Repair
Order Compliance Issues
By
Keith Whann
The
Repair Order is the key form in a motor vehicle repair or service
transaction. The document is impacted by a number of federal and state
laws including, but not limited to: The Magnuson-Moss Warranty Act,
Article 2 of the Uniform Commercial Code, State Motor Vehicle Codes, and
various State Administrative Rules. This outline will assist you in
identifying potential problem areas when reviewing a Repair Order.
Identity
of supplier and notice of right to an estimate
State
Administrative Rules generally require that when a dealership performs
repairs or any service where the anticipated cost exceeds a set amount
(oftentimes twenty-five dollars) and there has been face-to-face contact
between the consumer and the supplier prior to the commencement of the
repair or service, the dealership must provide the consumer with a form
prior to the commencement of any repair or service that contains specific
information. Some of the information required usually consists of: the
date; the identity of the supplier; the consumer’s name and telephone
number; the reasonably anticipated completion date; if requested, a
written estimate of the anticipated cost of the repair or service; and
often, a disclosure in language similar to the following:
Repair
Order: Sample Estimate Choice Format
Estimate
YOU
HAVE THE RIGHT TO AN ESTIMATE IF THE EXPECTED COST OF REPAIRS OR SERVICES
WILL BE MORE THAN TWENTY-FIVE DOLLARS. INITIAL YOUR CHOICE:
________
Written Estimate
________
Oral Estimate
________
No Estimate
The
foregoing disclosure can usually be separate or may be incorporated into
another form used by the dealership so long as the disclosures are EASILY
legible and CLEARLY AND CONSPICUOUSLY appear on the form. In the event
that a dealership gives written estimates prior to beginning any repair or
service regardless of the anticipated cost, an estimate choice form is
still generally required.
Authorization
for repair
Every
repair order form should provide a space for the customer to sign and give
the dealership authorization to attempt the repair. In addition, the form
should provide a space for the customer to authorize the dealership to
operate the vehicle on public roads for testing purposes.
Authorization
for additional charges that exceed the estimate
When
an estimate has been requested by a consumer, a dealership usually must
obtain either oral or written authorization from the consumer for the cost
of any additional, unforeseen, but necessary repairs when the cost of
those repairs or services equals a set amount (usually ten percent or
more, excluding tax) of the original estimate. Furthermore, if an estimate
was not given because the anticipated cost of a repair or service was less
than the established estimate choice threshold, the dealership must obtain
oral or written authorization for any additional costs when the total cost
of the repairs or services, if performed, will exceed the threshold. A
space should be included on the repair order for the consumer’s initials
signifying that he or she authorizes additional work or services. If the
authorization is to be obtained by telephone, the dealership should
request information so that they can be sure that the correct person is
giving the authorization.
Disclosure
of charges for disassembly, reassembly or partially completed work
A
dealership should disclose prior to acceptance of any motor vehicle for
repair whether charges will be imposed for disassembly, reassembly or
partially completed work in the event that the consumer does not authorize
completion of the service. The charges usually are required to be directly
related to the actual amount of labor or parts involved in the inspection,
repair or service. The dealership should disclose any charge that is not
directly related to the actual performance of the repair or service that
nevertheless will be imposed by the dealership whether or not repairs or
services are performed.
Space
to include an itemized list of repairs
The
Repair Order should include a section in which the dealership can provide
the consumer with an itemized list of repairs performed including: a list
of parts or materials utilized and a statement of whether the parts or
materials are used, remanufactured or rebuilt, if not new; the cost of the
parts; the amount charged for labor; and the identity of the individual
performing the repair or service.
Notice
of right to receive replaced parts
State
Administrative Rules generally require dealerships to inform the consumer
of his right to receive any replaced parts. Generally, there are two
exceptions: The dealership may keep parts that are to be rebuilt or sold
by the dealership, and may keep parts that must be returned to the
manufacturer in connection with warranted repairs. The dealership is,
however, obligated to inform the consumer beforehand that the parts will
be reused. In addition, the consumer may indicate that he does not wish to
have the parts and that the said parts should be discarded.
Recommended
maintenance
Extreme
caution should be exercised to ensure that any recommended maintenance
information is accurate and does, in fact, correspond to the
manufacturer’s recommendations. If these service recommendations are the
dealership’s, or do not correspond to the manufacturer’s, then
language disclosing this fact should be included in a clear and
conspicuous fashion.
Anticipated
completion date
State
Administrative Rules usually require that the reasonably anticipated
completion date for the repair or service must be stated.
Technicians’
identification
Many
State Administrative Rules require that the technician performing the
repair or service must be identified. (Note: This does not require them to
be identified to the consumer by name, an identification number frequently
is used to satisfy this requirement.)
Warranties
Generally
speaking, service transactions have two components: labor and parts. Labor
is usually warranted to some extent by the dealership and new parts are
warranted by the manufacturer of the part. It is important to remember
that implied warranties exist unless they are disclaimed and they should
only be disclaimed in total when all parts and services provided are to be
sold "As Is."
