New-to-you fridge starts leaking? Just-bought washing machine makes a weird squeaking noise instead of turning on? Oven turns on the first time you use it, then won't turn off for love or money?
If you live in Texas, the lemon law for appliances may offer the protection you need to get a refund or replacement. But there's no point in moving to the Lone Star State in order to have a legal weapon against frustrating appliances. While the Texas "lemon law for refrigerators" provides help from an all-too-early appliance breakdown, don't give the state too much credit. The law is hardly unique to Texas, since it is a federal law and applies with equal force in every one of the 50 states.
Texas Lemon Law Definition
What is the lemon law in the state of Texas? A lemon law is any law that allows a buyer to return a product that doesn't function as it is supposed to function. A lemon law for appliances protects consumers who buy defective appliances.
Some particular lemon laws for appliances, like that used in the state of Texas, apply only when you buy an appliance with a warranty. It only offers protection when a seller or manufacturer doesn't live up to the warranty and correct the defect. The lemon law mandates a complete refund or replacement. Pretty cool if you are in the frustrating circumstance of having purchased an appliance that just doesn't work right.
But Texas really has no claim to fame for having a lemon law for appliances. The true name of the law is the Magnuson-Moss Warranty Act, and if you want to call it something else, try the federal lemon law. Some states, such as forward-looking California, have enacted their own laws that protect consumers in their state. For example, California's Song-Beverly Consumer Warranty Act protects Californians who buy a new product for their own use. It could be anything purchased for personal use, from an automobile to a microwave oven. But in Texas, the only lemon law for appliances is the federal lemon law.
Read More: Lemon Law for Refrigerators
Texas Lemon Law for Cars
Just to keep things clear, Texas does in fact have a state law called the Texas Lemon Law. This doesn't help you with a leaking dishwasher, but may provide relief when the hot rod you bought last week won't turn over this morning. The Texas Lemon Law applies only to motor vehicles and only to new ones. If you buy or lease a new car in Texas and haven't been able to get defects repaired, this law can be useful.
The Texas Car Lemon Law (for vehicles) was enacted in 1983. It was challenged in court, was upheld two years later and continues to be in effect today. It is administered by the Texas Department of Transportation’s Motor Vehicle Division and its Motor Vehicle Board. The procedure to take advantage of it is somewhat lengthy but can be cheaper than hiring a lawyer and suing. Its protection was expanded to cover more costs than the manufacturer must cover and to require a disclosure to the buyer of a vehicle in Texas. This is not a lemon law in Texas for used cars. It covers only new vehicles; however, it does cover both leased and purchased vehicles.
But, the Texas Car Lemon Law doesn't cover appliances at all. A consumer with issues about a newly purchased appliance must rely on the protections of the Magnuson-Moss Warranty Act.
What is the Magnuson-Moss Warranty Act
In 1975, Congress passed the Magnuson-Moss Warranty Act. The law gives consumers additional protections when they purchase appliances – or any other product costing over $25 – that come with a warranty. What is a warranty? A warranty is a legal guarantee that the appliance works appropriately and properly. The Magnuson-Moss Act requires that, when a business issues this type of guarantee and provides it to the consumer who buys a product, the business has to be held to the promises it made. It provides that the business must pay for any required repairs, and also requires refunds or replacements after repair attempts don't work.
What type of warranty is required before the protections of the Magnuson-Moss Act kicks in? The warranty must be in writing. The Magnuson-Moss Act won't help enforce any promises a seller makes verbally, which makes sense given the "he-said-she-said" nature of oral misrepresentations. The Act permits a seller to require that you set up a resolution process before going to court, often a mediation or arbitration procedure between the parties. If that informal process doesn't lead to a resolution, you can sue under the Act.
Note that the Magnuson-Moss Act doesn't require a seller to give a warranty in the first place. It doesn't mandate that a manufacturer give written guarantees or promises, but its protections snap into place once a written warranty is issued. Note that the Act doesn't cover warranties on service contracts but only on goods, although if your warranty covers both, it will do just fine. And only the types of products usually sold as personal-use consumer products are covered. The Act doesn't apply to warranties on products typically produced and sold for commercial purposes.
Purposes of Magnuson-Moss
The Magnuson-Moss Act is not just a law giving consumers a right to sue. Its purposes were very different and somewhat loftier.
