How to Unload a LemonIf you’re stuck with a defective product, you’ve got the law on your side. Here are power plays you can use to get full satisfaction or your money back – with a minimum of hassle!
By John M. Striker and
Andrew O. Shapiro
You just
bought a brand new space age food processor from Foodglow, Inc. You unpack it, put all the pieces together
and turn it on. You drop in a carrot – and instead of grinding it up, the
machine grinds to a halt. About all your food processor can process is a marshmallow.
You take the machine back to Foodglow. They try to
fix it. But the repairs just can’t get the machine to operate properly. What
you have is a lemon.
Indeed, one of the best selling consumer products on the
market today is the lemon. The seller may call it a food processor, a camera, a
car, a vacuum cleaner, or anything else. But you know it’s a lemon. And being
stuck with one can cause you a lot of aggravation. The problem is that no one
wants a lemon. And that includes the store that sold it to you. They don’t want
it back. They have your money and would prefer to keep it. Our goal, therefore,
is to use a power play to get you full satisfaction or your money back.
In order to determine your rights, we must separate all
consumer products into two categories. In the first category are all products
sold without promise by the seller to do anything if the product turns out to
be defective. Products sold “as is” fall into this category. In general,
only used or heavily discounted sale items are sold “as is.” If you buy one,
you can expect to have no remedy if it goes kaput. No power play is going to
help you.
The second category includes 99 percent of all products
sold, and carries a promise that the product you purchased will work. Sometimes
this promise is spelled out in a warranty. Sometimes it is not written out at
all. But under the law of all states except
To insure that such promises are kept, every state with the
exception of
When you buy a product, pay for it, and carry it home or
take delivery of it, you have legally accepted the product. When you discover
that the product is defective, you will want to send it back to the people you
bought it from – that is, reject it. In the law, this is called “revoking
your acceptance.” Revocation is simply canceling your prior acceptance of
the product. And once you have rejected the product, you can legally demand
your money back.
When can you revoke the acceptance of a product? The code tells
us that revocation is proper if the defect in the product you bought “substantially
impairs its value” to you.
Your common sense will tell you whether your purchase is
“substantially impaired.” Minor defects such as a scratch, for example, are not
considered substantial. What we are talking about is the mixer that can’t mix,
the television set that can’t receive a channel or two, the toaster that won’t
pop up the toast, and so on. In short, if the defect prevents the product from
doing what it’s supposed to do, then it is “substantially impaired.”
If you purchase a product that is substantially impaired,
the law requires that you try to get it fixed. Under most warranties, repairs
and replacements of defective parts are provided. And, if you have no warranty,
you still must give the seller a chance to correct the problem.
How many chances does the repairman get before you can
revoke your acceptance? There is no magic number. We would recommend that you
give the seller at least two opportunities to fix the product, more if you are
tolerant.
What if you buy a lemon with a warranty that says your only
remedy is to get it repaired? Does that mean you have to keep lugging it to the
repair shop?
Absolutely not! The law does not expect you to keep trying a
remedy that doesn’t work. Section 2-719 of the code says that when a limited
remedy fails “of its essential purpose,” you can then revoke your acceptance.
What this means is that if the product can’t be repaired after a reasonable
number of attempts, you can revoke acceptance and demand return of the full
purchase price. This is true even though the warranty says you only have the
right to get the product repaired.
Under the code, you must revoke acceptance within a
reasonable amount of time after discovering that the product you bought is
substantially impaired. The longer you wait, the weaker will be your case. As
long as you are trying to get the product repaired, you don’t have to worry.
But once you have given up, get back to the store and revoke!
Let’s assume that you bought a TV set. A week after it’s
delivered, it breaks down. You give the repairman four cracks at repairing it,
but it keeps going on the fritz and you want to unload it. You visit the store
and inform the manager: “I want to return the TV and get my money back.”
The manager is pleasant and suggests that a repairman be sent out again.
You say: “I’ve had the repairman come to my house four
times, and that’s enough. I want my money back.”
The manager is likely to tell you it’s not store policy to
give cash refunds. He may take out a warranty card and say: “Look at the
warranty. Our only obligation is to repair the TV set.”
Your answer is: “Under the Uniform Commercial Code, if
the repairs don’t work, I don’t have to keep trying. I hereby revoke my
acceptance of the TV. I offer to return the set and I demand my money back.”
Though it’s not mandatory under the law, we recommend that
you write your revocation on a piece of paper and hand it to the person who sold
you the product. You will then have concrete evidence of your revocation if, at
some later date, you have to take the matter to court. Your note should take
the following form:
[Date]
I hereby revoke my acceptance of
the [insert name of product] I bought at [insert name of store].
