wales@ucla-cs.UUCP (05/18/85)
This is a question on the exclusion of liability for incidental and/or
consequential damages in warranties.
A handful of U.S. states (I don't remember them off the top of my head;
Consumer Reports published a list in an article a few months ago; Cali-
fornia, where I live, is NOT one of them) have laws prohibiting any
exclusion of liability for incidental/consequential damages in a product
warranty. I don't know what the situation is in Canada regarding such
exclusions -- though since I know there are several "net.legal" readers
in Canada, I'm sure someone will enlighten me! :-}
Anyway . . .
Consider the warranty on my car's alarm system. It contains the follow-
ing provisions:
(1) A sweeping disclaimer of liability for incidental/consequential dam-
ages -- with the usual note that since some states do not allow such
exclusion of liability, this provision "may not apply to you". (Of
course, it DOES apply to ME, since I live in California.)
(2) A specific insistence that the alarm system is only a deterrent to
theft, and that no guarantee or insurance is provided against theft
of the car.
(3) A requirement that the warranty against defects in the alarm system
is completely null and void unless the system was installed by a
professional alarm installer.
I have two questions -- somewhat interconnected, and both (fortunately)
strictly hypothetical:
(1) Suppose I lived in one of the seven or eight states which ban the
exclusion of incidental/consequential damages, and my car (with said
alarm system installed) were stolen.
Would the warranty's disclaimer of guarantee/insurance against the
theft of my car -- point #2 above -- be rejected as an impermissible
attempt to exclude liability for consequential damages?
(2) The requirement that the system be installed by a pro in order for
defects in the alarm unit to be covered by the warranty seems very
strange to me. It has been pointed out (and rightly so) that a car
alarm system is of little value in protecting your car unless it is
installed by a competent technician -- but since the warranty al-
ready specifically excludes coverage for theft of the car anyway,
this doesn't seem to be a relevant concern.
Is the real explanation, perhaps, that the alarm company has no way
of protecting itself against damage claims if a car was stolen in a
state prohibiting the exclusion of consequential damages, and that
they are therefore taking the next best step of demanding profes-
sional installation -- so that they will at least know that the sys-
tem was put in right and will thus PROBABLY prevent the theft of the
car?
Any ideas on the above two questions would be most welcome -- especially
if backed up by "cites" to statute or case law, but even if not.
--
Rich Wales // UCLA Computer Science Department // +1 213-825-5683
3531 Boelter Hall // Los Angeles, California 90024 // USA
ARPA: wales@UCLA-LOCUS.ARPA -or- wales@LOCUS.UCLA.EDU
UUCP: ...!(ihnp4,ucbvax)!ucla-cs!walesMichael@tekecs.UUCP (05/22/85)
> From: wales@ucla-cs.UUCP > I have two questions -- somewhat interconnected, and both (fortunately) > strictly hypothetical: > > (1) Suppose I lived in one of the seven or eight states which ban the > exclusion of incidental/consequential damages, and my car (with said > alarm system installed) were stolen. > > Would the warranty's disclaimer of guarantee/insurance against the > theft of my car -- point #2 above -- be rejected as an impermissible > attempt to exclude liability for consequential damages? > It may be rejected, but that does not mean you will prevail. In Products Liability there are three theories of recovery currently in vogue: (1) negligence, (2) warranty, and (3) strict liability. Since the question pertains to warranty liability I'll discuss only that. However, it should be pointed out that in states which permit limitations/exclusions on warranties, the fact a warranty is expressly limited does not preclude recovery based upon theories (1) or (3). Recovery based upon the warranty theory lies at the intersection of "Tort" and "Contract" law. It is, consequently, not clearly one or the other, but shares certain characteristics of both. Where exclusions/limitations on warranties are prohibited the limitations/exclusions may be supplied by the legislature in the form of statutes or by the courts in the form of case law. All of the 50 states except Louisianna have adopted, in general form, the Uniform Commercial Code (UCC) which has several sections which deal directly with the problem of disclaimers. Section 2-719 (3) states: "Consequential damages may be limited or excluded unless the limitation or exclusion is unconscionable. Limitation of consequential damages for injury to the person in the case of consumer goods is prima facie unconscionable but limitation of damages where the loss is commercial is not." Other sections of the UCC of interest are 2-302 and 2-316. California passed a separate Consumer Warranties Act, Cal.Civ.Code Tit. 1.7, secs. 1790-1797.5. The fact that a states laws prohibit certain limitations/exclusions (or the fact that a seller failed to make them) does not mean that a seller is therefore liable for whatever happens with the product. What the prohibition against exclusions/limitations means is that the state wants the question "what is warranteed?" to remain open to judical decision. What the consumer gains through this is not necessarily a recovery, but the right to be heard on the facts of a particular case. Without the prohibition, in a lawsuit the defendant need only move for summary judgement based upon the pleadings or upon the fact that the plaintiff has failed to state a claim upon which relief may be granted. My knowledge of Products Liability law was never very deep, but it shouldn't be very hard for anyone to bone up on. A few references which might be useful to that end are: Prosser, Wade, Schwartz, "Torts - Cases and Materials", 7th Ed., chapter XV. R. Hursh and Bailey, "American Law of Products Liability", (1974). L. Frumer and Friedman, "Products Liability", (Rev. ed. 1974). Commerce Clearing House (CCH) Products Liability Reporter. >(2) The requirement that the system be installed by a pro in order for > defects in the alarm unit to be covered by the warranty seems very > strange to me. It has been pointed out (and rightly so) that a car > alarm system is of little value in protecting your car unless it is > installed by a competent technician -- but since the warranty al- > ready specifically excludes coverage for theft of the car anyway, > this doesn't seem to be a relevant concern. > > Is the real explanation, perhaps, that the alarm company has no way > of protecting itself against damage claims if a car was stolen in a > state prohibiting the exclusion of consequential damages, and that > they are therefore taking the next best step of demanding profes- > sional installation -- so that they will at least know that the sys- > tem was put in right and will thus PROBABLY prevent the theft of the > car? Your explanation sounds reasonable to me. It may perhaps be extending the coverage to theft of items on/in your auto and injury to someone because of improper installation of the unit as well. Mike IsBell ..!tektronix!tekecs!mikei Tektronix, Inc. Wilsonville Industrial Park P.O. Box 1000 Wilsonville, Oregon 97070 (503) 685-2990 (The preceding opinion is that of a laymen and consequently should not be relied upon for anything other than passing the time of day. The author makes no warranties either express or implied (except where prohibited by law (-: ).
dee@cca.UUCP (Donald Eastlake) (05/28/85)
I would have thought they wanted profession installation because then
they could always try suing the installer or making the installer part
of the suit if they were sued.
--
+1 617-492-8860 Donald E. Eastlake, III
ARPA: dee@CCA-UNIX usenet: {decvax,linus}!cca!dee