united-states consumer-protection vehicle warranty
How does federal law prohibit the disclaiming of express warranties?
<p>According to the <a href="https://library.nclc.org/cwl/01080201-0" rel="nofollow noreferrer">National Consumer Law Center</a> &quot;[e]xpress warranties cannot be disclaimed&quot; per the Federal Used Car Rule of the FTC. However, the <a href="https://www.ecfr.gov/current/title-16/chapter-I/subchapter-D/part-455" rel="nofollow noreferrer">CFR § 455</a>, <em>et seq.</em>, provisions don’t appear to prohibit this expressly at least.</p>
<p>Common law arguments probably can be made for warranties being unilateral contracts such that require no privity, but I am unsure as to whether the NCLC would refer to common law doctrines “retained by the people” impliedly prohibited the case.</p>
<p>What federal authority provides so?</p>

<h2>Disclaimers may in some cases be effective</h2>
<p>The Federal Magnuson Moss Warranty Act <a href="https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter50&amp;edition=prelim" rel="nofollow noreferrer">15 USC §§ 2301-2312</a> does not, as far as I can see, prohibit disclaimers of express warranties, provided that such disclaimers are prominent.</p>
<p>Under the Uniform Commercial Code (UCC) which serves as state, not federal law, express warranties that form part of the contract may not be disclaimed in the same contract. However, prior express warranties, particularly oral warranties, may be disclaimed, if the disclaimer is prominent in the contract, <strong>and</strong> if the contract is clearly understood by all parties to by the complete final agreement, excluding previous statements not included in the contract. (The UCC is not as explicit on this point as one might wish, see Saunders below.)</p>
<p>In some states such disclaimers may be further limited in consumer transactions by consumer protection laws.</p>
<h2>UCC Provisions</h2>
<p><a href="https://www.law.cornell.edu/ucc/2/2-316" rel="nofollow noreferrer">Section 2-316 of the UCC</a> (adopted as law in all US states, eith minor modifications in a few) sates:</p>
<blockquote>
<p>(1) Words or conduct relevant to the creation of an express warranty and words or conduct tending to negate or limit warranty shall be construed wherever reasonable as consistent with each other; but subject to the provisions of this Article on parol or extrinsic evidence (Section 2-202) <strong>negation or limitation is inoperative to the extent that such construction is unreasonable</strong>.</p>
<p>(2) Subject to subsection (3), to exclude or modify the implied warranty of merchantability or any part of it the language must mention merchantability and in case of a writing must be conspicuous, and to exclude or modify any implied warranty of fitness the exclusion must be by a writing and conspicuous. Language to exclude all implied warranties of fitness is sufficient if it states, for example, that &quot;There are no warranties which extend beyond the description on the face hereof.&quot;</p>
</blockquote>
<p>[Section 2-313] of the UCC states:</p>
<blockquote>
<p>(1) Express warranties by the seller are created as follows:</p>
</blockquote>
<blockquote>
<p>(1)(a) Any affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes part of the basis of the bargain creates an express warranty that the goods shall conform to the affirmation or promise.<br />
(1)(b) Any description of the goods which is made part of the basis of the bargain creates an express warranty that the goods shall conform to the description.<br />
(1)(c) Any sample or model which is made part of the basis of the bargain creates an express warranty that the whole of the goods shall conform to the sample or model.</p>
<p>(2) It is not necessary to the creation of an express warranty that the seller use formal words such as &quot;warrant&quot; or &quot;guarantee&quot; or that he have a specific intention to make a warranty, but an affirmation merely of the value of the goods or a statement purporting to be merely the seller's opinion or commendation of the goods does not create a warranty.</p>
</blockquote>
<p><a href="https://www.law.cornell.edu/ucc/2/2-317" rel="nofollow noreferrer">Section 2-317</a> of the UCC states:</p>
<blockquote>
<p>Warranties whether express or implied shall be construed as consistent with each other and as cumulative, but if such construction is unreasonable the intention of the parties shall determine which warranty is dominant. In ascertaining that intention the following rules apply:</p>
