offer a written warranty can disclaim implied warranties, provided the law of the state allows it and provided all of the conditions outlined above are met.
This is how Big Al can offer his rustbuckets "as is" without a warranty of any kind. (But, if Big Al then offers a "service agreement", his disclaimer may be void if the service agreement is actually a disguised warranty. But, that's a subject for a different article.)
If the merchant has a written warranty, however, Magnuson-Moss prohibits it from disclaiming or modifying implied warranties.
There is one exception: A seller providing a "limited" warranty (but not a "full" warranty) can limit the duration of implied warranties to the term of its written warranty.
Here is how that works. If Lucky Golden offers a 90 day limited warranty on its DVD players, it could include language in its written warranty the limits the duration of the state law warranties of merchantability and fitness for a particular purpose to the same 90 day period. However …
- The limitation must be clearly and conspicuously stated in the written warranty.
The limitation has no effect in the states that prohibit modifications, limitation or disclaimers of implied warranties and The warranty must inform you of this fact with the required boilerplate phrase:
"Some States do not allow limitations on how long an implied warranty lasts, so the above limitation may not apply to you."
But, if Lucky Golden has language in its warranty something like this …
"Any implied warranties arising by way of state law, including any implied warranty of merchantability and any implied warranty of fitness for a particular purpose, are limited in duration to the 90-day term of this warranty. Some States do not allow limitations on how long an implied warranty lasts, so the above limitation may not apply to you."
You would be out of luck. This language effectively terminated the covererage of state law warranties on the 90th day after the sale You have no warranty coverage either under Lucky Golden's written warranty or state-law implied warranties.
However, in the hundreds of warranties we have examined over the years, we have seen language like this two times. Most warranties assume that a general disclaimer of implied warranties has the effect of limiting the duration of these state-law warranties to the term of the company's written warranty. (See the Moen warranty above.).
But, such is not the case. A limitation of the duration of implied warranties, according to Magnuson-Moss, must be made in clear and explicit language that gives actual notice to the buyer that the warranties are limited in duration. A general disclaimer does not provide the required notice.
Extended Warranties and Service Agreements
An extended warranty lengthens the period of the manufacturer's standard warranty period. For how long depends on the product, but typically for one to three years. You pay for this warranty. The amount you pay is usually based on the value of the product being warranted.
What you get for your money is absolutely nothing whatsoever.
All the seller promises to do is to honor some (but not all) of the warranty rights you already own – given to you free of charge (except for the modest income, sales, occupation, use, property, and excise taxes you pay for the privilege of being governed) by the state as implied warranties. Why would you pay money to buy legal rights that you already possess?
What a profit maker! P. T. Barnum would be so jealous!
Service agreements are also suspect as extended warranties in disguise. What they promise is, if the product breaks, the company will fix it. This duplicates the implied promise the company has already made in selling the product with an implied warranty of merchantability attached. So, again, why would you pay good money for a right that you already own?
So, here's the simple rule: Never, under any circumstance or condition, buy the extended warranty. It's a sucker's game. Buy a service agreement only if it offers substantial benefits not already available under the implied warranties you already own – for example, same-day, on-site service for your critical home office computer.
Consequential and Incidental Damages
Morton-Thiokol, Inc. designed and built O-rings that kept the Solid Rocket Boosters (SRBs) on the Space Shuttle from leaking fuel during take-off.
The rings had never been tested in cold weather. After all, the Shuttle was launched from Florida where it rarely gets cold. But, the temperature was unusually cold on January 28, 1986, when the Challenger lifted off from Cape Kennedy, and 73 seconds later an o-ring failed, the right SRB exploded and the spacecraft was destroyed.
What is Thiokol's liability under warranty?
It is certainly liable for the cost of the failed o-ring. This is the damage that the law terms the "direct" damage – the cost of repairing or replacing the product itself. But, is it also liable for the destruction of the shuttle? This is what lawyers call "indirect" or "consequential" damage, that is, damage that is caused to other things as a consequence of the failure of the product.
Let's look at another example, closer to home. The hose on your pull-out kitchen faucet becomes detached and sprays water all over your kitchen. Your cabinets, floor, and walls are seriously water-damaged to the tune of several thousand dollars. The only direct damage is the defective hose, a few dollars at most. All of the other damage is consequential.
