This guide describes what you can do if you are sold defective goods.
Defective Goods downloadables
Returns and Refunds on Defective Goods
If your product is defective and you only recently bought it, the seller should accept a return and refund what you paid, no questions asked. Although some businesses may publicize that they have a “no refund” policy, such a policy is not enforceable when it comes to defective products that violate a warranty.
If you do not discover the defect until after you have used the product or service for some time, then you probably cannot just demand your money back. First, you should give the seller a chance to replace the item or make repairs. If the item is still within its “useful life” and you have not abused or misused it, then any inspection or repair should be done at no charge to you.
- Immediate Rejection of Defective Goods
Maine law gives you the right to reject goods upon delivery if they fail “in any respect to conform to the contract.”[1] If the defect is minor, then the seller should be given a chance to “cure” (e.g., repair) the defect at no charge to you.[2] If the seller is providing a replacement, they cannot require you to wait an unreasonable amount of time to receive a replacement.[3]
If your item is not defective, then whether you can return it for a refund depends on the seller’s return policy. If their policy is “no returns unless defective,” then you likely will not be able to return it for a refund. Sellers are not required to give cash refunds for goods that are not defective, unless it is their policy to do that.
- How to Reject Defective Goods
To reject a defective good, you must notify the seller of your rejection. The notice should be in writing and should state the reasons why you are rejecting the good. Be sure to clearly state why the good is defective. You should mail the notice to the seller’s place of business and keep a copy for yourself. The notice should be sent as soon as possible, and always within a reasonable time after the good was delivered.[1] If you bought the good at a store and do not notice the defect until after you have inspected it at home, notify the seller immediately and do not use the good. You are required to hold the good with reasonable care and permit the seller to remove them.
The rule regarding rejection applies if the seller does not deliver the good on time. For example, if you order an item for delivery on June 1, and it is not available by that date, you may reject it and the seller must refund any payment.
[1] 11 M.R.S. § 2-602(1).
- Layaway Sales
You can also reject a defective good purchased on layaway that you have yet to receive. If you purchase a good on layaway but find out that the good is defective while you are still making installment payments, you can make the same rejection and demand. However, for layaway sales, the seller has the entire time remaining on layaway to cure the defect.[1]
If you are in this situation, you may have the right to stop making installment payments until the seller confirms that the defect is cured. Before suspending payments, you should consult with an attorney. If you do not comply with the requirements regarding rejection, you may be in breach of contract.
[1] 11 M.R.S. § 2-508(1).
- When the Defect Is Not Immediately Discovered
If you do not immediately discover the defect, you likely will not be able to reject the good. But you still have warranty rights and other options to get relief.
As discussed in our warranties guide, Maine law automatically provides an implied warranty of merchantability in addition to any express warranty for any good sold by a merchant.[1] This implied warranty guarantees that an item will perform as it was designed to: a washing machine will wash, a refrigerate will refrigerate. For consumer goods other than used cars, this implied warranty cannot be denied or modified, and a consumer cannot be required to pay any charge for service, inspection, or repair covered by the implied warranty. If a defect substantially impairs the value of a good—and defects that violate the implied warranty of merchantability will likely meet this requirement—and the good cannot or has not been repaired despite your demand to the manufacturer or seller, you may have the right to revoke your acceptance of the good and receive a refund a replacement item or a refund. . Such a revocation must be made within a reasonable time of discovering the defect and you must be able to return the item in a condition that is not substantially different from when you received it.
[1] 11 M.R.S. § 2-3l4.
- Damages
If the item (new or used) cannot be repaired, but you want to keep the item or it doesn’t otherwise meet the requirements for revoking acceptance, you may be entitled to damages, or compensation for your financial loss. The basic measure of damages for breach of warranty is the difference between the value of goods accepted and the value the goods would have had if they had been delivered in good condition.[1] In addition, you may also be eligible for incidental damages[2] and consequential damages.[3] Maine law also allows a buyer to notify the seller that the contract has been breached and that the consumer is deducting reasonable damages (“setoff”) from payments still owed. Before stopping or reducing any payments, you should consult with an attorney. Consumers injured by a seller’s or manufacturer’s negligence should also take reasonable steps to mitigate (lessen) their damages.
[1] 11 M.R.S. 2-714(2).
[2] Incidental damages resulting from the breach might include reasonable expenses for the care of defective goods, such as the cost of towing a defective vehicle to a garage.
[3] 11 M.R.S. § 2-715. Consequential damages include damages which could not reasonably be avoided and which are a direct result of the breach. For example, if a consumer were sold a defective car and that car was the consumer’s only available form of transportation, then the cost of a rental vehicle or other transposition could be a consequential damage.
- Unfair Trade Practices
If you have purchased a seriously defective item and the seller refuses to honor your express or implied warranty rights, the refusal may also violate the Maine Unfair Trade Practices Act and you may be able to sue for damages or restitution, plus your attorneys’ fees.[1] More information about claims under this law can be found in our Maine Unfair Trade Practices Act guide.
[1] 5 M.R.S. § 213.
