investigate in detail a legal issue faced by a particular industry or profession

students will take the opportunity to investigate in detail a legal issue faced by a particular industry or profession. For these purposes, a research project should entail the use of only primary and secondary legal sources. Good papers should be well written, well researched and well documented. Under most circumstances, the paper should follow the structural template that has been provided. It is suggested that you discuss the topic with the instructor, begin early in the term, and organize your approach. The instructor is also happy to review and comment upon outlines and early drafts on a no-grade basis, if such is delivered on a timely basis. However, the assumption that students can manage their time over the term is being made. Papers should be 4-5 pages in length.

I choose this topic ( The Unconscionability Under the U.C.C.) to do the paper,

A good example of how to write the assignment from old student provided by the professor + outline for the assignment

a guideness paper is on the atttachment

Not single space, 1.15 space

Warranty Protection under Magnuson-Moss
Warranty Act
Introduction
When purchasing certain goods, people are entitled to protection under federal and
state laws. The main warranty regulations are the Uniform Commercial Code and the
“Magnussen-Moss Warranty Act.” These laws help solve the problem of unfair or
misleading application of disclaimers on warranty clauses by manufacturers and
facilitate informal dispute resolution.
The Uniform Commercial Code defines a warranty as a promise or affirmation made
by the seller to the buyer of goods that is relied on by the buyer in making a decision
to buy a product, and so becomes part of the sales contract between the buyer and
seller. Warranties can be either express or implied, and can be written or oral.
Enacted in 1975, the Magnussen-Moss Warranty Act is a federal law governing
consumer product warranty. The Act doesn’t require all goods to have a warranty,
which means the goods can be sold “as is”. However, if there is a written warranty,
the Act requires sellers of goods to, fully and conspicuously, in simple and readily
understood language, disclose and describe the terms and conditions of any written
warranties provided to consumers. In addition, it only applies to products and not to
warranties on services and only covers warranties for consumer products.
According to Magnussen-Moss Warranty Act, a written warranty is a “full” or “limited”
or multiple (part full and part limited) warranty. A full warranty gives the consumer
the right to free repair a defective product or replacement if multiple repair attempts
have failed. A limited warranty must be “conspicuously designated”, and it might
restrict the availability of free repair or replacement. Most consumer product
warranties are limited warranties. The Act prohibits anyone who provides a written
warranty from disclaiming or modifying implied warranties. Therefore, as a consumer,
you will always receive the basic protection of the implied warranty of merchantability.
Under the Magnussen-Moss Warranty Act, the ambiguous statements in the warranty
terms will be interpreted in a disadvantageous direction to the maker of the warranty.
Additionally, the Act doesn’t allow tie-in sales, which means that the warrantor can’t
require purchasers of a warranted product to buy particular items or services from
specified companies to use with the warranty products in order to qualify for the
benefits of the warranty. Moreover, it is prohibited to include deceptive or misleading
terms in the warranty terms.
The Magnussen-Moss Warranty Act make it easier for consumers to seek remedies for
breaches of warranty in court. A consumer who has been injured by a supplier’s
noncompliance may file a lawsuit in federal court if the amount in controversy is over
$50,000, which is a lower requirement than for typical federal jurisdiction. If the
number of plaintiffs exceeds 100, a class action can be taken. Otherwise, the lawsuit
may be brought only in state court. Furthermore, it also allows prevailing consumers
to recover reasonable costs of suit, such as court costs, expenses, and attorneys’ fees.
Most importantly, the Act will not invalidate or restrict any rights or remedies that
consumers obtain under any other federal law or state law.
The Magnussen-Moss Warranty Act’s definition of “consumer” is broken down into
three categories:
(1) a buyer (other than for purposes of resale) of any consumer product,
(2) any person to whom such product is transferred during the duration of an implied
or written warranty (or service contract) applicable to the product, or
(3) any other person who is entitled by the terms of such warranty (or service contract)
or under applicable State law to enforce against the warrantor (or service contractor)
the obligations of the warranty (or service contract).
Can a lessee become a “consumer” under the Magnussen-Moss Warranty Act? Does
the Magnussen-Moss Warranty Act apply to the warranty problem that arises from
leasing? We will explore this issue through the following three cases.