Is the manufacturer liable under warranty for damages to other things caused by the failure of its product?
The short answer is "yes". The general rule is that you must be "made whole", that is, restored to your pre-defect condition. This means, in the faucet example above, that you must be compensated not just for the broken hose on the faucet, but all of the other damage that was caused by the broken hose. There are a lot of exceptions and gradations of liability but generally, the manufacturer is liable for consequential damages.
You have to show that the defect directly caused (lawyers say "proximately" caused) the damage to the other things: the o-ring failed which proximately caused the shuttle to explode, the faucet hose leaked which directly caused water damage to other components of the kitchen. But, if you can do that, the manufacturer has to pay for the damage.
But, there's more. Not only is the seller responsible for your consequential damages, it is also taxed with your costs of making and proving your warranty claim.
These are called "incidental" damages in the legal world and include your cost of packaging and shipping the product to a repair center, the costs of having your plumber uninstall your defective faucet so it could be mailed to the repair center, the cost of hiring a forensic investigator to find out exactly why the do-da broke in the first place, and any other reasonable cost of making and proving your warranty claim, including your attorney fees if you end up having to sue.
Disclaiming Consequential and Incidental Damages
But, like implied warranties of merchantability and fitness for purpose, consequential and incidental damages can be disclaimed. Not always. Some states do not allow consequential or incidental damages to be disclaimed in the sale of consumer products. And, even in states where disclaimers are allowed, just as in the case of the implied warranties, most disclaimers are ineffective.
The rules governing the disclaimer of consequential and incidental damages are much the same as the rules for disclaiming implied warranties. The seller must...
- Make the disclaimer in writing,
- at or prior to the time of sale,
- in a conspicuous manner so it will be noticed,
- using language that makes it clear and unmistakable consequential and incidental damages are disclaimed.
The only difference between disclaiming implied warranties and disclaiming consequential and incidental damages is that the seller does not have to provide you with an opportunity to examine and test the product prior to the sale in order to disclaim consequential and incidental damages.
As with disclaimers of implied warranties, rarely is a disclaimer given at or before the sale, so most of the time if a consumer product causes consequential damage, you can sue for and collect the amount required to remedy the damage.
Many times, however, the boundary between direct and consequential damages is not a clear, bright line. Some damages could be either. If your faucet leaks, is the cost of hiring a plumber to replace the leaking part a direct or consequential damage?
Most sellers would argue that it is consequential, and, therefore, not the seller's responsibility because such damages have been disclaimed. But here's another argument: The part supplied by the seller does not install itself, and the faucet is not actually fixed until the part is in place.
In most states, a homeowner cannot legally fix his or her own faucet. A licensed plumber is required for all plumbing work (check it out, I'll bet it's true in your state). So, the cost of hiring a plumber to install the part is actually a direct, not a consequential, damage.
Generally, if there is substantial consequential or incidental damage, any lawsuit is best left to a skilled lawyer who knows how to prove causation and damages.
For example, here is a lawsuit you don't want to handle yourself:
Your brand new coffee maker catches fire. The smoke detector, which should have sounded the alarm, failed, so you did not discover the fire until it had engulfed your kitchen.
The fire was accelerated by partly empty paint cans negligently left open by the painters who were painting your kitchen cabinets.
The fire safe that was supposed to protect the cash you were hiding from the government (and your valuable papers) was defective and allowed them all to burn to ashes.
The roof over the kitchen caved in, caused in part by the weight of a fourth layer of shingles installed by a roofer in violation of the local building code that allows no more than two layers on a residential roof.
And, finally, the fire department's response was unduly delayed when the pumper dispatched to your house was struck broadside by a drunk driver and crashed into a tree that was planted too close to the street by a homeowner in violation of a local ordinance requiring that trees be set back, away from the curb.
Unless you can sort out who is liable for what damage, then this is an area where you should not venture without legal help.
Enforcing Your Rights Under Warranty
So, your guaranteed-not-to-leak-for-your-lifetime faucet is leaking. What to do?
