Attorney General's Opinion

Opinion Number:75-01
Tax Type:Vehicles
Brief Description:Warranty - Kansas Consumer Protection Act
Keywords:
Effective Date:07/23/1998



Body:
State of Kansas
OFFICE OF THE ATTORNEY GENERAL
1st Floor, State Capitol Bldg (913) 296-2215 Topeka, Kansas 66612


July 23, 1975



Mr. Xxxxxxxxxxxxxx
Chief, Dealer Licensing Bureau
State Office Building
Third Floor
Topeka, Kansas 66612

Dear Mr. Xxxxxxxxx:

The overall intent of the Kansas Consumer Protection Act is to equalize the disparity of bargaining position between the businessman and the consumer by providing protection for the unsophisticated consumer. In order to achieve this result, the legislature chose to limit the seller’s or supplier’s ability to avoid liability for the product he sells. Under the Kansas Consumer Protection Act the seller is required to refrain from making representations during the bargaining process which ultimately limit the buyer’s legal rights.

The word “merchantable” as defined by K.S.A. 50-624 means, the goods conform in all material respects to applicable state and federal statutes and regulations establishing standards for quality and safety of goods; and in the case of goods with mechanical, electrical or thermal components, the goods are in good working order and will operate in normal usage for a reasonable period of time.

The implied warranty of merchantability is a relative concept; an old clunker is not expected to hold up like a new car. Therefore a seller is not required to warrant perfection; he is only required to warrant that the car is ordinarily fit for the use to which other cars of the same vintage are put. The new statute merely removes the ability to disclaim this warranty in the print of the sales contract. In summary, disclaimers of implied warranty of merchantability typically take away from the buyer more than the express warranty gives him.

Under the new Kansas Consumer Protection Act, no manufacturer or dealer may disclaim the implied warranty of merchantability given to the consumer by K.S.A. 84-2-314; nor may the printed form limit any remedy otherwise provided by Kansas law, including the right to cancel and to collect consequential damages for a defective product. K.S.A. 1974 Supp. 50-639 (a), as amended by House Bill No. 2010. If the seller after January 1, 1974, uses a form which contains the typical disclaimer language, the disclaimer is void. Its mere presence in the sales contract also triggers a civil penalty, recoverable in an individual action brought by the consumer or by the Attorney General of up to $2,000 with the amount to be set by the court. K.S.A. 1974 Supp. 50-636 (a). If the consumer prevails in an action based on breach of warranty, and a disclaimer has been used in the contract, the court may also award reasonable attorney’s fees against the party “who caused the improper disclaimer to be written”. K.S.A. 1974 Supp. 50-639, as amended by House Bill No. 2010. In light of these substantial penalties, the only advice to give a Kansas dealer is to re-write his sales documents and remove any disclaimer language.

On the other hand, it is clear that a limited express warranty (on top of the implied warranty of merchantability) can continue to be given. For example, a dealer who desires to give a twelve month, or 12,000 mile warranty covering the power train of a used car may continue to do so under the new law. But he would be well advised to designate it clearly as an “expressed warranty” in the brochure or sales contract; and, most importantly, he should eliminate from his forms any language which purports to disclaim the implied warranty. For example, Kansas dealers should delete such phrases as “this warranty is in lieu of all other warranties, express or implied.” This also means that used cars cannot be sold “as is” insofar as that phrase amounts to a disclaimer of the implied warranty of merchantability. K.S.A. 84-2-316 (3) (a).

There is one way in which a seller can disclaim the implied warranty of merchantability: If he can isolate a specific defect or defects in the car and establish that the consumer had knowledge of the specific defect or defects at the time of the sale, and that this knowledge went to the basis of the bargain, responsibility for the defect or defects can be disclaimed. K.S.A. 1974 Supp. 50-639 . For example, if a used car dealer lowers his price on the basis of a faulty transmission, and the consumer is willing to buy on this basis, the car may be sold without any implied warranty covering the transmission. In short, a dealer may not sell used cars “as is”. Any such disclaimer worded in this manner is absolutely unlawful and subjects the seller to substantial damages.

If we can be of further assistance, please contact us.


Yours sincerely,

CURT T. SCHNEIDER
ATTORNEY GENERAL


BY: WILLIAM H. GRIFFIN
Assistant Attorney General
Chief, Consumer Protection Division


WHG: gg


Date Composed: 08/07/1998 Date Modified: 10/09/2001