Helping Auto Buyers Bargain

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Car Trouble: Some Help for the Uninformed Buyer D AVID A. W ARREN ? Vehicle purchasers have been in need of help for quite some time now. This Note
discusses reasons for this observation, by examining the legal framework that
allocates a significant and disproportionate amount of bargaining power to the
seller in the typical transaction. Possible sources of this disparity are problems
relating to consumer literacy and racial discrimination, issues that are discussed
in detail. These problems are considered in the context of warranty disclaimers
and the sale of used cars, an area of the law that is particularly hospitable to
advancing the interests of car dealers. The federal and state laws pertaining to
this area are ineffective at relieving consumer distress. This Note advocates taking an approach that would give consumers more
information before signing the sales agreement, increasing their bargaining
power and therefore allowing them to escape a potentially problematic situation
by asking more questions and bargaining with the seller for more favorable
terms. This is in stark contrast to much of the recently passed, popular legislation
that has focused on providing a remedy for the car purchaser only after a
problem has already been created. Changing the Uniform Commercial Code
and encouraging states to adopt the amendments would be a significant step in
the course of protecting consumers who have historically faced serious “car
trouble.” I. I NTRODUCTION Mike Dowdall could have used some help when he was shopping for a truck in the spring of 1999. 1 He thought that the local used car dealership was a reputable business and that he could get a suitable truck for work there at a
reasonable price. 2 A friendly dealer directed Mr. Dowdall to a white Ford pick-up truck that seemed to be in good shape with a relatively low number of miles on
the odometer. 3 Dowdall was told that the vehicle was a trade-in from one of the ? B.A., Miami University, 2002; J.D., The Ohio State University Moritz College of Law, expected 2005, Managing Editor, Ohio State Law Journal. This Note is dedicated to my parents
who have always given me outstanding and unconditional love and support in all of my
endeavors. Other members of my family and my close friends have also helped me in my
efforts to succeed in law school. I would like to thank Professors Douglas Whaley and Gregory
Travalio for their insight and assistance on this topic. 1 Mr. Dowdall’s story was a feature in The Pitch, a newspaper in Kansas City, Missouri. Allie Johnson, Hell on Wheels: Wrecked and Abused Rental Cars Get a New Lease on Life at
Shawnee Mission Ford, K AN . C ITY P ITCH W KLY ., Sept. 5, 2002, at 1, available at http://www.pitch.com/issues/2002-09-05/news/feature.html (last visited Feb. 26, 2005). 2 Id. 3 Id. A pick-up truck was the natural choice for Mr. Dowdall because he was shopping for a vehicle that could transport both people and materials to and from work. Id. 442 OHIO STATE LAW JOURNAL [Vol. 66:441 dealership’s frequent customers. 4 This, in fact, was not the case. The truck was actually purchased from the residential driveway of an ex-convict who sold
vehicles that were previously used as rentals for Enterprise Rent-A-Car ® . 5 The truck had been wrecked in the past and required serious repair work because of all
of the defects. 6 Dowdall was subsequently contacted by the National Highway Traffic Safety Administration, and was informed that the odometer had been
“rolled back” on his truck. 7 The truck was also returned to the dealer after the previous purchaser, Don Wagner, discovered that there were serious mechanical
defects and demanded a refund. 8 But this did not prevent the dealership from selling it soon after it had been returned—without disclosing any of the defects
that justified the recent refund. Dowdall’s case is an extreme example of how consumers get cheated by car dealers who take advantage of buyers. The ex-con from whom the dealership was
buying had recently sold vehicles to twelve major car dealers and five smaller
dealers with locations in Kansas and Missouri. 9 The law firm that Dowdall contacted had won similar lawsuits against the same dealership ten years before
Dowdall contacted them. 10 Although an attorney for this firm claims that he can recognize previous damage and signs of odometer rollback, 11 the used car manager and the saleswoman of the car dealership who dealt with Dowdall both
claimed that they were not able to make the same identification from their limited
training. 12 This example of a typical consumer’s problems with a used car dealership shows that the current legal system in place to protect consumers does 4 Id. 5 Id. Although the dealership could have purchased the cars from the rental car firm itself for less money, it chose to go through the two-time felon. Id. 6 Id. The amount of money that Dowdall lost as a result of repair and improvement costs to the truck nearly exceeded the price that he paid to purchase the vehicle. Id. It is likely that
Dowdall would have a cause of action under the Unfair and Deceptive Acts and Practices
statutes of most states. See infra note 117 and accompanying text. 7 Johnson, supra note 1. The actual number of miles that the truck was driven was more than twice what the odometer displayed. Id. The dealership most likely was violating both
federal and state law by tampering with the odometer on the truck. Federal law prohibits both
tampering with odometers and transferring title to vehicles with odometers that are known to
have been changed. 49 U.S.C. §§ 32703, 32705 (2000). Federal law also does not affect state
laws that prohibit tampering with odometers. 49 U.S.C. § 32711 (2000). 8 Johnson, supra note 1. Wagner was met with resistance when he demanded that the dealership buy back the defective truck. 9 Id. 10 Id. Despite the fact that the dealership had already paid a substantial award of damages for this prior suit, it apparently had not significantly changed its business practices. 11 Id. 12 Id. The attorney claims that all dealers are able to identify previously damaged vehicles. Id. 2005] UNINFORMED CAR BUYER 443 not prevent the initial harm to buyers and does not cause the dealerships to change
