Are you about to buy a new car, truck, RV or boat? If you see one particular sentence in any of the documents they put in front of you, drop your pen and run.
Some big-ticket-item sellers have begun burying this language, or language similar to it, somewhere in the Purchase Agreement: “Any claim or lawsuit arising out of the purchase or lease of the vehicle against the dealer by the Buyer must be filed no more than 365 days after the date of the delivery of the vehicle.”
Got that? If something goes wrong with what you just bought, you can only sue the dealer within the first year of ownership. A year and a day later? You are out of luck. And this is perfectly legal. The Uniform Commercial Code states that there is normally a 4-year statute of limitations on causes of action arising from the purchase of goods and the clock starts ticking upon delivery. The parties may, by agreement, shorten it to as little as one year. “Agreement” is a funny concept here because this is never a negotiated term and the parties imposing this term will not alter it for you if you ask (hence my advice: “Run.”).
So, you live in Michigan (or one of the many other states that see it this way) and buy a $200,000 RV with a three year warranty. On its first trip you discover that when it rains water pours in around the windshield. You return to the seller and they tell you it will be a while before they can repair it since they are backed up. They have it a few months – common in the industry – and give it back to you. You can’t take it out since the season is over. You park it in storage over the winter. The next spring, on its second trip, water pours in around the windshield. Back to the dealer. It sits for another month before they work on it. You get it back. It still leaks.
The manufacturer says they will work on it at the factory if you drive it there. You do, hoping it doesn’t rain. They have it for a few months which you find annoying BUT the RV has that 3-year factory warranty so you pay little attention to the one-year anniversary which comes and goes. You get the RV back and on the way home you hit a rainstorm. Water pours in around the windshield.
You call the dealer and they tell you they cannot fix it if the factory can’t. And the factory says they’d love to help you. “Bring it back and we’ll work on it again.”
You contact an attorney and bring in all the papers you signed at the dealer and a banker’s box filled with manuals that came with the RV. The attorney notes that you signed the purchase agreement shortening the statute of limitations with the dealer to one year. You cannot sue them. And, buried in the booklets from the factory is one which contains similar language, addressing the manufacturer and its warranty. You cannot sue them outside of the first year of ownership.
You have remaining warranty coverage but no right to demand its enforcement because the statute of limitations lapsed. And yes, RV manufacturers will raise this as a defense and courts will often honor this argument. Some states will interpret this differently – that rendering the remainder of the warranty unenforceable would be inherently unfair to the consumer – but it varies from state to state. In Michigan, I’ve seen judges go by the letter of the law and simply say that the consumer was the one who foolishly agreed to such harsh terms by buying an RV, boat, etc. with that language in the agreement. And it is not a defense that you did not understand or even see the language. In Michigan, and many other states, you are presumed to have read and understood everything you signed. Otherwise, why did you sign it?
So, next time you are buying a big ticket item, flyspeck the purchase agreement for this language and also the warranty booklets (to see if the manufacturer has hidden the language there). If you see the language, ask the seller if they will waive it in writing. If they will not, go find a dealer that does not use it (these days it is more common in the RV industry but it is starting to pop up on automobile purchases as well.) If a manufacturer has it in the warranty booklets, I would strongly urge you to consider another brand. After all, if they stand behind their warranty, why would they want to restrict your ability to enforce it? Even if you are in a state where it is not so harshly interpreted, why would you want to make this part of your “Agreement”?