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Understanding Your New Boat Warranty

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Make sure you receive all of your paperwork with a new boat, including any separate warranties on the engines. Photo by Rob Lucey
Make sure you receive all of your paperwork with a new boat, including any separate warranties on the engines. Photo by Rob Lucey

For many new boat owners, it is only after encountering problems that they read through the “paperwork” which came with their boat. The better course would be to become familiar with a number of practical warranty issues before you purchase – such as if the dealer will repair the hull in the event of a “manufacturing defect” or if it must be shipped to the manufacturer’s plant.

It is important to determine what level of “warranty work” the dealer is equipped to provide on components and engines, or if you need to go directly to the manufacturer for warranty repairs.

Unlike some cars, which may have a “bumper to bumper” four- or five-year warranty, virtually all boat manufacturers – despite having assembled the boat – warranty only the hull for “X” number of years. The engines and other components are warranted by their respective manufacturers, and the warranty duration may range from 12 months to a few years.

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Many purchasers do not realize that the boat dealer and the manufacturer are completely separate entities. Thankfully, for most basic repairs, many dealers recognize that the buying public is their stock in trade and will have in place the facilities and authorization to conduct warranty repairs on the spot. So, when you are in the market for a new boat, it is as equally important to “shop” for a boat dealer that will have the personnel and facilities to conduct those repairs which are capable of being done locally. Equally true, many boat manufacturers assist their dealers in trying to get to the bottom of customer complaints.

Some structural defects will require the vessel to be returned to the factory, so it is important to understand that you are likely looking at boats which that dealer has purchased under a dealership agreement. While the dealer is the “seller” in the transaction, it is highly likely that the dealership has excluded “implied warranties” on your new purchase and the only warranties which your new boat hull and its components will have are “manufacturer’s warranties.”

Legally, because they are separate and distinct entities, a buyer must give reasonable (written) notice to both the dealer and the manufacturer of any manufacturer’s defects or possibly be barred from any remedy. Some courts take this requirement very seriously. In one vehicle warranty case, the buyer’s claim was barred because he failed to inspect the vehicle for “four to five days” and failed to notify the seller of an alleged breach for three weeks. While this may be the extreme, it is important to notify both the dealer and manufacturer of any serious issues as soon as practical.

Most courts treat the notice requirement as a “condition precedent” to making a breach of warranty claim. But, in another case, the court held that the buyer gave proper notice of a dry rot condition, when he complained three days after delivery about a fuel leak and discovered the dry rot six months later.

Usually, buyers complain to the dealer on the assumption that notifying the dealer is “acceptable notice” to everyone concerned. Some manufacturers prefer this initially. If the warranty document located in the “boat paperwork” says this is the procedure to follow, there should be no “notice” issue. But, as a new boat owner, you must check your “boat papers,” as some manufacturers defend on the “lack of notice” and the courts are split on whether “notice” to the selling dealer is sufficient.

Where serious problems arise, “notice” to the boat or engine or component manufacturer, as well as the dealer, is the better rule even though some courts have held that “buyers need only notify their immediate sellers.”

Once notified of the problem, in most instances, the manufacturer (depending upon the wording of the warranty) may agree to limit the remedy to “repair or replacement of non-conforming goods or parts,” and most boat manufacturers prefer this remedy over compensating the buyer.

Typically, the manufacturer has an arrangement with the dealer whereby the dealer is paid an agreed-upon rate to provide warranty service for the manufacturer’s boats.

The Uniform Commercial Code provides that a remedy of this nature is “optional unless the remedy is expressly agreed to be exclusive, in which case it is the sole remedy,” and then buyer may elect to sue for damages. But specific language is necessary for a repair or replacement remedy to be exclusive, such as manufacturer’s express warranty is to “fix without charge any part which proves defective in normal use,” and further states that “this is the only warranty made by manufacturer applicable to this vessel.”

In rare cases, where “repair or replacement remedy” is not exclusive, then the buyer can choose between having the boat repaired (or even replaced depending on the magnitude of the defect), or keeping the boat and collecting buyer’s damages.

Assuming the repair or replacement remedy is exclusive, the next issue is usually whether the remedy addresses the problem. If a seller fails or refuses to effect repairs when required by the terms of a warranty, the warranty can be found to have “failed of its essential purpose.” As one boat case put it, “the buyer … is not bound to permit the seller to tinker with the article indefinitely in the hope that it may ultimately be made to comply with the warranty.”

After a certain number of tries, the manufacturer must give up trying to repair the boat. However, unlike the lemon law for a vehicle, the number of required attempts is not fixed under most states laws, but is determined on a case by case basis taking into consideration many factors.

Lastly, very much like a ship’s log, the new boat owner should keep a log of all repairs and/or attempts and other factual data which may become significant (as evidence) in a case for breach of warranty and should always insist that copies of the service order be provided. Also, it is ever so important that you register all warranties which your “boat papers” come with and make sure the dealer provides warranty information for all major components, the engine(s) and the hull. Safe boating!

BoatLawyer™ Capt. Robert L. Gardana is a licensed U.S.C.G. Master and Maritime Attorney with more than 30 years experience. He may be reached at Gardanalaw@gmail.com (www.BoatLaywer.com).

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Capt Robert L. Gardana
Capt Robert L. Gardanahttp://www.BoatLawyer.com
Capt. Robert L. Gardana is a licensed U.S.C.G. master and maritime attorney for over 30 years (website: www.BoatLawyer.com). If you have a question you would like to see addressed in a future column, e-mail it to Gardanalaw@gmail.com.

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