First, fix the faucet. This sounds a little like common sense but a surprising number of people don't first fix the faucet. They leave it broken while dealing with the manufacturer's warranty claim process.
This puts you at a disadvantage because you are sitting there with a faucet that does not work, which makes you impatient. Impatience is your enemy. So, first, call the plumber and get the faucet fixed.
Let the plumber worry about figuring out what is wrong and getting the parts and materials together to fix it. It's his or her job. If you have the notion that fixing a defective faucet under warranty is not going to cost you anything, forget it. You will pay the plumber first, then get your money back later. If the plumber decides the faucet cannot be fixed, replace it.
Get an itemized receipt from the plumber that details what was wrong and what was required to fix the problem.
If you have not already done so, go find your original sales receipt. If we installed the faucet for you, we put your receipt, your warranty card, and a note with the date and time of original installation in a plastic bag and taped it to the inside of your sink cabinet. Even if you forgot where we put it, your plumber will find it.
We recommend you do the same with every faucet in your house (also water heater, furnace, air conditioner, water softener, etc). Your original receipt should have the faucet model and possibly a serial number. If it does not, have the plumber put this information on his or her receipt.
Now you are ready to deal with the faucet company.
Step One: The Claims Department
Attitude is everything in making a warranty claim. Stay calm, don't get angry, don't be rude or abusive. The poor customer service agent you are dealing with gets enough of this from other, less enlightened, people. Get him or her on your side by being cordial and friendly.
You want the agent to be in a frame of mind where s/he wants to be as helpful as possible because you're such a nice person. Answer all questions, even the dumb ones, as politely and patiently as you can. State your position clearly: The faucet leaked, you had to call a plumber to fix it, and you spent (fill in the blank) dollars to do so, and that's the amount you expect to be reimbursed.
You are unlikely to get a resolution on the very first telephone call. What you will get is a claim number and a request that you fax or e-mail your supporting documents.
Send in the receipt and plumber's bill. Make sure the claim number is written on every single page. A typical claim department is a madhouse, somewhat less organized than the proverbial Chinese Fire Drill. Stuff gets lost all the time. Minimize the chance of it getting lost by identifying every page of every document with the claim number.
Now, wait. You will get a call back in a day or two. If a week goes by and you have not heard anything, call them back.
Most likely the claims agent's authority is limited to sending out replacement parts, so that's the offer s/he will make. Since you have already bought the parts, this does not resolve your problem. So ask politely to speak to someone who can authorize a payment. You will probably need to explain your position all over again to the supervisor, and possibly the supervisor's supervisor. Again, be patient.
I have seen only one written manufacturer's warranty that promises to pay a plumber's labor to fix a defective faucet – from a German company called In2aqua. All most faucet companies promise to do is replace any defective parts (see the Moen warranty above).
That should not be good enough. The supervisor will tell you that he or she can only authorize the cost of the part. Ask him or her if there is someone there who can authorize the labor expense. If there is, ask to speak to this person, and restate your case.
About one-third of the time, the Big Boss will realize that you have your ducks in a row and will just authorize the labor charge, and you will get a check in a few weeks.
More likely, however, the Big Boss will not agree to pay the labor, claiming that it is specifically excluded by the company's warranty. Your answer is: "I am not claiming under your written warranty. I am making a claim under the implied warranties of merchantability as provided in the laws of the state of (fill in your state name), so what your express warranty says is not relevant."
If the Big Boss responds that the express warranty disclaimed all implied warranties, your response is: "Your disclaimer is ineffective under the laws of the state of (fill in your state name) because it was delivered only after the sale was completed, and, in any case, such disclaimer are expressly prohibited by the federal Magnuson-Moss Warranty Act. It is therefore void and without effect."
Say these things with great confidence and authority because (1) you're right and (2) the more you sound like a lawyer, the more attention you will get.
Odds are good that the company will cave in at this point, and pay up. But, if they don't, then there's Step Two.
Step Two: The Legal Department
Tell the claims supervisor politely that you don't feel a resolution can be reached at his/her level, and may you please have the name and address of the head of the legal department. This is usually a lawyer but may be a paralegal.