<p>(a) Exact or technical specifications displace an inconsistent sample or model or general language of description.<br />
(b) A sample from an existing bulk displaces inconsistent general language of description.<br />
(c) Express warranties displace inconsistent implied warranties other than an implied warranty of fitness for a particular purpose.</p>
</blockquote>
<h2>Other Sources</h2>
<p>[<em>Footnotes largely omitted; when given, placed in {braces}</em>]</p>
<p>In <a href="https://digitalcommons.pepperdine.edu/jbel/vol9/iss1/3" rel="nofollow noreferrer">&quot;Can You Ever Disclaim an Express Warranty?&quot;</a> by Kurt M. Saunders, published in <em>The Journal of Business, Entrepreneurship &amp; the Law</em>, published by Pepperdine University's Caruso School of Law, volume 9, issue 1, the author writes:</p>
<blockquote>
<p>By making a promise or statement of fact about the goods, or providing a description of the goods that are part of the basis of the bargain of the contract, the seller creates an express warranty that the goods will conform to the description.</p>
<p>...</p>
<p>As can be seen, an express warranty goes to the essence of what the seller has agreed to sell. An express warranty may be oral or written. Unlike implied warranties, which arise automatically and require no particular statement or action by the seller, express warranties result from any
affirmative statement or action on the part of the seller relating to the quality or characteristics of the goods.</p>
<p>...</p>
<p>To better understand how both the buyer and the seller are protected, an analysis of four specific fact situations will be helpful.</p>
<p>The first situation involves an express warranty stated in the written agreement that also contains a general disclaimer, such as “seller disclaims all warranties” or “seller makes no warranties, either express or implied, with respect to these goods.” In this instance, the general disclaimer is inoperative. This result relies on a general rule of contract construction that when there is a conflict between specific and general provisions in the written contract, the specific provisions prevail. ...</p>
<p>The second situation involves an express warranty stated in the written agreement that also contains a specific disclaimer. In this instance, the general rule of contract construction whereby a specific provision of the
agreement prevails over a general provision does not apply because there is a head-to-head meeting of two specific provisions. However, the inclusion in the written agreement of an express warranty and a specific disclaimer cannot be
construed as reasonably consistent with one another. In this case, section 2-316(1) explicitly states “negation or limitation is inoperative to the extent that such construction is unreasonable.” The result in both the first and second situations is the same in that the disclaimer is inoperative. {See <em>Husky Spray Serv., Inc. v. Patzer</em>, 471 N.W.2d 146, 152 (S.D. 1991) (holding that a
disclaimer of which buyer was unaware cannot exclude explicitly bargained-for express warranty).
But see <em>Hayes</em>, 983 P.2d at 1286, where the court gave effect to a specific disclaimer of an express warranty because it was conspicuous in a contract between parties with equal bargaining power and the buyer had ample opportunity to inspect the goods before purchase. See <em>St. Croix Printing Equip., Inc. v. Rockwell Int’l Corp.</em>, 428 N.W.2d 877 (Minn. Ct. App. 1988). }</p>
<p>The third situation involves an express warranty not appearing in a written agreement that contains a specific disclaimer of all oral express warranties. Generally, in a situation such as this, the express warranty is
oral. In this instance, the seller’s specific disclaimer will prevail.</p>
<p>This rationale served as the basis of the court’s holding in <em>Boud v. SDNCO, Inc.</em>, which involved a contract to purchase a luxury yacht. The contract included a disclaimer of any express warranty that might have been created during the negotiation process. When the buyer discovered numerous
mechanical problems with the yacht, he sued to rescind the sale and argued that the disclaimer was not binding. The court, however, ruled that he could not avoid the effect of the parol evidence rule or claim that the parties agreed to
any terms other than those in the written contract. As such, any express warranties were disclaimed.</p>
<p>If an express warranty is contained in the written