Case 1: DiCintio v. Daimler Chrysler Corp., 97 N.Y.2d 463, 742 N.Y.S.2d 182, 768
N.E.2d 1121 (2002)
Facts:
In June 1999, DiCintio leased from Adzam Auto Sales, Inc. a 1999 Jeep Grand Cherokee
Laredo sport utility vehicle manufactured by DaimlerChrysler Corporation. The lease
recited that Adzam would assign the lease to the “Holder,” Chrysler Financial
Company L. L. C., and required DiCintio to insure the vehicle for the Holder’s benefit.
Title did not pass to DiCintio, but DiCintio had the option to purchase the vehicle if he
paid a certain amount at the close of the 36-month lease period. DiCintio began to
experience problems with the vehicle after he accepted delivery. DiCintio took the
vehicle to authorized dealers for repairs on six or seven occasions, but the defects
persisted. In October 1999, DiCintio informed Adzam that he wished to terminate the
lease or be given another car; Adzam declined. DiCintio then notified Daimler-Chrysler
— but not Adzam — that he was revoking acceptance of the vehicle.
When DaimlerChrysler refused this revocation, DiCintio commenced the present
action. His first cause of action, seeking damages, alleges breach of written warranty
by Daimler-Chrysler under the Warranty Act. Additional causes of action against both
DaimlerChrysler and Adzam allege breaches of implied warranties under the Warranty
Act and “improper delivery” under the UCC, and seek revocation of acceptance, costs
and attorneys’ fees.
Defendants moved to dismiss the complaint. Holding that the Warranty Act applied to
DiCintio’s lease, Supreme Court denied the motion as to his first cause of action but
dismissed the breach of implied warranty claims against DaimlerChrysler, the claim
for revocation under the Warranty Act and the cause of action for “improper delivery”
under the UCC. On appeal, the Appellate Division affirmed Supreme Court’s holding
that the Warranty Act applied to DiCintio’s lease, but modified Supreme Court’s order
by reinstating the breach of implied warranty claims against DaimlerChrysler and the
claim for revocation against both defendants. On the motion of Daimler-Chrysler and
Adzam, the Appellate Division also certified the appeal for review by this Court.
Holding:
The court reasoned that the Magnuson-Moss Act is designed to protect buyers of
products and that by leasing a vehicle, a party takes on fewer obligations and gets
fewer rights in return. DiCintio is not a consumer by virtue of being a buyer, or by
virtue of being either a transferee during the duration of a written warranty issued in
connection with a sale or any other person entitled to enforce such a written warranty.
Besides, Adzam probably does not count Daimler-Chrysler’s limited warranties as part
of the basis of the bargain when and if it becomes the vehicle’s owner for the purpose
of conveying the vehicle to a retail customer, so DiCintio isn’t a catagory consumer
under the Warranty Act. DiCintio’s transaction with Adzam was a lease rather than a
sale, and there is no other relevant sale, there is no written warrant or implied warrant
under the Warranty Act since the warranty must arise in connection with a sale.
Therefore, he can find no relief in the substantive sections of the Warranty Act.
The court insisted that the order of the Appellate Division, insofar as appealed from,
should be reversed, with costs, the first three causes of action in the complaint
dismissed, and the certified question answered in the negative.
Case 2: Cohen v. AM General Corp., 264 F. Supp. 2d 616 (2003)
Facts:
On July 6, 1999, plaintiffs Mark Cohen and First Choice Medical arranged to lease a
new 1999 American General Hummer (Hummer) from Naperville Hummer Jeep for a
total lease price of $84,000. In order to facilitate this transaction Mister Leasing
Corporation (MLC) purchased the Hummer. Plaintiffs had the option to purchase the
vehicle at the conclusion of the lease period. A1 Jordan, the vice-president of MLC,
maintains that the purchase of the Hummer was for the purpose of leasing it to
plaintiffs and that without such a plan MLC would not have purchased the vehicle.
MLC transferred its rights in American General’s factory warranty to the plaintiffs.
Plaintiffs allegedly experienced numerous problems with the Hummer. Pursuant to
the warranty, plaintiffs tendered the vehicle to authorized dealers of Hummers, who
serviced the vehicle at no cost to plaintiffs. Plaintiffs filed their complaint in the Circuit
Court of Cook County on June 5, 2002, alleging breach of the warranty and revoking
acceptance of the vehicle. On July 11, 2002, plaintiffs chose to trade in the vehicle,
receiving $49,000 for the Hummer.
Defendants filed a motion for summary judgment, arguing that plaintiffs are not
entitled to enforce the terms of the warranty pursuant to the Magnuson-Moss Act and
that they cannot prove any damages because they were able to trade in the vehicle
for its fair market value.
Holding:
As part of the lease transaction MLC transfer all warranty rights to lessees, the lessees
become entitled to enforce the warranty against the warrantor and therefore become
“consumers.”. Although other courts have other interpretations of the MagnussenMoss Warranty Act, but in the situation where the sale of a vehicle is merely to