their ways to avoid liability. In many commercial transactions, consumers are outmatched by the seller in terms of bargaining power. This disparity is especially significant in the context of
purchasing an automobile and dealing with warranties because the current state of
consumer law does not allow for any remediation. Popular legislation, including
state lemon laws, is aimed at helping consumers recover after the contract has
already been completed. The Uniform Commercial Code (“UCC”), which has
been adopted by each state in some form, provides consumers with numerous
protections. 13 However, these protections can easily be waived by the buyer if the seller includes a disclaimer that the buyer unknowingly accepts. 14 But if states adopted significant changes in the disclaimer requirements of the UCC,
consumers would acquire a better understanding of the protections that they have
and would be able to bargain on an equal footing with car dealers. This Note defines specific problems that consumers face when purchasing automobiles and proposes solutions to those problems. Part II outlines the relative
importance of purchasing automobiles to consumers and the problems that
consumers face with auto dealers who have a bargaining power advantage. Most
consumers do not have the level of literacy necessary to fully understand a car
purchase contract. Spanish-speaking consumers confront problems with English-
language contracts and African-American consumers deal with racial
discrimination from car dealers. Part III analyzes the legal relief that is currently
available to consumers under state and federal law. The state of the law regarding
consumer protection today is inadequate to remedy the bargaining power
disadvantage that car buyers face. Part IV undertakes to help out consumers by
requiring the inclusion of better disclosures in purchase contracts. Changing the
UCC disclaimer provisions to make it more difficult for car dealers to void the
implied warranties will increase bargaining and prevent consumers from being
surprised later if they run into costly mechanical problems with their vehicles. 13 The Uniform Commercial Code is a model law for states to adopt as their primary commercial law. Article 2 of the UCC pertains to sales. The writing and revision of the UCC is
done primarily by the American Law Institute (“ALI”) and the National Conference of
Commissioners on Uniform State Laws (“NCCUSL”). These organizations consist of
attorneys, judges, professors, and other scholars from the legal community. Many states have
adopted the UCC as their primary sales law with some minor alterations. Any significant
changes made to the UCC will cause state legislatures to recognize that a change in their
respective versions may be in order. 14 Sellers are able to disclaim warranties by including the phrase “as is” in the contract as notice to buyers that they are not protected by implied warranties. U.C.C. § 2-316 (1999). See
infra note 80 and accompanying text. 444 OHIO STATE LAW JOURNAL [Vol. 66:441 II. A NALYSIS OF A C AR P URCHASE Purchasing automobiles is very important to consumers and to the economy because vehicles are generally very expensive. The purchase of a car is often
second in importance only to the purchase of a home. 15 Despite the importance of these purchases, there is a significant disparity in the amount of commercial
sophistication that exists between the seasoned car dealer and the unsuspecting
consumer. Because of this disparity in commercial sophistication, consumers
have a bargaining power disadvantage because they cannot use the knowledge of
legal protection as leverage when negotiating. A. The Importance of Car Purchases Automobile purchases are very important to both parties to the contract. Although used cars are generally less expensive than new cars, used vehicle sales
still account for a significant amount of money. 16 This Note focuses mainly on the actions of used car dealers regarding the warranty provisions that they offer
(or deny) buyers. 17 Consumers must understand that they need to do some serious research before spending a significant amount of money on a vehicle, because car
buying has been considered dangerous by consumer advocates. 18 These advocates claim that they are on the same side as the buyer by making it seem as 15 A car purchase may be third in importance if a consumer pays for graduate school because the price of higher education, especially legal and medical school, is much greater than
that of most vehicles. John R. Kramer, Legal Education in an Era of Change: Will Legal
Education Remain Affordable, by Whom, and How?, 1987 D UKE L.J. 240, 247 (1987). 16 Franchised new car dealers sold 19.4 million used cars for an average price of $13,850 each in 2002, making total sales of almost $270 billion. N ATIONAL A UTOMOBILE D EALERS A SSOCIATION A NALYSIS D IVISION , NADA D ATA , T HE U SED -V EHICLE D EPARTMENT , http://www.nada.org/Content/NavigationMenu/MediaCenter/NADAData/20033/NADAData_
usedvehicle.pdf (last visited Feb. 26, 2005). This confirms the writings of some commentators
who predicted increased used car sales due to better made and maintained cars. See Bruce
Mann & Thomas J. Holdych, When Lemons Are Better Than Lemonade: The Case Against
Mandatory Used Car Warranties, 15 Y ALE L. & P OL ’ Y R EV . 1, 5 (1996). 17 Vehicle manufacturers may actually afford “secret” or “good-will” warranties to consumers without their knowledge, giving extra protection to new car buyers. Jeff Sovern,
Good Will Adjustment Games: An Economic and Legal Analysis of Secret Warranty
Regulation, 60 M O . L. R EV . 323, 325–26 (1995). Manufacturers will allow dealers to make the repairs for free if the dealer believes that the consumer is likely to buy again from the
manufacturer. Id. at 334–35. Used cars normally have less warranty protection than new cars. 18 “Auto Purchases and Lease Fraud” is currently on the Top Ten Hot Topics list at ConsumerVoiceUSA.com. Consumer Voice USA Homepage,