Claims departments hate to have a dispute bumped to the legal department. It's a black mark on the old bureaucratic scorecard. So, at this point, you will may get an offer in compromise. Not everything you asked for but something more than the original offer. If this is good enough, take it. If it isn't, then proceed.
Write a letter something like that at right to the legal department. Again, be polite, don't threaten. People, get oppositional when threatened. Your goal is to bring the legal department over to your side since yours is the side of reasonableness, light, and the American way.
Don't go into great detail. The information in the sample letter, together with your original sales receipt and the plumber's bill is all you need. Be sure to include the original warranty claim number so the legal department can (hopefully) find the file.
The legal department will evaluate the legal soundness of your claim. The first question they will ask themselves is "Will you win if you sue?" The second is "Is it worth our time and money to defend?" This is straightforward bottom-line arithmetic. And the answer depends on whether they believe you will actually sue.
But, a letter like the one illustrated suggests that you know what you're doing, and just might sue. Worse, you might even be a lawyer (Oh my God!). That perception will get some serious attention from the legal department because they know lawyers will sue even when normal, rational people won't.
Don't expect a quick answer. Legal departments are usually understaffed and overworked. Like claims departments, they don't make a profit, so manufacturers don't spend much money on them.
So, wait. But not too long. Give it two weeks. If you have not heard back in two weeks, write a second letter restating your claim and enclosing a copy of the first letter with attachments. In your second letter, also give them a definite time limit to respond. Two weeks is enough. Wait some more. After two weeks, if you don't hear from them. you can consider their answer is "No".
But most of the time you will get a timely (by legal department standards) response restating the company's position – generally, they will pay for parts but not for labor, and strongly implying that you must be some sort of carpetbagging scallywag and fortune-seeking opportunist daring to ask for more money than the company (out of the goodness of its warm and fuzzy, bottom-line-minded, profit-grubbing, corporate heart) has agreed to pay.
Or, they may agree to pay for parts and some portion of the plumber's labor, "as a gesture of good faith" or "just for customer relations purposes". If this is good enough, take it. If not, then proceed to the next step.
But first, just for fun, send a letter thanking the legal department for their time and consideration, and asking whether the department will accept service of summons on behalf of the company.
This rather innocent inquiry usually gets a prompt response, and often an offer to settle, since it indicates you intend to sue. Nobody likes to be sued. And, Really Big Faucet Company likes it less than most because it knows it cannot win.
But we won't sue yet. We will first explore alternative dispute resolution.
Step 3: Mediation and Arbitration
A surprising number of manufacturers are not members of the Better Business Bureau. But many are. As members, they have agreed to use mediation and arbitration as a means of dispute settlement if a claim is filed by a consumer.
You can also file a complaint against a business that is not a member of the BBB. It is less likely to be successful but sometimes it works.
The first step is to file a complaint. There is a handy online complaint form at the Council of Better Business Bureaus, Inc.
The BBB will send your compalint to Really Big Faucet Company and ask for a response.
The company will usually respond promptly. The BBB publishes records of complaints, and no business wants a bad rap as a business that has not responded to its BBB complaints.
Much of the time, the compalint will be resolved. You may not get everything you want, but Really Big Faucet Company is anxious that the compalint be marked by the BBB as "resolved" which helps its BBB rating.
The BBB rates businesses from A+ to F based on how they respond to consumer complaints. Not every compalint has to be resolved, but the company must make a satisfactory effort to get it resolved to keep a high rating. So, it will probably bend over backward to see that you are made happy.
If the result is satisfactory, your are done. If not, the next step is mediation.
In most instances you will exchange pretty much the same letters (or, more likely, e-mails) you have already exchanged. You will present your claim, the company will explain its position. You will respond with an explanation of why the company's position is not acceptable, and so on.
BBB mediators are professionals and are very good at it. They will impartially coax both parties step by step to a compromise solution. If the result satisfies you, then again, you are done.
If not, then it's on to binding arbitration.
If the business is a BBB member, it will have already agreed to submit to binding arbitration of any customer complaint and must participate or lose its BBB accreditation. If it is not a member, it will have to agree to submit to and be bound by the result of the arbitration. This is done by both parties signing an arbitration agreement.
