Used Car Warranties, Restrictions on Disclaimers

The Magnuson Moss Warranty Act, Chapter 50 to Title 15 of the U.S. Code, prohibits a car dealer from disclaiming implied warranties when the dealer offers a qualifying written warranty or enters into a service contract with the buyer. The act makes any disclaimer of implied warranties ineffective when the act applies. So an “as is” purchase agreement cannot waive implied warranties when the consumer buys a service contract from the dealer or the dealer provides a written warranty. Two implied warranties, for example, are (1) the warranty that the car is fit for its ordinary purpose (merchantability) and (2) that a car is fit for a particular purpose when the consumer makes the dealer aware that the car must fit that purpose.

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