http://www.consumervoiceusa.com/ (last visited Feb. 26, 2005). 2005] UNINFORMED CAR BUYER 445 if the dealer and buyer are at odds in a contractual battle. 19 Despite all of the warnings from these advocates, consumers are probably not as careful as they
should be before they sign a purchase contract for a car. The average consumer is a profitable target for experienced car dealers for a variety of reasons. Despite the fact that there is a wealth of information involving
car-buying strategies on the internet 20 and in print, 21 many consumers still face an informational disadvantage when compared with car dealers. Common
experiences include high-pressure, hurried sales, and complex paperwork that
goes unread. 22 The price and other features of the product tend to be the main points of concern, resulting in consumers not reading warranty information in the
typical case. 23 Common dealer add-ons may include expensive service contracts, extended warranties, and insurance that is not needed. 24 The most common responses to the question of how dealers could improve the buying experience for
consumers were for dealers to lessen the amount of pressure in sales and to
increase their levels of honesty, according to a survey of new-car buyers. 25 19 “Car dealers hate us . . . You’ll Love us” is the slogan for CarBuyingTips.com. CarBuyingTips.com Homepage, http://www.carbuyingtips.com/ (last visited Feb. 26, 2005). 20 There are a variety of websites that are useful to consumers by allowing them to compare prices of new and used cars and learn about common dealer “scams.” See, e.g.,
http://www.carbuyingtips.com/ (last visited Feb. 26, 2005); http://www.edmunds.com/ (last
visited Feb. 26, 2005). 21 See, e.g., M ARK E SKELDSON , W HAT C AR D EALERS D ON ’ T W ANT Y OU T O K NOW (1995); Buying Tips: Tricks of the Trade, C ONSUMER R EPS ., Apr. 2003, at 17. 22 Michael J. Phillips, Unconscionability and Article 2 Implied Warranty Disclaimers, 62 C HI .-K ENT L. R EV . 199, 243 (1985). 23 Id. 24 Two large national auto dealers, AutoNation and Sonic Automotive were brought into Florida courts to defend class action suits for allegedly inflating the prices on extended
warranties and service contracts. See William R. Levesque, Suit Accuses Auto Dealers of
Trickery on Warranties, S T . P ETERSBURG T IMES , May 10, 2002, at 6B. Dealers have also been accused of making inadequate disclosures on warranties. See Used-Car Dealers Accused of
Fraud, S T . L OUIS P OST -D ISPATCH , Dec. 13, 1991, at 4C. “Bait and Switch” tactics are commonly used to lure customers into a dealership promising good deals on vehicles but then
not having the vehicles available when the customer arrives—leaving the consumer with only
the expensive vehicles for sale. Mark Curriden, Buyers’ Suit Says Car Dealer Used Fraud to
Trap Customers, A TLANTA J. & C ONST ., Apr. 11, 1992, at A3. 25 A UTOMOTIVE R ETAILING T ODAY , S URVEY OF A TTITUDES AND P ERCEPTIONS OF THE A UTOMOBILE P URCHASE E XPERIENCE A MONG T HREE M AJOR G ROUPS 2002 (Jan. 2003) (researched by Wirthlin Worldwide), http://www.autoretailing.org/pdf/consumer.pdf (last
visited Feb. 26, 2005). Automotive Retailing Today is an organization that seeks to “build
stronger customer relationships” by “promot[ing] a better understanding of the retail side of the
automotive industry.” See Automotive Retailing Today, About ART,
http://www.autoretailing.org/about.htm (last visited Feb. 26, 2005). 446 OHIO STATE LAW JOURNAL [Vol. 66:441 Many consumers have bad experiences when purchasing a car and then do not trust car salespeople after those experiences. 26 Consumers cannot know the true nature of a car purchase from negotiations through the final signing unless
they have already gone through the whole experience once and have been
harmed. The consumer’s lack of information before making that initial purchase
adds to the bargaining power disadvantage that consumers face when matched
against experienced car dealers. 27 B. Bargaining Problems Inherent in a Vehicle Purchase Professor Stephen Plass outlines a typical transaction involving the purchase of a used car. 28 Plass describes a young woman looking for an inexpensive car for transportation to work. 29 The dealer pressures her into acting quickly and presents her with complex paperwork that includes expensive options that were never
expressly accepted by her. 30 Some of these extras included various types of insurance and expensive financing despite her good credit rating. 31 Because the 26 See, e.g., Christopher A. Sawyer, Losing the Youth Market, A UTOMOTIVE D ESIGN & P RODUCTION , Apr. 1, 2003, at 56. The author expresses surprise at the reaction of a young woman to American car dealers who have caused her to claim that she will never buy another
domestic car. The woman stated in the article that “[a]ll they cared about was the sale,” when
referring to the dealers. Id. Consumers like this woman may be more wary the second time they
purchase a vehicle, but they still deserve protection the first time around, when they are not
likely to be as cautious. 27 Bargaining power disparity has been expressly recognized in other similar circumstances, including the disadvantage that employees face when dealing with their
employers regarding union membership. “In dealing with such employers, the individual
unorganized worker is helpless to exercise actual liberty of contract.” See C AL . L AB . C ODE § 923 (West 1994). 28 Stephen A. Plass, Bargain Avoidance in a Competitive Bargain Market: The Car Sales Conundrum, 2 W YO . L. R EV . 1, 10–11 (2002). 29 Id. 30 Id. An example of a typical contract for the sale of an automobile shows that there is a lot of space for dealer add-ons on the front of the contract and very little space for the disclaimer
of warranties that can be found on the reverse side of the document. E. A LLAN F ARNSWORTH & W ILLIAM F. Y OUNG , S ELECTIONS FOR C ONTRACTS 258–59 (2001). Although the dealer’s registration fee looks variable because a maximum is written in the contract, that maximum
amount is already included in the price, so that term probably is not negotiated often. See id.