BBB Arbitration is completely free in most areas. It is a part of the services that the BBB offers to the community. It's also fairly easy. Everything, including the final hearing, can be done by letter, e-mail, and telephone. For a busy person such as yourself, it is ideal.
Manufacturers hate binding arbitration. It's nearly as much trouble for them as a lawsuit. They have to prepare a case, send a representative; it takes time and costs money. Most of the time they will settle with you at this point.
If they don't settle, there will be a hearing before a trained arbitrator, usually a local lawyer, judge, or business person in the community. Lots of retired judges become BBB arbitrators, so in arbitration, you are quite likely to get a more experienced judge than you would in a courtroom. Within a few days, you will get a finding, and almost 100% of the time, a binding arbitration award in your favor.
Typically the BBB makes the company pony up the amount in dispute which is held in escrow pending the outcome of the hearing, so you get paid right away.
Step 4: Small Claims – The Peoples' Court
I have never understood why regular people avoid small claims court. It's the true people's court. It was set up just for ordinary folk – people who know nothing about the law or how to sue someone but who have a legitimate grievance that should be resolved.
It's your chance to get even modest claims adjudicated by an impartial judge on a level playing field against even the biggest and most powerful of the world's mega-corporations – all without the bother and expense of hiring a lawyer.
In fact, in small claims court, lawyers are actually banned (a very sound policy more of the institutions of our society should consider adopting). For your warranty claim, it's the perfect venue.
Every small claims court has a brochure or booklet on how to file a small claim. In addition, for most states, an enterprising lawyer or paralegal or two has written a "how-to" manual. This usually goes into more detail about the entire small claim process in your state and is well worth checking out of the library or purchasing online.
To find out if one exists for your state, just Google "small claims court [your state]", and pick through the results. If someone has written a manual for your state, it will show up. Check the publication date, however. Some of these were written many years ago, and things have probably changed.
There are also some general guides. The best I have found is from NOLO, publisher of the respected online legal encyclopedia, entitled Everybody's Guide to Small Claims Court. Most of this book is also available for free online, along with scads of other useful legal information, at the NOLO website.Filing the Complaint
Small claims court rules are fairly simple but they are still rules, and you have to follow them.
Find out what they are by calling the clerk of the court and getting a copy of the small claim rules and a complaint form. These are free. Read the rules. Read the rules again.
Don't hesitate to call the clerk to explain any rule that is not clear. He or she will tell you s/he is not a lawyer and cannot give legal advice, then, after having made this disclaimer, will usually proceed to explain what it all means.
The complaint is usually a pre-printed form that contains all the legal jargon you don't need to know, with a space for you to write in the substance of your complaint.
State your claim clearly and succinctly just like you did in your initial letter. You might want to write a draft or two first, to get the word count down.
Attach copies (never originals) of your receipts and other supporting documents to the complaint (these are now called "exhibits"), write a check for the filing fee and send it in.
In a few days, you will get a stamped "official" copy of your complaint from thecourt that has now been assigned a case or docket number by the court clerk.
Accompanying the complaint, often just added to the bottom of the complaint document is a "summons". In Nebraska, this is entitled "Notice to the Defendant". This is a court order requiring the defendant (the company, in this case) to appear before the court on a specified date and time to answer your complaint.
You have just gotten the power of the state behind you. But the reason the documents were sent to you and not to the defendant is that it is up to you to actually "serve" the summons and complaint on the defendant. The court will not do that for you.
The summons will be accompanied by a set of instructions on how to serve the defendant. Read these carefully. In most states, you can hire a private process server or the sheriff in the county where the company has its headquarters to physically hand the summons to a corporate officer.
But, the easiest and cheapest way to serve the summons and complaint is just to mail them to the company's resident agent by certified mail, return receipt requested. For under $8.00 in postage and fees, you hire get the U.S. Postal Service to do all the heavy lifting.
Every company that does business in your state has to have a registered agent physically located in your state. To find out who this is, you can usually just call the company's legal department. If that fails, you can look it up yourself online at the state government website of the agency that handles corporation filings. This is usually the Secretary of State's office.
