Working legally with warranties

Jan. 1, 2020
Most of us of the automotive world are aware of the Magnuson-Moss Act of 1975, though frequently only insofar as it applies to our ability to do repairs and services without impacting a customer's new car warranty.
Photos: Nick M Do

IN THE never ending competition between new car dealers and independent automotive repair shops, most of us of the automotive world are aware of the Magnuson-Moss Act of 1975, though frequently only insofar as it applies to our ability to do repairs and services without impacting a customer's new car warranty. Certainly this is a great place to start a discussion on the legal side and impact of warranties on the tire and automotive repair world, but it only scratches the surface of legal issues that have every potential to impact our ability to do business.

A warranty is our promise, as a seller, to stand behind our products and sold services. It is our commitment to correct problems that occur on products we sell and sold services we provide. Federal law and most state laws recognize two kinds of warranties, implied and express.

Express warranties are not read into your sales contracts by state law as implied warranties are; you explicitly offer these warranties in the course of a sales transaction. They are promises and statements we voluntarily make as sellers about products we sell or commitments we make to remedy defects and expressed consumer complaints. They range from advertising to formal certificates, either verbally or in writing.

In this it is important to note that only written warranties are covered by Magnuson-Moss. "If these brakes ever wear out, I guarantee I am going to feel really bad about it!" Though very important, express warranties offer unfortunate opportunities to get ourselves in trouble. Being specific and equitable is very important to consumer satisfaction and our viability.

Implied warranties are tied to state law and are an unspoken, unwritten promise between our customer and us as a seller. They are based on the common law principle of "fair value for money spent." Further, there are two types of implied warranties. They are the implied warranty of merchantability and the implied warranty of fitness for a particular purpose.

The implied warranty of merchantability is a seller's promise that the items he sells will do the things they are supposed to do, that there is nothing significantly wrong with them and that they are fit to be sold. The warranty laws in most states say that sellers make this promise automatically every time they sell something they are in business to sell.

If you, as a tire retailer, sell a truck tire, you are promising that the tire is serviceable, in good condition and will do the things a customer could reasonably expect a tire to do. That promise is implied but enforceable, without you ever having opened your mouth.

The implied warranty for fitness for a particular purpose is a promise that most state laws say you, as a seller, make when a customer relies on your advice that a product can be used for a specific purpose. An example from the automotive repair world might be in our recommending a heavier weight oil for severe driving conditions. If the oil were to prove unsatisfactory or if engine damage were to result from our recommendation, our implied warranty for fitness for a particular service likely would find us in breach and possibly responsible for any damage to the engine.

Customer Supplied Parts

A common example is installing used parts and customer-supplied parts. I can think of any number of times where a customer pleaded and begged with me to install a used junkyard part or a part that they supplied. I remember reluctantly agreeing, warning the customer that the part would have no warranty and going to the trouble of writing in huge letters all over the receipt that there was no warranty.

State courts have ruled again and again that an automotive repair shop is perceived as expert in its field and that the very instant we agree to install a used or customer supplied part, we are agreeing to accept any liability associated with its failure. I know that in my home state of Maryland and many other states, there also is an issue of parts warranties not being transferrable.

In Maryland, any installed part has to be given a minimum 4,000-mile/90-day warranty, and any repair facility would be on its own if a customer supplied part fails. Those implied warranties are very serious business, with all of the risk and liability that comes with them, including such little gems as responsibility for property damage or bodily injury.

As shop owners and as service managers, we take great pride in the quality of our technicians, always making sure their training is up-to-date and that we have all of the right parts and equipment to repair and service a car to factory standards. This last is important because this would certainly include maintenance service and repairs. We want our customers to be very confident in bringing their new car to us as opposed to the dealer, where they bought the car, with no fear or concern that doing this would somehow affect their new car warranty.

The Magnuson-Moss Act gives consumers the freedom and flexibility to have their cars repaired where they want without fear of the dealer cancelling or voiding their warranty. The "Tie-in Sales Provision" of the act strictly forbids the voiding or modification of any written warranty and as a direct result of this. We are able to encourage customers to bring their new cars to us in complete confidence of the warranty.

Brian Canning is 30-year veteran of the automotive repair industry. He has been a leadership coach, Goodyear service manager, retail sales manager for a distributor, run a large fleet operation and headed a large multi-state sales territory for an independent manufacturer of automotive parts.

Email Brian at [email protected]

Voice Your Opinion!

To join the conversation, and become an exclusive member of Vehicle Service Pros, create an account today!