“Scotch-guarding” the interior of cars formerly was a popular dealer add-on, but a more
common option today is “window-etching,” an identifying feature on the vehicle that is
supposedly helpful in case it is stolen. See Bruce Mohl, Lawsuit Takes on Boch Glass-Etching
Fee, B OSTON G LOBE , Nov. 3, 2002, at E3. In this situation, the price for the etching was included in the purchase price without the consent of the buyer. Id. 31 Plass, supra note 28, at 10–11. This buyer could probably have obtained better financing if she would have procured it on her own from another lending institution outside of 2005] UNINFORMED CAR BUYER 447 dealer offered her a significant trade-in price for her old vehicle, which she valued
very lowly, she trusted him and signed the rest of the paperwork without asking
any questions. 32 She did not even have enough time to read through the lengthy documents because the dealer was pressuring her so much. 33 This may have been a strategy by the salesman to complete the sale quickly, freeing him to make
another deal with another customer. This is a common scenario that involves very
little actual bargaining. 34 Professor Plass also mentions that many of these consumers will probably just pay the extra charges and treat it as a “bad
experience.” 35 These consumers may not seek legal relief because they do not know how they are protected by the law and may not even know about the
freedom to bargain over price that is inherent in automobile purchases. 36 Sellers have also been alleged to purposely include contract terms that they know are unenforceable in commercial transactions. 37 The cost-benefit analysis that the seller performs always results in the choice to include the unenforceable
terms because the costs of getting caught are slight and the possible benefits are
substantial. 38 This is a result of the imperfect information that leaves the consumer at the mercy of accepting the terms of the seller. When the seller
includes the unenforceable terms, the consumer is left with the impression that
each term is legally enforceable; the lack of information prohibits the consumer
from knowing the legal environment as well as the seller does. Although a simple
solution to this problem is self-policing by the seller, the general public does not
trust car dealers enough to rely on dealers regulating themselves. 39 The general the car dealership. She may have been under the impression that no sale could be completed
that day if she wanted to finance the purchase through her own bank. 32 Id. She did not believe that her car was worth very much, although this conclusion was probably not the result of a significant comparison study of the used car valuation guides that
are available to consumers. 33 Id. 34 Plass observes that “no bargaining took place at any level on any issue.” Id. at 11. 35 Id. Consumers also may be unwilling to pursue litigation if they perceive its value to be low because it is expensive and there is not a high probability of success. Many dealer add-ons
are costly, but not enough to justify the assistance of more costly attorneys. 36 Id. at 20. 37 See Bailey Kuklin, On the Knowing Inclusion of Unenforceable Contract and Lease Terms, 56 U. C IN . L. R EV . 845, 845 (1988). Professor Kuklin argues that these types of transactions are inefficient and need to be regulated through a fashioning of remedies beyond
simple damages. Id. at 861–70. 38 Id. at 862. 39 A few car dealers are significantly changing their businesses in response to this problem. In addition to this, many dealerships are changing their images in hopes of
abandoning the negative stereotype and breeding consumer trust. See Jim Witschger, Our
Customers?Our Partners; Many Companies Provide Thoughtful, Helpful Support Staffs, A M . S ALESMAN , July 1, 2003, at 8 (describing this phenomenon in the context of arguing that it should be extended to software sales). But the market demand from consumers is not strong 448 OHIO STATE LAW JOURNAL [Vol. 66:441 structure and common dealings that occur in a car purchase account for some of
the bargaining problems, although there are other factors that aid the dealer in its
efforts to maximize profits. C. Other Circumstances that Account for the Bargaining Power Disparity Many American consumers do not have the general level of literacy that is required to be able to both read and understand the mass of financial and legal
paperwork that is presented to them at the car dealership. A recent article
examines the results of the U.S. Department of Education National Adult Literacy
Survey (“NALS”), which was completed in 1992 at the insistence of Congress
after the passage of the 1991 National Literacy Act. 40 The authors of the article found that as many as 96% of American adults cannot fully understand credit cost
information presented to them in numerous documents. 41 Many of these documents pertain to highly complex financing information, including interest
rates and down payments that are commonly found in different parts of the mass
of information. 42 This requires consumers to locate and transfer information from one document to another mentally in order to fully understand what their
obligations are. 43 This amount of sophistication is much greater than the general ability to read and write. 44 Because of these difficulties, it is unclear to what extent consumers are able to assent to the terms of a contract by agreeing to sign
it. 45 Dealers, who are much more experienced in using complicated forms and enough to force all dealers to comply. Furthermore, changing a dealership’s image does not
necessarily prevent the dealer from adding unenforceable terms to sales contracts. The practice
of adding illegal terms may not yield to the same market forces that cause image changes
among some dealers. 40 Alan M. White & Cathy Lesser Mansfield, Literacy and Contract, 13 S TAN . L. & P OL ’ Y R EV . 233, 235 (2002). 41 Id. at 238. The NALS study was broken up into five different levels of difficulty for the subjects. Understanding a typical car transaction would fall into the most difficult level (Level
V), and the study found that only around 3% of the subjects had attained this high level of
literacy. Id. at 236–38. One could infer that only this percentage of the subjects in the study
would be able to fully comprehend the terms of the typical vehicle purchase. 42 Id. at 237–38. 43 Professors White and Mansfield note that “consumers need a high level of quantitative literacy in order to understand and evaluate terms of loan transactions.” Id. at 240. 44 Id. 45 Id. at 250–51. White and Mansfield argue that courts do not consider this consumer defense—they would rather hear arguments relating to unconscionability, fraud, or public
policy exceptions to enforcement. Id. Courts have also found reasonable people not to have the
level of intelligence to understand some other kinds of complicated documents. For example,
employee manuals that are distributed by a firm to explain employment conditions have been
found to be confusing to employees. See Woolley v. Hoffmann-La Roche, Inc., 491 A.2d 1257, 2005] UNINFORMED CAR BUYER 449 calculations, are in a far superior bargaining position as compared to the average
consumer, who does not have a high enough level of literacy to understand the
contract after dealing with it for only a short time. Although problems involving general American adult literacy are serious, an equally severe situation is that of Latin consumers in America who cannot speak