Almost all corporation filings are public documents and available for inspection. Usually a Google search on "corporation search (your state)" will find the right office. If you can't find it on the website, you can usually telephone the Secretary of State's office to get the information, or at very least, help with using the website.
If the company does not do business in your state, then you have to look for information about the company in its state of incorporation. Generally, this will be either (1) the state in which the company has its headquarters, (2) Delaware, or (3) New York.
You can usually find out from the company's website its actual corporate name, and the state in which it is incorporated. Look in the "About Us" and "Contact Us" sections.
The actual corporate name is important. Many companies do business under what lawyers call a "fictitious" name, and what everyone else calls a "trade" name, that is not its true legal name. In most states you must sue the defendant under its legal name, not its trade name, although some states are more forgiving than others.
Corporation filings will tell you the name of the company's registered agent and his or her address. Usually, it is a law firm or company that provides multi-state agency service. This agent accepts service of process on behalf of the company. Serving the agent is legally the same as serving the company's president.
(See the example above, an actual page from the Delaware Secretary of State's website.)
Mail the summons to the agent by certified mail, return receipt requested. You can do this at the post office. But we usually just drop in on the local SuperMart. One guy gets the coffee and Ho-hos, the other takes care of mailing the summons. Many supermarket stores offer this service at the customer service counter. So do some banks (but you can't get Ho-hos at a bank).
In about 10 days the post office will return the signed receipt to you. Make a copy of it for your file, then attach the original to the form you received from the court that certifies that you served the defendant in "the manner as prescribed by law." Don't forget to sign it. And, don't forget to mail it in. If you don't send in this form, the company is not considered served with the summons and does not have to appear in court.
Find a Company By Its Trademarks
Here's an old, lazy lawyer's trick for finding the state in which a corporation has its headquarters. It relies on the fact that almost the first thing a corporation does is register its name and logo as a trademark. Here's how to find it:
In the white band just below the black header, you will find
Click on |Trademarks|.
One of three things will now happen.
1. To the company, getting the summons is a heads up that you are serious about your warranty claim. Most likely someone from the company will call you and offer you everything you asked for because it is a total pain in the posterior for them to appear in small claims court.
The company can't just send a lawyer. Remember, lawyers are barred in small claims court. And, they can't just send one of their local sales reps. In most jurisdictions, they have to send someone important – a representative who can actually speak for the corporation.
If the defendant has a local store, you might get the store manager. But, if it was an internet sale, the company has a problem. Can you imagine even a junior vice president flying to your hometown to defend a $500 lawsuit? I can't either. This is when the company gets very motivated to get you out of its hair.
Don't forget to add the amount of the filing fee to your revised claim amount, and the cost of the certified service of summons. But don't get greedy and start piling on frivolous charges. If they get their dander up, you just may get to meet the junior vice president after all.
2. The second most likely result is that the defendant just won't show up.
A defendant does not have to show up in a civil case. If the company does not appear, the law assumes that it was because it had no defense to offer to your warranty claim, and the court will usually, without any prompting from you, enter a default judgment against the company in the amount of your claim.
But, just to be sure, ask for it, politely. This is a judgment you can collect on, and is just as good as a judgment after trial.
3. The least likely result is that the defendant will send a representative, and you will have a trial. It's rare but it sometimes happens.The Trial
If someone does show up, you get a trial, which might seem scary but actually is not scary at all.
There are very few rules or formalities in small claims court. Common civility is typically the only requirement. The judge will direct the proceeding. It's all very informal, friendly, and non-intimidating. Many courts hold the trial in the judges office (or "chambers") rather than in a courtroom. Half the time the judge does not even bother to don robes.
In a real courtroom, unlike what you see on Law and Order, there is no yelling, jumping up, waving arms, or pounding on the table.
Be polite and speak only when invited to by the judge. Don't waste the court's time being argumentative or interrupting the other guy. There are dozens of cases waiting behind yours, and the judge is a very busy person.
The judge conducts the show, so you don't actually need to know what to do. Each side just tells its story under oath. When it's your turns, stand up, tell your story, sit down and shut up.
Stand when addressing the court unless told otherwise. Don't object to anything. Perry Mason, you ain't. You don't know what to object to. Don't be confrontational. If the defendant says something you want to dispute, make a note of it. You will get a chance when it's your turn to speak again.