The product is substantially impaired and acceptance is being revoked pursuant
to Section 2-608 of the Uniform Commercial Code. I offer to return the product
in return for the money I paid for it.
Sign the note, make a copy, and keep it for your records.
When you go to the store, hand the note to the salesperson. That’s it. You can
now return the product and demand your money back, if despite your revocation,
the store should refuse to refund your money, don’t take your anger out on the
product. Under the law, you have an obligation to take good care of the product
as long as it is in your possession. And, as you will see, you may be able to
collect damages from the seller for any costs you incur in keeping that product
in good condition.
Under Section 2-715 of the Uniform Commercial Code you are
entitled to collect incidental and consequential damages if you are sold a
substantially impaired product.
In one case, for example, a Mr. Rodriquez bought some furniture
from a large
Mr. Rodriquez had not yet paid for the furniture but since
it was in his home he had legally accepted it. He therefore revoked his
acceptance and returned the furniture to the store. He then went to small
claims court to sue the store for the incidental damages he had suffered. Here
is what the court said:
“Section 2-715 of the Uniform
Commercial Code states. ..
‘Incidental damages resulting from the seller’s breach include
expenses reasonably incurred in inspection, receipt, transportation and care
and custody of goods rightfully rejected . . . and any reasonably expenses
incident to that delay. . .’”
The court found that Mr. Rodriquez suffered incidental
damages of $150 for the care and custody of the furniture and for handling and
securing its return. The store was therefore obliged to pay Mr. Rodriquez $150,
plus interest.
These are losses that result directly from the product
itself. For example, in the case of Belcher v. Hamilton, Ralph Hamilton
bought a freezer from John Belcher. The freezer kept breaking down and, despite
repeated efforts; it could not be made to work properly. Each time it broke
down, all the food in the freezer spoiled. On two occasions Ralph Hamilton lost
over $400 in food. He sued John Belcher and collected, as consequential damage,
the cost of the spoiled food.
If you have problems convincing the seller to allow you to
revoke your acceptance, remind him/her of your right to collect consequential
and incidental damages. The damages claimed would depend upon the product.
Think how your defective product might have caused you losses. For example,
were there any storage charges that could be considered incidental damages? Did
you have to rent a product to replace the defective one? If so, the rental
costs could qualify as consequential damages.
When you have assembled your case, be prepared to explain to
the seller that: “Under the Uniform Commercial Code, you are liable for
damages I suffer because this product is defective. Unless you want to lose a
lot of money, I suggest you allow me to revoke my acceptance and give me my
money back.” Then give the seller examples of the types of damages you
might claim.
This power play should give you a solid chance at getting
your money back. If the seller still refuses, you may then use the Uniform
Commercial Code in seeking a judgment against him in small claims court.
In 1975 the Truth in Lending Law was amended to include the
Fair Credit Billing Act, which was designed to protect users of credit cards.
And by credit cards we mean not only those issued by Master Card, American
Express, Diners, Visa and the like, but any card, charge plate, coupon book or
similar device that enables you to buy now and pay later – regardless of
whether it is issued by a department store, gas station, florist or any other
source.
As the law now stands, if you use a credit card to buy a
product that proves to be defective, you do not have to pay your credit card
bill. It sounds simple, and it is, but there are two restrictions.
The first restriction is that the product must have cost
at least fifty dollars. The second restriction requires that it must have been
purchased from a seller located in the state in which you live. If it is not
within your state, it must be within one hundred miles of where you live. There
is, however, one exception to these distance restrictions. They do not apply if
the seller of the defective product is directly or indirectly owned or
franchised by the issuer of the credit card. This means that if you live in
Under the law, you must give the seller of a charged product
the same opportunity to make good his written or implied warranty as you would
if you had paid cash. If, after you have made every good faith attempt to gain
satisfaction, the seller fails to live up to his warranty, you may then notify
the credit card company to stop billing you.
Under regulation Z of the Truth in Lending Act, you have the
right not to pay a credit card company for the purchase of a defective product
costing more than fifty dollars. All you have to do is notify the credit card
company that the product they are billing you for is defective. Then it’s up to
the store from which you bought the product to work out a resolution of the
problem with you. Your letter should follow this basic format:
[Date]
Dear Sir;
On [insert date] I bought a [insert name of product] from
[insert name of store]. My credit card number is [insert number].
I have made a good faith attempt to resolve a problem resulting from a defect
in the product purchased. I have not been able to resolve the problem and
request that pursuant to Section 226.13 of Regulation Z of the Truth in Lending
Act my account not be billed for the amount of the purchase. The amount is [insert
cost of product].
Sincerely,
[Signature]