Spotlight: Electronics Lemon Law for New Jersey

Posted by Sergei Lemberg, Esq. on December 3rd, 2008

Back in August, I wrote a post about New Jersey’s pending lemon law for electronics. The bill, A-1002, passed out of committee, but hasn’t moved since then. New Jersey Assemblymember Paul Moriarty recently released a video about why such a law is necessary. It’s worth watching!

Lemon Law for IP

Posted by Sergei Lemberg, Esq. on December 1st, 2008

In a September 9 decision in Jesmer v. Retail Magic, the Appellate Division of the Supreme Court of New York addressed the issue of whether an end user has a cause of action against a software manufacturer when an independent distributor actually sold and installed the product. The court found that the plaintiff, a grocery store, had no cause of action against the manufacturer for breach of contract or breach of implied warranty, but that the plaintiff did have a cause of action to recover damages for breach of express warranties outlined in the brochure, the price quote, the online digital licensing agreement, and the seller’s distribution agreement.

In this case, the plaintiff used a distributor to buy and install a point-of-sale system in the grocery store. The system allegedly never worked properly, and the manufacturer said that because the plaintiff consented to the digital licensing agreement (those annoying documents that require you to click “I Agree” before you can download software), the 90-day warranty had expired. The court found, though, that the plaintiff had never seen nor agreed to the licensing agreement, so the 90-day warranty period hadn’t yet begun.

Also at issue was whether or not the distributor was working for the plaintiff or the manufacturer. The court found that the distributor was working for neither.

When Lemon Warranties are Lemons

Posted by Sergei Lemberg, Esq. on November 12th, 2008

San Francisco’s KGO Channel 7 recently ran a report that might make you think twice before buying a no-lemon guarantee for consumer products. Danielle Adler bought a no-lemon warranty from Best Buy along with her laptop, and not long after started having a series of problems. The guarantee said that, if problems aren’t fixed after three repair attempts, the buyer gets a new product.

After the fourth repair attempt, Adler wanted a new computer, but Best Buy said that their records showed only one repair attempt. She ultimately received her new computer, but Channel 7 investigated and discovered that Best Buy doesn’t count all repairs towards its lemon policy.

The moral of the story? Before buying a no-lemon warranty, remember that all consumer products over $25 are covered by the federal Magnuson-Moss Warranty Act – the ultimate lemon law.

Wisconsin Lemon Fridge Owner Gets the Cold Shoulder

Posted by Sergei Lemberg, Esq. on October 26th, 2008

WKOW-TV in Madison, Wisconsin, recently reported that a family in Monroe found that they had a lemon refrigerator on their hands. Like the lemon cars we see all the time, the family’s $1,600 fridge had four different defects. Maytag wouldn’t replace the refrigerator or repair it – and wouldn’t reimburse the family $500 for the two times the fridge conked out and spoiled their groceries.

Although Annie Figi, the refrigerator’s owner, told Maytag that she had a lemon, the company (correctly) said that the state’s lemon law didn’t apply. Thankfully, she turned to the TV station’s consumer troubleshooting team, who convinced Maytag to replace the refrigerator.

While it’s true that state lemon laws typically only apply to vehicles (although assistive devices and wheelchairs are sometimes covered), it’s important to remember that other federal and state laws cover consumer goods. The federal Magnuson-Moss Warranty Act, for example, would most likely have applied, as would Section 2 of the Uniform Commercial Code.

The moral of the story? If you buy a product that’s defective, assert your rights. Ultimately, the law is on your side.

Consumer Electronics Lemon Law? Long Overdue

Posted by Sergei Lemberg, Esq. on August 14th, 2008

Raleigh-Durham’s WRAL recently highlighted a growing gap in consumer protection: the lack of coverage for consumer electronics. In a story posted on its website, WRAL’s “5 On Your Side” team reported on a woman who bought a lemon laptop computer that repeatedly crashed, lost documents, and had random non-working keys. Although the woman had an extended warranty, and sent the computer in for repair four times, the problem still wasn’t fixed. Thanks to the efforts of WRAL reporters, the woman received a refund, but her case points to the larger problem of big investments in electronics and bigger problems.

Although the Magnuson-Moss Warranty Act covers all purchases over $25, and most state UCC laws also provide consumers with some protection, there’s a growing movement in several states to enact Lemon Laws specifically for personal electronics.

This year, New Jersey Assembly member Nilsa Cruz-Perez led the charge once again to pass “The Consumer Electronics Warranty Lemon Law,” which would have covered electronic items valued at $250 or more. (A similar bill had been introduced in the previous legislative session but wasn’t enacted into law.) On May 5, 2008, A-1002 was voted out of the Assembly Consumer Affairs Committee, but it was never brought to a full vote of the Assembly.

When the bill got out of committee, Cruz-Perez issued a press release, saying in part:

“Many consumer electronics, like cell phones and computers, have evolved from flashy gadgets to necessary investments in everyday life,” said Cruz-Perez. “Consumers who make investments in devices that can cost as much as an automobile should be afforded the same protections against defects and malfunctions we give to new car buyers.”

The bill would regulate consumer electronics warranties, extended warranties, and service contracts to provide a uniform set of consumer protection standards that include:

* Replacement of any electronic device that cannot be repaired within three attempts with a device of equal value and condition;

* A full refund of the total purchase price for any electronic item deemed defective;

* For stores advertising in-home service of electronics, dispatch of a service technician within 72 hours of receipt of a service request;

* The certification of the condition of any electronic device, in writing, by the warranty holder and a retail representative before the device is sent away for repairs;

* Honoring warranties despite cosmetic defects incurred with normal use;

* Honoring warranties even if the cost of repairs would exceed the purchase price of the device;

* Requiring manufacturer’s warranties to take precedence over extended warranties and service contracts and;

* Requiring extended warranties and service contracts run consecutively with any existing manufacturer’s warranty.

There is also momentum in Pennsylvania to enact consumer protections for personal electronics that are similar to the state’s Lemon Law. If such a law is signed into law, it won’t be a moment too soon.