Warranty Limitations Do Not Always Apply

Cars, appliances, computers, and almost anything else you may buy seem to come with a warranty. Although most people do not think about it, a warranty is only as good as what the warrantor promises to cover. Thanks to a recent decision by the Illinois Supreme Court, warranties in Illinois now cover more than they used to.

The case involved a motor vehicle warranty. The car in question was sold with a remote starter that did not work very well, and it spent a long time in the shop before the problem was finally fixed by installing a different starter. The plaintiff sued, arguing that the car was so useless that the warranty had been breached even though the problem had (eventually) been fixed. The court agreed and awarded the plaintiff $8,500 in damages, an amount that included $3,500 for the plaintiff's inconvenience and loss of use.

The car company appealed and claimed that the award was improper because the warranty specifically provided that it would not cover "loss of time, inconvenience [or] loss of use of the vehicle." Although the supreme court agreed that the warranty contained this limitation, it refused to enforce it because it found the limitation to be unconscionable-that is, too unfair to be enforced. It reached this conclusion for a number of reasons, including the fact that the limitation in the warranty was preprinted and entirely written by the car company, the buyer had no ability to bargain to change the warranty's terms, the limitation benefited only the car company, and (most importantly) the limitation on damages was not shown to the buyer untilafter the car had been delivered.

All of these elements showed that it would be unfair to enforce the limitations of the warranty in this case, and presumably in any other case where a limitation on what is covered by a warranty is not communicated to the consumer before the sale is complete.

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