You can ask questions of the defendant when invited to by the court but do so politely. But, don't try to cross-examine. You don't know how. Cross-examination is an art that requires a lot of skill and years of practice, and you have neither. Besides, the company's representative probably does not know anything useful. He or she was not there, saw and heard nothing, and probably knows bupkus about your warranty claim or the defective product. He or she is just a warm body sent by the company to fill its seat in the courtroom.
The judge will usually ask both parties questions to clarify the facts of the case, and also ask you for any receipts or other documents you have to support your claim. Here's what you should bring:
- The original purchase receipt.
- The plumber's invoice.
- A copy of the front and back of your canceled check to the plumber.
- If you replaced parts, the old parts so you can show the judge how they are defective.
- If you replaced the whole faucet, the old faucet so you can show the judge how it is defective.
Of course, if the defective product is too big to carry around, like a window or your car, bring clear photographs instead.
You may also bring the plumber. He can testify about what he had to do to repair or replace the faucet and why it was necessary. If your plumber is reluctant to come, you can require his appearance with a subpoena. Your helpful small claims clerk will show you how to go about applying for a subpoena.
The company will defend by explaining that while they may owe you for the parts, labor is explicitly excluded by their express warranty.
You will counter by telling the court that you are not claiming labor under their express warranty but under the implied warranty of merchantability ; which have no limitation on labor. And even if Really big faucet company had disclaimed labor as a consequential damage in its written warranty, you did not get a copy of the written warranty until after the sale, which is too late for disclaimer to be effective.
Your "lifetime" faucet leaked and you had it fixed. This entailed a reasonable plumber's charge for parts and labor in the amount you are claiming to remedy the defect and make you whole again.
The judge may be be impressed that you even know all that stuff but he or she won't act impressed. Never play cards with a judge. They have a poker face not to be believed.
You probably won't get a decision that day. Judges like to take matters "under submission" so they have a little more time to read the documents carefully and reflect on the evidence but you will get your judgment in less than two weeks in most courts.
The odds that you will win, barring a complete screw-up on your part, are slightly above 99.9%. In most jurisdictions, the losing defendant (now called the "judgment debtor"; you are the "judgment creditor") has 20-30 days to pay the judgment.
Collecting the Judgment
The next step is turning the judgment into money.
Keep in mind that a judgment is not money, it is the right to collect money and the right to get the court to help you collect money. Most of the time the company will pay right away because most state laws require corporations to pay judgments promptly. If it doesn't pay, send a letter to the company president with a copy of the judgment demanding payment. If it still doesn't pay, you can execute or garnish.
Execution is not as ominous as it sounds and garnishment has nothing to do with how you decorate your grilled salmon pâté platter.
Execution (or "execution on the judgment") is a legal process for taking property or money from the defendant to pay the judgment. The process is usually handled by the local sheriff who serves a writ of execution on on the defendant, using any money he collects to pay your judgment. If this is not enough, the sheriff then auctions off any property of the defendant and uses to proceeds to pay the judgment. Any remaining funds are returned to the defendant, minus the Sheriff's "modest" collection fee.
If the defendant has facilities or property in your county, the process is fairly simple. The sheriff goes over to the store and empties the defendant's cash registers until a sufficient amoount of funds is obtained.
But if not, then it gets much more complex. You have to go through a process of registering the judgment in the defendant's state and county, then request a writ from the court having jurisdiction in that county to execute on the defendant's property. It's usually not worth all the trouble, especially since garnishment is much easier.
Anyone who owes the defendant money or holds any of the defendant's property or assets is a potential "garnishee" and can be garnished.
Garnishment is the process of legally compelling a third party that owes the defendant money or has possession of the defendant's property to hand it over to the court rather than to the defendant. The court then uses as much of the money as it needs to pay you and returns the rest, again minus a "modest" collection fee.
The defendant's bank is a good choice for garnishee. Banks always seem to have money lying around. Also, anyone the defendant sells to is a potential garnishee. I like Home Depot, Wal-mart, and Amazon. They buy everyone's products and almost always pay in arrears, so they owe almost everyone money on any given day. And, they do business in every state, so they are conveniently nearby.
