A dealer warranty is a promise by a seller to repair or replace goods that don’t perform as promised. It can apply to various items, not just cars. A vehicle service contract is different, as it only covers specific repairs. Dealer warranties can be express or implied, and the UCC provides legal protections for consumers.
A dealer warranty is an obligation by the company selling certain goods to repair or replace those goods if they do not perform as promised. A dealer warranty is often associated with the sale of cars. A dealer warranty, however, may apply to other types of items such as mobile homes, motorcycles, computers or other tangible products. In the United States, most states have adopted the Uniform Commercial Code (UCC), which regulates transactions involving the sale of goods and services and provides consumers with certain legal protections. The UCC also regulates and establishes various types of guarantees.
A vehicle service contract is often confused with a dealer warranty. This is likely due to car dealerships selling vehicle service contracts to consumers. A vehicle service contract, however, is a contract that requires the seller to make repairs to a vehicle if specific problems occur with the vehicle. It works like an insurance contract because the seller is only obligated to pay the repair costs. Conversely, a dealer warranty may arise from express or implied promises made by a dealer, and a consumer need not necessarily pay additional costs for such a warranty.
A dealer warranty can be an express warranty, which is created when a dealer or seller promises orally or in writing that a product will perform in a certain way. However, it’s always best to put a dealer warranty in writing. For example, if an auto dealership promises a customer that a truck is capable of towing a certain amount of weight, and the promise causes the buyer to purchase the vehicle, an express warranty is formed. It is not necessary for the dealer to use the terms of warranty or guarantee to give rise to an express guarantee. Also, the dealer need not have the intention to create a warranty. The dealer warranty or express warranty regarding the truck’s ability to carry a specified amount of weight arises from the enforcement of law under the UCC.
This type of warranty may also arise under the UCC under the implied warranty provisions. This occurs when the retailer or seller is aware of a consumer’s specific purpose in purchasing a specific item, and the buyer relies on the retailer’s skill and judgment in the transaction. For example, if a reseller knows that a consumer needs to purchase an item that will perform in a certain way and selects or recommends a specific product, a reseller warranty or implied warranty of fitness will arise. The UCC protects consumers by allowing consumers to cancel a contract to purchase goods that don’t perform as promised. The UCC provides the consumer with some other legal protections.
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