A recent class action claim by consumers and the legal community is targeting a manufacturer and suppliers. The issue in this case is the inadequate disclosure of the manufacturer's warranty. The federal trade commission requires that consumer receive copies of manufacturers warranties during the pre-sale and after-sale with the delivery of the home and products.
The recent class action complaint against the Trex Company alledges the failure to properly communicate the manufacturers' limited warranty to the consumer at the point-of-sale. One aspect of the complaint filed on 1/13/09 against Trex cites "Trex's failure to assure that written warranties be made readily available for examination by prospective buyers violates Magnuson-Moss Warranty Act - 16 C.F.R 702.3. The Trex Company Inc. has responded to the complaint by acknowledging isolated quality issues but has rejected the basis of the complaint.
This case highlights the importance of taking additional steps to protect your business from warranty disclosure claims. For example several production oriented builders organize all their manufacturer's warranties and provide to consumer on a CD-ROM. This is provided in the pre-sale process or at their Design Center prior to contract signing.
Smaller and custom home builders may have more difficulty protecting themselves against warranty disclosure claims since they rely on heavily on vendors to deliver the manufacturers' warranty at pre-sale. Builders should take a careful look at this process to make sure their buyers receive copies of the manufacturer's warranty in the pre-sale and post-sale process.
Also see a new post to this blog regarding a new interpretation by the FTC regarding the acceptability of electronic formats of warranties in lieu of paper copies.
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