South-Western Legal Studies in Business

Magnuson-Moss Act Applies to Warranty for Goods Leased Rather than Purchased
Description Appeals court held that the warranty provisions of the Magnuson-Moss Act apply to the lessee of an automobile. Even though the lessee is not the owner of the vehicle, the bank that owned the vehicle explicitly transferred warranty rights to the lessee and the Act seeks to protect consumers of products.
Topic Consumer Protection
Key Words Warranty; Magnuson-Moss Act; Automobile Lease
C A S E   S U M M A R Y
Facts Peterson leased a new VW Beetle from North Shore Bank, which bought the car from a VW dealer. VW issued North Shore a written warranty. North Shore assigned the warranty rights to Peterson. She had many problems with the car. Authorized dealers were unable to repair it in four attempts. Peterson then revoked her acceptance of the vehicle in writing. VW refused, so Peterson sued VW for breach of the warranty under the Magnuson-Moss Act. The trial court dismissed the suit, holding that Peterson is not a consumer as defined under the Act because she is a lessee of the vehicle. Peterson appealed.
Decision

Reversed. The purpose of the Magnuson-Moss Act is to protect the ultimate user of a product. As the term warranty is defined in the Act, it does not specify that the sale must be made to the consumer with passage of title for the warranty to be effective. Peterson is qualified as a consumer who is entitled to enforce the written warranty. The bank explicitly transferred rights in the warranty to Peterson for the effective period of the warranty. The fact that the car was leased by Peterson rather than purchased directly does not affect her rights under the Act.

Citation Peterson v. Volkswagen of America, --- NW2d --- (2004 WL 692141, Ct. App., Wisc., 2004)

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