facilitate a lease, the issuance of the warranty accompanies this sale, and the lessor
explicitly transfers its rights in the warranty to the lessee — the lessee is protected by
the Magnuson-Moss Act. Because the court concludes that plaintiffs can enforce the
terms of the written warranty, they may also seek to enforce an implied warranty.
However, following the sale of the vehicle it appeared that the plaintiff had no losses,
so she could not allege damages with enough specificity to survive a summary
judgement motion.
The judgement for defendant’s motion for summary judgement was denied for the
foregoing reasons.
Case 3: O’Connor v. BMW of North America, LLC, 905 So. 2d 235 (2005)
Facts:
In March 2001, O’Connor visited a BMW dealership and decided to lease a new 2001
BMW X5. The BMW dealership sold the vehicle to a financial institution, BMW
Financial Services, which in turn immediately leased the vehicle to O’Connor. The lease
agreement states that the vehicle is subject to the standard manufacturer’s warranty.
Shortly after O’Connor took possession of the vehicle, she began to experience
problems with the vehicle. Pursuant to the warranty, O’Connor took the car to an
authorized BMW dealership for repair on numerous occasions. At no time did BMW
assert that the vehicle was not covered by the written warranty. BMW’s attempts to
repair the vehicle were unsuccessful and O’Connor eventually attempted to revoke
her acceptance of it. However, BMW refused to take the vehicle back, and O’Connor
thereafter brought suit under the Magnuson-Moss Act.
Jennifer O’Connor appeals an order granting summary judgment and final judgment
in favor of BMW of North America (“BMW”) on her claim for breach of written
warranty under the Magnuson-Moss Warranty. O’Connor argues that the trial court
erred in finding that the Magnuson-Moss Act did not apply to her transaction because
she leased, rather than purchased, the vehicle.
Holding:
The court reverse the order granting summary judgment and the final judgment in
favor of BMW and remand for further proceedings consistent with this opinion. A
person need only meet one of the three criteria to qualify as a consumer. The court
asserts that O’Connor is a category two consumer because the BMW was
transferred to her during the duration of the written warranty. By its own terms,
the automobile was in service and the warranty had begun when the vehicle was
transferred to O’Connor. Further, the written warranty was made “in connection
with the sale” of the vehicle from the dealer to the leasing company. O’Connor
qualifies as a category three consumer because she is entitled, both by the terms
of the warranty and under applicable state law, to enforce the manufacturer’s
warranty. Therefore, the Magnuson-Moss Act applies to O’Connor’s lease
transaction, and the trial court erred in entering summary judgment in favor of
BMW.
The judgement of O’Conner was reversed and remanded; conflict certified.
Conclusions
As far as I am concerned, firstly, I didn’t think that a lease can be protected under the
Magnussen-Moss Warranty Act, since it doesn’t not specify whether a lease will be
protected. The first case verified my point of view and the court do said because lease
is not a sale, the Act are not able to be applied to a lease transaction where there was
no other relevant sale. However, the second case surprised me. Some courts insisted
that as long as the lease transaction transfer all warranty rights to lessees, the lessees
can become a category two consumer and are able to enforce the warranty against
the warrantor. In addition, the third case explained that the lessees not only can be a
category two consumer, but also can be a category three consumer as long as the
lessees are entitled both by the terms of the warranty and under applicable state law
to enforce the manufacturer’s warranty. Therefore, the Magnussen-Moss Warranty
Act does not require a sale to an ultimate consumer, which means that a lessee can
also be protected under the Act.
Although different courts may have different interpretation about whether a leasing
can be protected by the Magnuson-Moss Warranty Act, managers should pay
attention to the written and implied warranty terms when leasing goods to customers.
For example, Managers can put as less written warranties on the goods as possible,
and try to disclaim the implied warranties such as using the words “as is” or “with all
faults”, and give a conspicuous notice to customers. Additionally, if the managers sells
products from a product manufacturer with a written warranty, they can disclaim the
implied warranty by not providing their own written warranty. But they need to give
consumers copies of any written warranties from the product manufacturer.
Consequently, In order to avoid dispute on warranties, managers had better treat
leasing goods as selling goods and make disclaimers as possible.
The Business Law Paper Plan
Introduction
–
What the law is
What don’t we know?
Case 1
–
Facts
Holding
Case 2
–
Facts
Holding
Case 3
–
Facts
Holding
Conclusions
1.) How do these cases help incorporate the legal ambiguity posted at the start?
2.) Practical advice for managers.