or read English entering into commercial transactions with contracts that are
written in English. These Spanish-speaking consumers may be more susceptible
to fraud in their commercial dealings if they are enticed into trusting salespeople
and signing contracts without knowing what they read (assuming that the
contracts are written entirely in English). In 2002, the Hispanic population in the
United States was 37.4 million people, or 13.3% of the American population. 46 In 2000, only about half of the total number of Spanish-speakers was reported to
speak English “very well.” 47 Consumers need to be fluent in English in order to understand and bargain over complicated matters involving financing and service
contracts at the dealership. 48 Because of the general rule of English-only in American sales dealings and the lack of regulations that require translation, there
are many cases where Spanish-speaking people have been harmed by car
dealers. 49 These consumers are especially likely to be preyed upon by car dealers because of their lack of English language education. Apart from issues about literacy or language, there are also serious problems of possible racial discrimination against African-American car buyers. An
experiment conducted by Professor Ayres in Chicago had some troubling results
because it showed significant discrimination in car sales to minority consumers. 50 1266 (N.J. 1985) (“Many of these workers undoubtedly know little about contracts, and many
probably would be unable to analyze the language and terms of the manual.”). 46 U.S. C ENSUS B UREAU R EPORT , T HE H ISPANIC P OPULATION IN THE U NITED S TATES : M ARCH 2002, at 1–2 (June 2003), available at http://www.census.gov/prod/2003pubs/p20- 545.pdf (last visited March 2, 2005). 47 U.S. C ENSUS B UREAU R EPORT , L ANGUAGE U SE AND E NGLISH -S PEAKING A BILITY : 2000, at 2–3 (Oct. 2003), available at http://www.census.gov/prod/2003pubs/c2kbr-29.pdf (last
visited March 2, 2005). 48 See supra note 41 and accompanying text. 49 See Steven W. Bender, Consumer Protection for Latinos: Overcoming Language Fraud and English-Only in the Marketplace, 45 A M . U. L. R EV . 1027, 1034–36 (1996). Professor Bender cites numerous examples of Latin consumers experiencing problems relating
to buying cars. Id. One dealer was accused of using Spanish-speaking employees to entice
immigrant customers for their business and another misrepresented the implications of an “as
is” disclaimer. Id. 50 For the results of this upsetting study, see Ian Ayres, Fair Driving: Gender and Race Discrimination in Retail Car Negotiations, 104 H ARV . L. R EV . 817, 827–41 (1991). The study is particularly troubling because car dealers are reported to use sexist and racist language in the
transactions. Id. at 846. s<i>ee also Mary Flowers Boyce, Discriminating Dealers? Analysis of
Reports That Automobile Dealers Give Better Deals to Whites Than Blacks, A UTO A GE , May 450 OHIO STATE LAW JOURNAL [Vol. 66:441 Black females were found to pay, on average, over three times the mark-up that
white males were forced to pay by the dealers. 51 Black men, although they paid less than black women, were still forced to pay more than twice of what white
men had to pay. 52 The study also showed how much more reluctant dealers were to share information about vehicle costs with minority buyers. While 47% of
white males were given a figure on vehicle costs, only 25% of black males were
given a figure, and not a single black female was given any cost information. 53 The price differential that minority buyers faced may have been a result, in part,
of the decrease in bargaining power that these minority consumers experienced
because of the limited information that the car dealers would offer to them. 54 The most appropriate explanation for the differences in treatment is revenue-based. 55 The dealers were able to distinguish between consumers based on their race and
sex to determine which purchasers were more likely to be willing to pay more,
allowing dealers to price discriminate. 56 It is imperative to consider the needs of these minority consumers who are most susceptible to seller abuse when
examining the scope of legal relief that is available in the American marketplace. III. L EGAL R ELIEF This Note relates most closely to the problems involving consumers’ knowledge of the UCC and the warranty protection that it provides. There are
also numerous federal and state laws in addition to the UCC that pertain to car
transactions. Courts have also added their gloss to the legal framework by
interpreting the applicable laws in particular situations. Unfortunately, there is 1991, at 12; Deceptive New-Car Ads, Unfair Practices Get Lots of Mileage at Year’s End
Fraud, L.A. T IMES , Dec. 5, 1993, at BB2. 51 Ayres, supra note 50, at 828. Black females faced a mark-up of $1237, which is more than three times the amount that white males faced, $362. Id. 52 Id. The average dealer mark-up when dealing with a black male was $783, as opposed to $362 for a white male. Id. 53 Id. at 836, tbl.5. 54 This proposition is undermined by the fact that the figures represented as the dealer’s cost were inflated substantially. See id. at 836. 55 Id. at 847. 56 Price discrimination is the process of segmenting the population in terms of who is willing to pay the highest for the goods offered. Because of the variance in the prices of cars for
different people, dealers can pick out the consumers who are willing to pay the most and force
them into paying more than other consumers. Dealers may have determined that black females,
especially, are willing to pay more than white males possibly because of their inability to gain
access to information about the purchase. See id. at 848. Professor Ayres also states that “[t]he
process of retail car negotiations becomes even more problematic when traditionally
disadvantaged members of our society effectively pay a bargaining tax whenever they purchase
a new car.” Id. at 872. 2005] UNINFORMED CAR BUYER 451 some overlap among federal and state laws that can become confusing when read
together in an attempt at harmonization. 57 A. State Consumer Protection Problems The UCC has been adopted into the laws of each state, but because the UCC is a model act, states are free to modify the provisions however they see fit. A
recent revision to the UCC has been approved, although it probably will not place
the consumer in a much better bargaining position. 58 The UCC codification is normally complemented by lemon laws, unfair and deceptive acts and practices
(“UDAP”) laws, and other miscellaneous provisions. 1. The UCC and its Inherent Problems The applicable part of the UCC to this Note is Article 2 because it deals with the sale of goods. 59 Many consumers probably do not even know what the UCC is, or how they are protected by it, for that matter. Even if consumers did know
about the amount of legal protection that is afforded to them, there are several
factors that make the protection illusory. There is a substantial amount of warranty protection available to consumers in the UCC. Warranties protect the expectations of buyers in sales transactions by
allocating the risk of product non-conformance (to expectations) between the
parties. 60 Warranties of quality 61 come in one of two varieties, express or 57 “One looking for statutory provisions protecting consumers from abuses in consumer sales transactions might as well use a kaleidoscope as a telescope or a microscope.” Donald F.
