Exercise 7

Dorella purchases a brand new sewing machine from Sew-Sew, Inc. The sewing machine is one from a line of equipment Sew-Sew, Inc. manufactures itself for sale, utilizing components made and sold by third-party subcontractors. The written warranty specifically states that upon defect, malfunction or failure of the equipment, Sew-Sew, Inc. will replace the entire defective, malfunctioning or failing specific piece of equipment with a brand new component. Within the duration of the warranty, the motor of the sewing machine breaks in the middle of Dorella’s efforts to complete her kitchen curtains. Dorella returns the machine to Sew-Sew, Inc. Rather than replace the motor with a new one, it instead installs a used, remanufactured motor as a means of cost-saving given that every motor on that particular line of equipment has failed and needed replacement. Dorella brings suit against Sew-Sew, Inc. based on its failure to install a new motor, as provided for in the written warranty.

How should the judge rule?

A. For Sew-Sew, Inc., since it reasonably complied with the written warranty when it replaced the motor free of charge under the warranty.

ANSWER "A" IS NOT CORRECT. Please try again.

B. For Dorella since Sew-Sew Inc.’s written warranty specifically provides for the replacement of defective components with brand new ones.

ANSWER "B" IS CORRECT. Under the Magnuson-Moss Warranty Act, the written warranty must include a statement explaining what the seller will do in the event of a defect, malfunction or failure. Here, Sew-Sew Inc.’s warranty specifically states that defective, malfunctioning or failing equipment will be replaced with brand new components. This was not done here. Given its specific written warranty, Sew-Sew, Inc. cannot attempt to save money as a result of the apparently defective motors by modifying the terms of the written warranty regarding the use of brand new components. Rather, Sew-Sew Inc.’s efforts to regain or minimize any losses resulting from the apparently defective motors must be focused exclusively on the third-party manufacturer of that component.