- Statute of Limitations
In most cases, you have 4 years from the delivery of your item to file a lawsuit based on implied warranty claims. For express warranty claims, the time period may be longer or shorter, depending on the terms of the express warranty. Generally, claims under the Maine Unfair Trade Practices Act must be brought within 6 years of the accrual of the claim.
- Return of Deposits
Many seller may ask for a deposit or partial payment in advance, particularly if the item is expensive. Never make a deposit unless you are sure you want the merchandise and can afford it. If you cancel the sale, you may lose a portion or all of your deposit.
The right to recover your deposit or layaway payments depends on your agreement with the seller (your contract) and who is breaking the agreement. If you are canceling the agreement and have not accepted delivery of the goods (or the merchant has taken the goods back), then Maine law[1] allows you to recover only so much of your deposit or layaway payments that exceeds:
- Any reasonable “liquidated damages” clause in your contract, or
- If there is no such damages clause, 20% of the total contract price or $500, whichever is smaller.
A liquidated damage clause is a contract provision that by which the parties agree on an amount of damages in the event of a breach, and will often provide for forfeiture of the buyer’s deposit. However, courts will not enforce these clauses unless they reasonably reflect the seller’s actual damages. These clauses are commonly found in form contracts offered to consumers on a “take it or leave it” basis. If that is the case, the clauses may not be enforceable.
For example, assume that you purchase a $300 chair on layaway and make payments of $75. However, you are unable to complete the purchase and request a refund. Your contract did not have a liquidated damages clause. Under Maine law, the seller can keep $60 of the deposit ($300 x 20%) and must return the $15 balance. Similarly, if you order a new car for $l0, 000 and place a $750 deposit but decide to cancel the order, the dealer can keep $500.
[1] 11 M.R.S. § 2-718(2).
- Deposits on Contracts for Services
The law governing the return of deposits on contracts for services is much the same as for goods, with two major differences.
Substantial Breach
In order to cancel the contract and recover your deposit, you must show that the seller’s breach is substantial. For sales of goods, even a slight variance from the contract may allow you to reject and recover your deposit. However, for services, you must show that the seller’s breach substantially impairs the value to you of their performance, or that they acted willfully or negligently.
For example, if you contract with a carpenter for a new porch, with construction to begin on June 1, and the carpenter does not start until June 3, you probably cannot cancel the contract and recover your deposit.
However, if the porch was to be used for a wedding on June 15, and the carpenter knew this, the failure to start on June 1 could be a substantial breach allowing you to cancel and recover your deposit.
Damages
If the buyer of services cancels the contract without sufficient justification, then the seller may keep so much of the buyer’s deposit as will cover his damages, which may include administrative costs and lost profits.
Because the seller already has your deposit, it may be difficult to recover any money, even if the deposit exceeds the seller’s damages. You may have to sue to recover your money.
- Magnuson-Moss Consumer Warranty Act
The Magnuson-Moss Warranty Act[1] is a federal law governing written warranties provided by businesses for consumer goods. The Act does not require any business to provide a warranty; instead, it establishes requirements for those businesses that offer written warranties. If a business provides a written warranty for a consumer good, then the Act prohibits the business from disclaiming any implied warranties during the term of the written warranty. This means that if a business provides a written warranty with respect to a good sold to someone in Maine but disclaims the implied warranty of merchantability during the term of the written warranty, the business is violating both federal law and Maine law.
Additionally, if a business sells a service contract for a consumer good within 90 days of the sale of the good, then it cannot disclaim any implied warranties. This is particularly important in Maine with respect to used car sales, because Maine law permits a used car seller to disclaim implied warranties. If you buy a used car and a service contract for it, then you have implied warranty protection. The possible remedies for violation of the Act include damages, equitable relief and attorney fees.
[1] 15 U.S.C. §§ 2301-2312.
- “As-Is” Sales
It may be a violation of Maine law to label a consumer good “as is.” This age-old expression can be interpreted as an attempt to disclaim your implied warranty rights and Maine law prohibits this. The most “as is” can mean in Maine is that the seller is not offering any express warranties. The consumer good (new or used) will still come with an implied warranty that it is not seriously defective. The only exception to this rule is the sale of used cars. Used car dealers are allowed to disclaim implied warranties, but they must do so expressly.[1]
[1] 10 M.R.S. § 1473; 11 M.R.S. § 2-316(5).
- Dangerous Consumer Goods
Sometimes consumer goods are so defective that they can cause physical injury. This implicates legal claims called “torts” and one which is beyond the scope of this Guide. Maine does have specific laws protecting consumers from physical injury (e.g., the seller of unreasonably dangerous consumer goods is strictly liable if the product injures the consumer).[1] If you have been injured by a defective consumer good, you should seek the advice of a lawyer and contact the National Consumer Product Safety Commission.
[1] 14 M.R.S. § 221.
- Leases and Rent-To-Own Transactions
Maine law also providers protections for consumers who lease goods or enter into[1] “rent-to-own” contracts. Among other things, the law requires rental purchase agreements to be in writing and to disclose all terms.[2] The Bureau of Consumer Credit Protection (1-800-332-8529) is responsible for enforcing the law governing rental purchase agreements.