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STEVE LEHTO has put together a list of Twelve Ways to Break an AS-IS Sale. I receive many inquiries about readers buying used cars AS-IS but have a major failure of the vehicle after the sale.
It's my experience that reputable new car franchise dealers will resolve this matter in the best interest of everyone. However, in cases that this does not happen, this list may provide you some help in deciding if this is a lost cause or not.
TWELVE WAYS TO BREAK AN AS-IS SALES
The Uniform Commercial Code policy DISFAVORS disclaimers. See UCC Comment 1 to 2.313.
- Cannot Disclaim Express Warranties. 2.316. See Fargo Machine & Tool CO v Kearney & Trecker 428 FSupp 364 (ED Mich 1977) What is being sold? A haybaler should bale hay, etc. 2.316(3)(a) suggests that as-is only negates implied warranties.
- To be effective, Disclaimer must be conspicuous. 2.316(2)
Depends on entire circumstances; location (front/back of contract, or other document, etc..); type size and color; surrounding words; timing of Disclosure; See MCPA (445.903 p&t); Latimer v Mueller and Sons Inc. 149 Mich App 620 (1986); Reasonable person standard -- QUESTION OF LAW
- Buyer must have actual knowledge of disclaimer 2.316(3)(a)
- Without the word "Merchantability" the disclaimer if PER SE invalid. 2.316(2); Hensley v Colonial Dodge Inc 69 Mich App 597 (1976).
- Level of Consumers' Understanding ; Comment 7 to 2.316 implies that the terms, without further explanation, are only properly used in a commercial setting.
- Seller's Conduct at time of sale; 2.316 "Unless the circumstances indicate otherwise..." ; Rushed deal, hidden documents, etc...
- Construction of Disclaimer to protect buyer ; Contract construction against drafter; Disclaimers not favored by code; construed narrowly, look for ambiguity; Post Sale conduct: repairs made free of charge in as-is deal, etc..
- Disclaimer cannot be unconscionable; Martin v Joseph Harriso co 767 F2d 296 (6th Cir. 1985, Mi Law) Disclaimer of warranty on seed sold to farmer held unconscionable.
- Lack of good faith. ; 1.203 imposes duty of good faith and fair dealing in contract. Ex: failure to disclose defects, etc..
- No disclaimer of tort, deceptive practices, etc ; 1.103 limits UCC coverage; EX: Concealed fraud.
- Disclaimer only protects drafter ; Seller's disclaimer does not protect manufacturer (See an RD 108)
- Magnuson Moss prohibits disclaimers of Implied warranties during time of express warranty; 15 USC / 2308 ; During term of express warranty or service contract, warrantor cannot disclaim implied warranties.
For more detailed discussion on the topics above you can see Sales of Goods and Services by the National Consumer Law center
OR
Contact STEVE LEHTO to unravel this legal mumbo jumbo.
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