Finding Someone to Garnish
If you are not sure who to go after as garnishee, you can find out exactly who owes the company money, and the name and address, and account number of every one of the company's bank accounts in what is called a "debtor's examination".
In some states, the initial examination is by written questions called "interrogatories". Interrogatories is just lawyerese for "questions", so don't be put off by the fancy name. You provide a list of questions that you send to the defendant who has 20-30 (depending on the local court rules) days to answer them.
My one interrogatory is always an easy one:
Plaintiff's First interrogatory: Please state, individually for each such account, the full name, branch name, branch address, branch telephone number, account name, and account number of any and all bank, savings, money market, investment or deposit accounts of any kind or nature, domestic or foreign, in which Really Big Faucet Co, Inc. or any subsidiary thereof, has any direct or indirect interest, ownership or right of withdrawal or from which the company can or may receive any direct or indirect profit or benefit.
Companies don't like to give out this information, especially in a document that by law in most states is a public document. So rather than answer, they will usually just pay up.
There is also an oral examination in most states. The process for forcing the company to appear for an oral examination varies from state to state but typically you make an application to the court. The court then sends the defendant an order requiring it to produce a representative to answer questions about its finances.
I usually ask for the Chief Financial Officer figuring he or she probably knows a little something about where the company has stashed its cash. Your friendly small claims court clerk will help you with the application, after the usual disclaimers.
The company is not going to send its Chief Financial Officer or anyone else for that matter, nor is it going to risk contempt of court by just not showing up.
Unlike the trial, at which the defendant's appearance is optional, the company has no choice but to appear when ordered by the court to submit to a debtor's examination.
Small claims may be a minor court but it still has all the usual courtly powers, including the power to toss people in jail when its orders are blatantly ignored. Most inconvenient, that "toss in jail" business. What the company will do is send you a check and ask you to please go away and never darken its corporate doorstep again.
But, if the company does return answers to your written questions, or someone actually does show up to answer your oral questions, which s/he must do under oath, then you will find out where their assets are and who owes them money. Now you can proceed with garnishing these garnishees.
How to Garnish
You fill out and file with the court (this can all be done by mail) an application for a writ of garnishment for one or more of these garnishees. This is usually a form that the court clerk will happily give you for the asking.
The court will send the writ which instructs the garnishee to pay to the court any money it owes to or holds on behalf of the defendant/debtor; up to the amount of the judgment. The garnishee responds either with money or a response form stating that it does not owe the debtor any money at the present time.
You can send out as many garnishment writs as you want, as often as you want until the full amount of the judgment is paid. In most jurisdictions, there is a small fee for a garnishment writ but this is just added to the amount the company owes on the judgment (by the court clerk, you don't have to keep track of it)
Usually, after the first one, the company pays. No one wants a reputation in the business community as a judgment deadbeat that does not pay its lawful obligations. But if it doesn't, well, you now know how to collect the rest.
So, there it is. You have enforced your first warranty claim. You are a Certified Warranty Warrior.
One thing for sure, you won't hesitate to enforce the next one. And, if everyone used the simple enforcement tools readily available instead of just belly-aching on the world wide web, manufacturers would start taking warranties much more seriously than they do now, and there would be a lot less to belly-ache about.
If you go the distance and end up in small claims court, you will quickly find out how easy it is to use the court to enforce your warranty rights, and you will probably start skipping Steps 2 and 3 and go directly from making a warranty claim on the company to filing a small claims complaint.
I do. I give the company one chance and 30 days to pay up, then I file a small claim. Most of the time I have my money in two weeks or so after filing. And, I have never had to sue the same company a second time.
Good luck, not that you'll need it.
About the Author: J. M. Edgar received his Juris Doctor degree in 1980 after study at Georgetown University Law School, the University of Nebraska School of Law, and the McGeorge School of Law. He practiced for 16 years primarily in intellectual property and tax law before retiring to return to his first love: carpentry and cabinetmaking. He is a member of the State Bar of California and admitted to practice in the federal Eastern District of California, the 10th Circuit Court of Appeals, and the U.S. Tax Court. He writes and lectures periodically on law and the remodeling industry.