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Although the Act makes consumer lawsuits for breach of warranty easier to bring, its goal is not to promote more warranty litigation. On the contrary, the Act encourages companies to use informal dispute resolution mechanisms to settle warranty disputes with their customers. Basically, an informal dispute resolution mechanism is a system that works to resolve warranty problems that are at a stalemate. Such a mechanism may be run by an impartial third party, such as the Better Business Bureau, or by company employees whose only job is to administer the informal dispute resolution system. The impartial third party uses conciliation, mediation, or arbitration to settle warranty disputes.
The Act allows warranties to include a provision that requires customers to try to resolve warranty disputes by means of the informal dispute resolution mechanism before going to court. (This provision applies only to cases based upon the MagnusonMoss Act.) If a business owner includes such a requirement in your warranty, the dispute resolution mechanism must meet the requirements stated in the FTC`s Rule on Informal Dispute Settlement Procedures (the Dispute Resolution Rule). Briefly, the Rule requires that a mechanism must:
It is clear from these standards that informal dispute resolution mechanisms under the Dispute Resolution Rule are not informal in the sense of being unstructured. Rather, they are informal because they do not involve the technical rules of evidence, procedure, and precedents that a court of law must use.
As stated previously, a business owner does not have to comply with the Dispute Resolution Rule if the owner does not require consumers to use a mechanism before bringing suit under the MagnusonMoss Act.
This article is intended to be helpful and informative. But even common legal matters can become complex and stressful. A qualified consumer protection lawyer can address your particular legal needs, explain the law, and represent you in court. Take the first step now and contact an attorney in your area from our directory to discuss your specific legal situation.