“Merchantability” is one of those legal terms-of-art that defies precise definition. Courts ruling on implied warranty of merchantability claims generally frame the question as whether the product was “reasonably fit for its intended purpose.” But what any given jury will find to be “reasonable” is anyone’s guess. So better for the defendant that the case never get to the jury. I think Chrysler might agree. Continue reading
Category Archives: Statutes & Regulations
Commenting on An Orwellian approach to legal writing, 3 readers share insights and experiences recommending plain language. Here’s a sampling of what they have to say:
“My crime briefs ‘read like a thriller,’” says Bapoo M. Malcolm, Advocate, Bombay High Court, India.
“Practice has shown that people appreciate simplicity & clarity in comprehension compared to more technical writing (jargons & all),” observes Janice Isu, Acting Principal Legal Officer, Office of the State Solicitor, Dept. of Justice & Attorney General, Papua New Guinea.
“A company can’t hide behind fine print written in legalese. Judges rule for the average person,” declares Paul Eveleigh, a copywriter from Melbourne, Australia.
There’s more. Continue reading
It is quickly moving beyond dispute that federal consumer protection law favors binding arbitration over litigation. A North Carolina federal trial court recently joined two federal appellate courts in ruling that the federal warranty law, the Magnuson-Moss Warranty Act, does not ban binding arbitration provisions in consumer product warranties. This is good news for consumer product manufacturers, and better news for consumers if more companies turn to binding arbitration.
The Global Warranty and Service Contract Association (“GWSCA”) (www.gwsca.org) is now developing the agenda for our first annual conference, to be held in Chicago, the week of October 6, 2014. Continue reading
On January 17, 2014, Governor Chris Christie signed NJ Senate Bill 854 into law. The new law, C.56:12-87, goes into effect July 16, 2014 (180 days after enactment). Things you should know about New Jersey’s new service contract law:
- The law takes many of its provisions straight from the Model Act, and is consistent with the national trend in service contract legislation.
- The statute exempts service contracts from regulation under New Jersey’s insurance laws.
- New Jersey’s law covers all agreements that fall within its definition of “service contract,” without regard to class of product covered. (Some states regulate only agreements covering specific product types or categories, such as electronic devices, motor vehicles, appliances, etc.)
- Service contract companies must demonstrate financial responsibility in one of three ways: obtain contract liability reimbursement insurance, establish a funded reserve, or show company net worth of at least $100,000,000.
- Service contracts must include provisions explaining the consumer’s and the contractor’s cancellation rights, cancellation procedures, and refund policies.
- Service contracts must be written in clear and understandable language.
- A violation of the new law constitutes an unlawful practice under New Jersey’s consumer fraud act.
More information about service contract regulation, including the new New Jersey law, may be obtained from the author or another member of the Segal McCambridge Warranty and Service Contract Group.
In a recent post, we commented on Hyundai’s decision to abandon the arbitration clause in its new vehicle limited warranty. A reader pointed out that, generally, in consumer-dispute arbitration only the warrantor is bound by the award. The reader is correct that where a consumer protection statute or lemon law includes a state-run mandatory arbitration procedure, it generally permits a consumer dissatisfied with an award to reject it and proceed to litigation.
A recent “victory” for the New York Times strikes a blow to consumers. By bullying Hyundai into abandoning arbitration to resolve warranty disputes, it robbed consumers of a fair and efficient alternative to costly, time-consuming, and economically inefficient litigation. Continue reading