Tee is in the market for a recreational vehicle, so goes to RV World, LLC to check
Question:
Tee is in the market for a recreational vehicle, so goes to RV World, LLC to check out her choices. Tee zeros in on the Elite Deluxe model but is concerned about reliability. Arain, an RV World salesperson, tells Tee not to worry, because the Elite Deluxe comes with a lifetime warranty. Unknown to Tee, the standard warranty is only two years, and RV World's sales manager has specifically told Arain that he is not authorized to say anything different. Tee decides to purchase the Elite Deluxe, in part because of Arain's statements regarding the warranty.
- Assume you represent Tee. What arguments would you make as to why RV World is obligated to provide a lifetime warranty on Tee's RV?
- Same facts as above, but assume that the RV Purchase Agreement Tee signed to finalize her purchase included the following clause:
[NO AGENT, EMPLOYEE, OR REPRESENTATIVE OF SELLER HAS ANY AUTHORITY TO BIND SELLER TO ANY AFFIRMATION, REPRESENTATION, OR WARRANTY EXCEPT AS STATED IN THIS AGREEMENT.]
"Seller" was defined earlier in the Agreement as RV World, LLC, and the Agreement provides for a two-year limited warranty.
3. If you represented RV World, what arguments would you make as to why RV World is not obligated to provide a lifetime warranty on Tee's RV?
Management Accounting
ISBN: 978-0132570848
6th Canadian edition
Authors: Charles T. Horngren, Gary L. Sundem, William O. Stratton, Phillip Beaulieu