Submission Number: 563688-00090
Received: 3/1/2013 6:45:28 PM
Commenter: Daniel Deneen
Organization: Deneen and Deneen
Agency: Federal Trade Commission
Initiative: 16 CFR Part 455 Used Motor Vehicle Trade Regulation Rule; Project No. P087604
Attachments: No Attachments
The New Notice is worse than the old one.
The Rulemakers should recognize that the vehicle contract under the UCC is a combination of the Agreement of the parties, including oral statement and the written document, and other implied terms. See 1-201 of UCC. The oral terms leading to the "Agreement" do not disappear because the dealer has the consumer sign an oppressive written document or a poorly written Buyer's Guide--although ignorant judges might rule that way.
The new Rules and Guide should delineate between Warranties of Future Performance and Warranties of Condition. For the former, the Guide should state something to the effect of:
Dealer denies any liabilities for any repairs to the vehicle after time of sale except under applicable express written warranties (including manufacturer's warranties), extended warranties or service agreements provided or sold with the vehicle, and applicable state or local laws.
As to the Warranties of Condition, the new text couldn't have been written worse. The text is in a pre-printed form that existed prior to when the consumer came on the lot. It states that Dealer did not make any promises. Will Dealer ever cross out that line, and admit it made promises? No dealer will state in court that he didn't make any promises, and consumer even signed this form that said I didn't make any promises.
The text of the new "Implied Warranties Only" section is factually and legally incorrect inappropriate.
Car dealers could use the first line of the new "Implied Warranties" Section to claim that there were no express warranties, when there were express warranties. Consumers would not realize that they were signing a waiver of express warranties provided by the car dealer.
The first line should read:
WARNING: Dealer denies having made any oral representations or other express warranties concerning the condition of the motor vehicle.
The second line is also incorrect and inappropriate. The dealer's liability might be considered limited to only "not apparent" problems, which is not the law. The Dealer must disclose material defects not apparent to a consumer. If even a limited proportion of consumers would not be able to discover a defect "apparent" to a dealer, there is liability. Dealers cannot conceal defects, or otherwise cannot mislead the consumer on the condition of the vehicle. Dealers cannot take any actions that would steer the consumer away from a closer inspection of the vehicle, including false oral assurances about the condition of the vehicle.
The gravamen of the new sticker should be a warning to consumers that dealer will deny in court any claims about the vehicle, and that dealer will only claim responsibility for any repairs as expressly stated in the guide.