Clifford, Jr., Non-UCC Statutory Provisions Affecting Warranty Disclaimers and Remedies in
Sales of Goods, 71 N.C. L. R EV . 1011, 1016 (1993). 58 Although the most recent revisions (the 2003 Amendments) have been approved by the drafting bodies, the states have not yet incorporated these provisions into their respective
statutory codes. See infra note 103 and accompanying text. The 1999 Amendments are the
latest changes that have been adopted by the states in large part, and that version of the UCC is
cited when referring to the Code as it exists today in many states. Each citation to the most
recently revised UCC is specifically noted as the “amended 2003” version. 59 U.C.C. § 2-102 (1999). Article 2 is divided into numerous specific sections that are identified as “§ 2-314,” for example. This identifies section 314 of Article 2. 60 D OUGLAS J. W HALEY , W ARRANTIES AND THE P RACTITIONER 9 (1981). Changes in prices occur in commercial transactions according to the risk-shifting that takes place between
parties in the bargaining process. Professor Whaley analogizes warranties to insurance that must
be paid for by consumers. Professor Whaley also describes a brief history of the use of
warranties and dispels notions that caveat emptor, or “buyer beware,” ruled ever since the
beginning of civilization. Id. at 5–8. 61 Warranties of quality are different from warranties of title, which are also provided for in the UCC in § 2-312. Warranties of title bind the seller to the affirmation that there are not
security interests on the goods that are unknown to the consumer and that there is no patent 452 OHIO STATE LAW JOURNAL [Vol. 66:441 implied. 62 Express warranties are actually communicated in bargaining for the contract and result in the creation of expectations to the buyer from the
representations of the seller. 63 These warranties must “relate to the goods” and be a part of the “basis of the bargain.” 64 These requirements normally mean that the representation by the seller (either verbal or written) amounts to an express
warranty only if the representation might have played a role in the decision of the
consumer to buy. 65 The reasonable expectations of the buyer are considered when determining whether or not the representations made by the seller played a role in
the decision to purchase. 66 Implied warranties are included in sales contracts unless the buyer specifically excludes them through the methods outlined in the UCC. 67 The inclusion of an implied warranty in a sales contract is also independent of the
seller’s actual intent. 68 Unlike express warranties, an implied warranty attaches to the purchase regardless of what the seller represents in the purchase infringement from the sale. See D OUGLAS J. W HALEY , P ROBLEMS AND M ATERIALS ON S ALES , L EASES , AND L ICENSES 77–79 (1999) [hereinafter M ATERIALS ]. This Note focuses most specifically on the ability of sellers to disclaim implied warranties of quality in the sales of used
cars. 62 Id. at 79. 63 Id. at 79–80. 64 Id. at 80. The “basis of the bargain” in the UCC replaced the Uniform Sales Act provision that required a buyer to prove reliance. See U.C.C. § 2-313 (1999). 65 M ATERIALS , supra note 61, at 80. The representations need to have some substance to them to qualify as more than just mere “puffing,” a term used to describe common
representations by salespeople that are generally vague statements about certain product
features such as “this car is a real beauty!” Puffing does not amount to an express warranty
under normal circumstances because it is merely a subjective assessment by the seller of some
aspect of the goods. It has been pointed out that some courts consider statements to the effect
that the product is “first class” or “A-1” as express warranties, and not puffing. See Charles
Pierson, Comment, Does “Puff” Create an Express Warranty of Merchantability? Where the
Hornbooks Go Wrong, 36 D UQ . L. R EV . 887, 891–92 (1998). The author states that the courts in these cases examined the purchaser’s reliance and the seller’s superior knowledge in making
their decisions. Sellers need to be careful about representations that describe the goods because
those, however informal, probably amount to warranties. Specific language or other formalities
are generally not required under the UCC. See W HALEY , supra note 60, at 23. 66 W HALEY , supra note 60, at 24. A representation by a car dealer that both the engine and transmission of an older used car have been completely rebuilt would probably play a role in
the decision of a buyer to purchase the car and would be considered an express warranty. On
the other hand, a promise to repair the car in the future probably would not count as an express
warranty because it is not an “affirmation of fact or promise” relating to the quality of the
product at issue. See U.C.C. § 2-313 (1999). 67 M ATERIALS , supra note 61, at 83. Professor Whaley describes these warranties as “children of the law.” Id. 68 Id. 2005] UNINFORMED CAR BUYER 453 negotiations. 69 Implied warranties normally protect minimum consumer expectations of the product that they are purchasing. Minimum expectations are
what a normal (reasonable) buyer would expect at the very least when making a
purchase. In a typical car sale, there will be issues involving both types of
warranties, and the typical used car dealer will attempt to disclaim all of them to
reduce any obligation to repair or replace the vehicle in the future. 70 Two important implied warranties that apply to the purchase of cars (unless they are disclaimed, which they frequently are) are the implied warranty of
merchantability contained in § 2-314, 71 and the implied warranty of fitness for a particular purpose in § 2-315. 72 These implied warranties apply to used goods as well as new ones, although the reasonable expectations of the performance of
used goods is obviously less than the expectations for identical, but new, goods. 73 The merchantability warranty provides certain minimum standards that the
product must meet. In general, this means a product must meet the normal
expectations of the parties by working properly. 74 An implied warranty of fitness for a particular purpose applies to situations in which the seller represents that the product can be used for a specific purpose and
the buyer relies on this representation. 75 There are three conditions that need to exist before this warranty is created. 76 First, the seller must have had reason to 69 Id. 70 The UCC generally prohibits the disclaimer of express warranties because construing affirmative language that creates warranties along with language negating those same
warranties would be considered unreasonable under § 2-316(1). This Note focuses on the