Often,
warranty disclaimers on the Repair Order form contains language which
would appear to be contradictory to the actual practice in most
dealerships or could be drafted in a more comprehensive fashion. In
general, anyone who offers a written warranty is prohibited from
disclaiming or modifying implied warranties. However, there are two
permissible disclaimers for implied warranties. If the dealership offers a
"limited" written warranty, it may include a provision that
restricts the duration of implied warranties to the duration of the
limited warranty. In addition, if the dealership sells a consumer product
with a written warranty from the product manufacturer, but does not
warrant the product in writing, it can disclaim the implied warranties.
In
most states, the implied warranty of merchantability may be disclaimed or
limited in duration to the term of the express warranty, only by clear and
conspicuous language. The disclaimer must generally be in writing and it
must be clear to consumers that the entire product risk falls on them. The
dealership should specifically indicate that it does not warrant "merchantability,"or
use a phrase such as "with all faults" or "as is.”
However, the warranty of merchantability cannot be disclaimed when a
warranty is given to the consumer or when a service contract is sold by
the dealer on its own behalf to the customer within ninety days of the
vehicle sale date. The implied warranty of fitness for a particular
purpose may also be disclaimed if done in clear and conspicuous language
that clearly calls the purchaser’s attention to the absence of the
warranty.
"As-is"
disclaimers cannot be in conflict with oral statements and are ineffective
against fraudulent statements, or when in conflict with written
statements. The Uniform Commercial Code indicates that if a dealership
makes a warranty in one part of a contract and disclaims all warranties in
another part, the disclaimer is ineffective.
The
following is an example of language which could be used for as a possible
warranty disclaimer where NO WARRANTY WHATSOEVER is being offered on Parts
or Labor:
ANY
WARRANTIES ON THE PRODUCTS SOLD HEREIN ARE THOSE MADE BY THE MANUFACTURER
OF THOSE PRODUCTS. THE DEALERSHIP HEREBY EXPRESSLY DISCLAIMS ALL
WARRANTIES, EITHER EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE REGARDING ANY PRODUCTS
OR SERVICES PROVIDED, UNLESS OTHERWISE INDICATED ON THE SERVICE REPAIR
ORDER. THIS DEALERSHIP NEITHER ASSUMES NOR AUTHORIZES ANY OTHER PERSON TO
ASSUME FOR IT ANY LIABILITY IN CONNECTION WITH THE SALE OF SAID PRODUCTS
OR SERVICES. THIS DISCLAIMER BY THE DEALERSHIP IN NO WAY AFFECTS THE TERMS
OR PERFORMANCE OF THE MANUFACTURER’S WARRANTY.
If
any repair or service, or any part of the repair or service, will be
performed by a person other than the dealership or its employees, and the
dealership disclaims any warranty of that repair or service, the
dealership must disclose that the service or repair will be done by
someone else, the nature of the repair or service that person will perform
and, if requested by the consumer, the identity of the person, before any
repair or service takes place.
Written
receipt
A
written receipt must be provided to the consumer upon request for any
motor vehicle or part that is left with or turned over to the supplier for
repair or service. The receipt should include: the name of the dealership
performing the repair or service; the name and signature of the
representative who actually accepts the vehicle or part; a description
including the make and model number or any other features that help to
identify the vehicle or part; and the date the vehicle was left with the
dealership.
Customer
notice of right to an estimate
Many
State Administrative Rules specify that the Dealership must post a legible
sign in a conspicuous place within the area of the dealerships place of
business where consumers requesting any repair or service are directed or
provide a separate form at the time of the face to face contact and prior
to the commencement of any repair or service which contains language
similar to the following:
NOTICE
IF
THE EXPECTED COST OF A REPAIR OR SERVICE IS MORE THAN TWENTY-FIVE DOLLARS,
YOU HAVE THE RIGHT TO RECEIVE A WRITTEN ESTIMATE, ORAL ESTIMATE, OR YOU
CAN CHOOSE TO RECEIVE NO ESTIMATE BEFORE WE BEGIN WORK. YOUR BILL WILL NOT
BE HIGHER THAN THE ESTIMATE BY MORE THAN TEN PERCENT, UNLESS YOU APPROVE A
LARGER AMOUNT BEFORE REPAIRS ARE FINISHED. STATE LAW REQUIRES US TO GIVE
YOU A FORM SO THAT YOU CAN CHOOSE EITHER A WRITTEN, ORAL, OR NO ESTIMATE.
Additional
disclosures may be incorporated into the notice signage as long as the
foregoing appears as the first listed disclosure. In the event that the
dealer provides estimates of repair or services regardless of the cost,
then the sign or form containing the foregoing notice may be modified to
disclose that fact.
Miscellaneous
Provisions
The
following are items which are frequently found on a Repair Order. These
items should be dealt with very carefully due to the fact that unwanted
liability can be created for the dealership if they are not handled
appropriately when drafting a Repair Order.
Miscellaneous
Materials Charges
A
charge for miscellaneous materials used in the repair is generally
permitted in most states, provided the charge is disclosed up front to the
consumer and the amount charged is not excessive.
Hazardous
Waste Disposal Charges
A
charge for hazardous waste disposal often is charged on all repairs. Such charges may only be assessed (if they can be charged at all)
upon the repairs of those customers requiring services or repairs that
generate a hazardous waste, and then with additional limitations. |