agreement, the buyer is provided with maximum protection from the effect of a disclaimer. However, if the express warranty is not contained in the written agreement, the seller is able to obtain maximum protection by complying with the parol evidence provision of the Uniform Commercial Code.45 Even so, it is probable that a disclaimer of an express warranty that is not conspicuous would be regarded as unenforceable.</p>
<p>Although it is possible in limited circumstances to disclaim an express warranty, the effect of such disclaimers may be circumscribed. In <em>Mobile
Housing, Inc. v. Stone</em> 490 S.W.2d 611 (Tex. Ct. App. 1973), for instance, the buyers sought to rescind a contract for the sale to them of a mobile home that did not conform to the purchase agreement or the model shown and demonstrated to them.48 The seller relied on a disclaimer in the contract and the parol evidence rule. However, the court examined the language of the parol evidence rule and concluded that <em>both</em> parties must intend for the writing to be a “final expression of their agreement.” According to the court, since the buyers intended that the mobile home would conform to the model and the description given by the seller, it could not be seriously contended that the written contract was intended to be the final expression of the parties’ agreement.</p>
<p>Where a seller has made oral statements or promises of fact about the goods sufficient to create an express warranty and later disclaimed them in the written contract, the buyer may be able to void the contract on the basis of
fraud and misrepresentation if he relied on those tatements or promises.
... many courts have recognized a fraud exception to the parol evidence rule.{See <em>Associated Hardware Supply Co. v. Big Wheel Distrib. Co.</em>, 355 F.2d 114, 119 (3d Cir. 1965) (explaining that the parol evidence rule does not apply to evidence of prior oral agreements when fraud or mistake is averred); <em>Alling v. Universal Mfg. Corp.</em>, 7 Cal. Rptr. 2d 718, 733–34 (Cal. Ct. App. 1992) (explaining that parol evidence is admissible to show promissory fraud, only if &quot;the false promise is either independent of or consistent with the written instrument&quot;). ...} If the buyer can establish that the seller did not intend to abide by an oral express warranty when it was made, then parol evidence of prior oral promises or representations will be admissible to prove fraud.</p>
</blockquote>
<p>Saunders goes on to discuss situations in which a warranted disclaimer will make a contract unconscionable, and thus the disclaimer may be held unenforceable. He further points out that state consumer protection laws based on the Uniform Trade Practices and Consumer Protection Law or on the Uniform Consumer Sales Practices Act, may treat misleading disclaimers of warantees as unfair trade practices in consumer transactions, citing <em>Ford Motor Co. v. Mayes</em>  575 S.W.2d 480 (Ky. Ct. App. 1978).</p>
<p>The page <a href="https://www.americanbar.org/groups/business_law/safeselling/warranties/" rel="nofollow noreferrer">&quot;Warranties and Online Sales&quot;</a> from the American Bar Association (ABA), after discussing the UCC provisions on express and implied guarantees quoted above, says:</p>
<blockquote>
<p>A seller may not exclude or disclaim an express warranty it has given. And ambiguous language will be interpreted to favor the person who did not draft the contract. A seller can, however, unless a special statute such as a lemon law provides otherwise, totally exclude or disclaim all express warranties (if it has not made an express warranty) by clear and conspicuous language. Statements or other evidence which might create an express warranty may not be admissable to prove the existence of the warranty, if the electronic record properly excludes such evidence.</p>
</blockquote>
<p>However, no authority for this absolute statement is cited by this ABA page. The page later states:</p>
<blockquote>
<p>A number of states have special laws that limit the use of the UCC implied warranty disclaimer rules in consumer sales. Some of these appear in amendments to the UCC and others are in separate statutes. The broadest approach is that of the nine states (Massachusetts, Connecticut, Maine, Vermont, Maryland, the District of Columbia, West Virginia, Kansas, Mississippi, and, with respect to personal injuries only, Alabama) which prohibit the disclaimer of implied warranties in consumer sales. There is a difference in these states whether the rules apply to manufacturers as well as retailers.</p>
</blockquote>