ability of car dealers to disclaim implied warranties, an opportunity specifically allowed under
the Code. See infra text accompanying note 80. There is also a problem with auto dealers who use written disclaimers in the contract but orally represent that the consumer is still protected. See Michael J. Herbert, Toward a Unified
Theory of Warranty Creation Under Articles 2 and 2A of the Uniform Commercial Code, 1990
C OLUM . B US . L. R EV . 265, 266 (1990). The problem arises when the parol evidence rule is also considered, because that rule normally prevents the inclusion of any oral evidence into a fully
integrated contract when the oral representation is contrary to contract terms. U.C.C. § 2-202(b)
(1999). Buyers probably will not be able to assert as evidence the fact that they were told that
warranties covered the purchase under the parol evidence rule. Full integration generally means
that the parties intend the writing to be a final expression of their intentions. Id. 71 U.C.C. § 2-314 (1999). 72 U.C.C. § 2-315 (1999). 73 W HALEY , supra note 60, at 49–50. 74 M ATERIALS , supra note 61, at 88. Professor Whaley explains that this warranty (that the product will work) is all that the consumer really needs and posits the question, “When sellers
disclaim the implied warranty of merchantability (and they often do), why do buyers not
routinely complain?” Id. The warranty of merchantability has also been described as a promise
that the goods are of at least “mediocre” quality. See Herbert, supra note 70, at 279. 75 W HALEY , supra note 60, at 67–70. 76 Id. at 67–68. 454 OHIO STATE LAW JOURNAL [Vol. 66:441 know that the buyer has a particular purpose in mind that is not included in the
more general merchantability warranty scope. 77 Second, the seller must have had reason to know that the buyer is relying on the seller’s representation. Third, the
buyer must actually purchase in reliance on the seller’s representation. 78 What the seller actually knew is of no consequence under the language of the UCC. 79 The UCC allows for these important protections to be disclaimed through the use of specific language, including the use of the phrase, “as is” in § 2-316. 80 This is the most convenient way to disclaim warranties for sellers, because other
provisions make disclaimers more difficult. 81 In many sales of used cars, the “as is” disclaimer strips the consumer of all protection because there are no express
warranties offered. Although the UCC endorses this practice as sufficient to put
consumers on notice that they are unprotected, it is unlikely that the average 77 Id. The warranty of merchantability covers all ordinary uses of the goods. The warranty of fitness for a particular purpose may arise, in the context of vehicle purchases, where a
consumer specifically asks a salesperson for a pick-up truck that will be able to transport heavy
equipment great distances on a daily basis, and the seller makes a recommendation for a vehicle
that the buyer ends up purchasing because of the perceived “expert” advice. 78 Id. at 68. 79 Id. The seller can be charged with having “reason to know” by the courts from the buyer’s statements or conduct or other particulars of the transaction at issue. Another source for
the creation of implied warranties is the United Nations Convention on Contracts for the
International Sale of Goods. See United Nations Conference on Contracts for the Int’l Sale of
Goods, Apr. 11, 1980, U.N. Doc. A/Conf.97/18, 19 I.L.M. 668 (entered into force Jan. 1, 1988)
[hereinafter CISG]. As its name makes obvious, it is a body of law that applies to parties who
have their places of business in different nations when these parties contract for the sale of
goods. The CISG applies to international business transactions between parties from countries
that are signatories to the agreement. See CISG, art.1, para.1. Article 35 provides for basic
warranties that are similar to those created by the UCC. The analogue to the implied warranty
of merchantability is contained in Article 35, Paragraph 2, Clause (a) and the fitness for a
particular purpose warranty’s analogue is found in Clause (b). CISG, art.35. Unlike the UCC,
the CISG does not include any provisions that dictate how a disclaimer of warranty must be
written to be effective. It therefore is probably more difficult to disclaim implied warranties in
an international transaction. 80 U.C.C. § 2-316(3)(a) (1999). UCC § 2-316 contains the requirements for a seller who chooses to attempt a disclaimer of implied warranties. Subsection (3)(a) lists the “language that
in common understanding” makes it plain to the buyer that there are no warranties. “[W]ith all
faults” can also be used as an equivalent to “as is.” Subsection (3)(b) removes the implied
warranty if a buyer examines the goods fully or refuses a chance to examine them if the defects
could have been discovered with a reasonable examination. Subsection (3)(c) provides for
modification of implied warranties through course of dealing, course of performance, or trade
usage. 81 U.C.C. § 2-316(2) (1999). This provision mandates that a disclaimer of the warranty of merchantability must specifically mention the warranty and be conspicuous if written.
Excluding warranties of fitness must be in writing and conspicuous to be effective. Id. 2005] UNINFORMED CAR BUYER 455 consumer knows anything about implied warranties or even what the UCC is and
how it protects them. 82 The UCC has been characterized as providing “gap-fillers” that are implied in the contract in the event that the parties do not deal with a particular situation. 83 Although dealers have not specifically negotiated the disclaimer with buyers in
purchases, dealers are allowed to disclaim warranties because of the gap-filling
provisions of the UCC. It has been argued that this practice defeats some
reasonable expectations of consumers, and that the UCC’s requirements should
be changed to protect consumers from unfair surprise. 84 States have taken different approaches when implementing the UCC and have acted to protect consumers beyond what is required by the UCC, most
notably when implementing § 2-316. State legislatures commonly make subtle
changes to specific UCC provisions, and this is expected because the UCC is only
a model for state laws and not a mandate to the states. 85 The District of Columbia, Maine, Massachusetts, and West Virginia have a complete statutory ban on
warranty disclaimers in place because they all have changed the provisions of § 2-
316. 86 Any attempt by a seller of consumer goods, including both new and used cars, to disclaim implied warranties is unenforceable in these jurisdictions.