The Act was intended to inform consumers of their rights as much as to arm them to defend those rights. It mandates that those who manufacture and sell consumer products must give the people who buy those products complete and specific information about warranty coverage. Congress felt that by giving people a chance to understand warranty terms before buying something, the federal lemon law could provide a map showing the way you can move from problem to solution when something goes wrong.
The notice requirements of the Magnuson-Moss Act also allow you to compare warranties while you are comparing appliances. You look over a refrigerator carefully before buying, comparing its power and design to others, as well as prices, before making a selection. With this Act, you can also compare warranty coverage and terms before buying and find a guarantee that suits you. This comparison-shopping for warranties was also intended to make businesses more competitive when it comes to designing warranties. Once the companies realize that consumers are able to take a close look at the terms of a warranty before buying and that this can impact their choices, sellers can be expected to offer more and better protection.
But obviously, even these steps do not ensure that companies and manufacturers will do what they have promised. That's why Congress wanted to put teeth into the Act by providing legal rights to go to court. The fact that consumers can pursue a breach-of-warranty claim in a streamlined fashion gives the companies and manufacturers more reasons to perform warranty obligations promptly and thoroughly.
What Does the Act Require and Forbid?
The Magnuson-Moss Act sets up three requirements with which the manufacturer or seller or whomever is offering the warranty must comply. These are important to understand for both warrantor and consumer. The warrantor has to provide both an overview of the warranty coverage and certain details of the warranty term in one, clear document. Simple, easy-to-read information is the key. The document must state up front whether the warranty is full or limited, and, if limited, must set out the limits. Finally, the seller has to be sure to have the warranties on site and available where the products are sold. That ensures that the buyer can read the warranty info and compare warranties before buying.
On the other hand, the Magnuson-Moss Act tells businesses and manufacturers that they cannot do certain things or use certain terms that tend to mislead consumers in their warranties. They are: disclaiming implied warranties, "tie-in-sales" provisions and deceptive warranty terms.
What do these mean? Prohibiting disclaiming implied warranties means you can't use language in a warranty to get rid of the basic protection of the implied warranty of merchantability. Every product one buys, even without a warranty, includes an implied warranty of merchantability. This is an unwritten but enforceable promise that the goods sold will do what they are supposed to do, i.e., that there is nothing wrong with them that will prevent that use. So nothing in the written warranty can limit this implied warranty if the warranty is a full warranty. If a seller specifies that the warranty is limited, the written warranty can limit the time the implied warranties last.
Tie-in sales provisions require a consumer to buy other specified products or services in order to make the warranty valid. For example, the seller cannot say that an XYZ coffee machine warranty is void unless you always use XYZ coffee filters. These are prohibited unless the manufacturer can prove that the product works only with the specified filter.
The fact that deceptive warranty terms are prohibited is pretty easy to understand. If the warranty seems to be a warranty but actually, due to misleading terms, isn't a warranty at all, it is a violation of the law.
Rights the Magnuson-Moss Act Gives Consumers
The "teeth" of the Magnuson-Moss Warranty Act are the provisions of the law that give consumers rights to pursue unresolved warranty problems in court. Since the Act makes breach of warranty a federal law, consumers in every state can sue under it and get a refund or a replacement product.
Even better, people who are successful in court can also recover both court costs and attorney fees. A seller or manufacturer who is sued for breach of a written warranty and loses can be ordered to pay all of the buyer's legal fees. This means that a consumer with a good claim won't have any trouble finding an attorney to take her case.
How about class actions? Yes, you can bring Magnuson-Moss class-action lawsuits (representing a lot of consumers with the same issue) in federal courts. Individual claims can be (and usually are) brought in state court.
The Magnuson-Moss Act also nudges sellers to set up dispute resolution mechanisms, which mean easier, cheaper and less formal ways to resolve the disputes before they get to court. The very fact of permitting a consumer to be reimbursed for attorney fees acts as a huge incentive for a company to use informal dispute resolution mechanisms and to find settlements with their customers. Often these mechanisms involve mediation or arbitration run by an impartial third party, such as the Better Business Bureau.
Under the Act, the terms of the warranty can mandate that consumers use these informal dispute mechanisms before going to court. If you are a consumer with a warranty issue, read your warranty. If it includes this informal-dispute-requirement, you have to go through the informal dispute settlement procedures before you go to court. If there is no such procedure set up in the warranty, you can find an attorney and file a lawsuit without trying alternative dispute resolution methods. But it will take longer and involve more stress than informal proceedings.