Although “as is” clauses are enforceable under the model § 2-316, they are not 82 See Mann & Holdych, supra note 16, at 13. Professors Mann and Holdych also imply that this is not the case with all consumers, as evidenced by the fact that used car dealers still
offer warranties and service contracts. These warranties are offered without any state mandate,
so the consumers must be aware that they need some sort of protection. Used car buyers also
tend to “shop around” more than new car buyers and this competition factor may also explain
why warranties are offered. For a discussion of how consumers force the used car market to
adjust to their needs, see id. at 21–22. 83 Id. at 10. 84 Yvonne W. Rosmarin, The Revision of Article 2 of the Uniform Commercial Code: Consumers-R-Us: A Reality in the U.C.C. Article 2 Revision Process, 35 W M . & M ARY L. R EV . 1593, 1597 (1994). As Rosmarin stated: “Disclaimer of implied warranties, especially of the
implied warranty of merchantability, is one of the most important and needed areas of revision
in Article 2.” Id. at 1609–10. 85 See supra note 13. 86 D.C. C ODE A NN . § 28:2-316.01 (2001); M E . R EV . S TAT . A NN . tit. 11, § 2-316(5) (West 1995 & Supp. 2003); M ASS . A NN . L AWS ch. 106, § 2-316A (Law. Co-op 1998); W. V A . C ODE A NN . § 46A-6-107 (Michie 1999 & Supp. 2003). A compilation and analysis of most of the state law modifications of the UCC that are mentioned in this Note can be found in Clifford,
supra note 57, at 1019–20. Maryland generally prohibits the disclaimer of implied warranties in
the sales of consumer goods. M D . C ODE A NN ., C OM . L AW I § 2-316.1(2) (2002). However, this prohibition does not apply to the sale of used vehicles that are over six model years old with
greater than 60,000 miles. Id. § 2-316.1(4)(a)(ii). Disclaiming implied warranties for the
identified used cars is allowed but is more difficult than the model § 2-316 disclaimer because
the disclaimer needs to be separately acknowledged and signed by the consumer in order for it
to be effective. Id. § 2-316.1(4)(b)(iii). See infra note 180 and accompanying text. 456 OHIO STATE LAW JOURNAL [Vol. 66:441 enforceable in these few states that have modified versions of the original code. 87 Connecticut and Vermont have altered § 2-316 to prevent sellers from
disclaiming implied warranties in the sale of new goods only, leaving used car
buyers without any extra protection. 88 South Carolina and Washington require a disclaimer to be more specific than the original § 2-316 to be effective. 89 The changes made to the UCC by the legislatures of these states are most likely a
response to inherent problems in the UCC. Taking a closer look at the language of the implied warranties in the UCC reveals a potentially serious problem for used car buyers. The implied warranty of
merchantability only applies to merchants, as they are defined in the UCC. 90 The problem with the merchantability warranty only applying to merchants is the
exclusion of other consumers who commonly sell their current vehicle in the
process of purchasing a new one. 91 Although trading in old vehicles to the dealer for credit on a new car is commonplace, many people would prefer to try to sell
their cars themselves to elicit a higher price. 92 It has been argued that the merchant restriction for implied warranties of merchantability should be removed
because it is “caveat emptor’s only remaining protagonist.” 93 It also seems to go against a basic precept of warranty law, which is to determine what the seller 87 Clifford, supra note 57, at 1022. 88 C ONN . G EN . S TAT . A NN . § 42A-2-316(5) (West 2002); V T . S TAT . A NN . tit. 9A, § 2- 316(5) (2000). 89 South Carolina requires language to be specific and construes ambiguity against the seller. S.C. C ODE A NN . § 36-2-316(2) (Law. Co-op. 2003). Washington requires particularity for an effective disclaimer. W ASH . R EV . C ODE A NN . § 62A.2-316(4) (West 2002). 90 See U.C.C. § 2-314 (1999). The U.C.C. defines a merchant as: a person who deals in goods of the kind or otherwise by his occupation holds himself out
as having knowledge or skill peculiar to the practices or goods involved in the transaction
or to whom such knowledge or skill may be attributed by his employment of an agent or
broker or other intermediary who by his occupation holds himself out as having such
knowledge or skill. Id. § 2-104(1) (1999). This is somewhat peculiar because the implied warranty of fitness for a particular purpose applies to all sellers. See id. § 2-315 (1999); see also Ingrid Michelsen Hillinger, The Merchant
of Section 2-314: Who Needs Him?, 34 H ASTINGS L.J. 747, 759 (1983). Professor Hillinger points out that the damages that can be awarded for a breach by the seller of both sections lead
to the same result. Id. at 772–73. The possibility of paying substantial damages can therefore
not be an explanation for excluding non-merchants from § 2-314. Id. 91 Professor Hillinger provides a sample transaction where the car buyer would have no relief when purchasing from a non-merchant when the automobile did not work as expected.
Hillinger, supra note 90, at 762–63. 92 See Raymund L. Flandez, State Getting Tough on Curbside Automobile Sales, M ARYLAND G AZETTE , Dec. 4, 2002, at A2. The practice of non-merchants selling cars in driveways and mall parking lots has been dubbed “curbstoning.” Id. 93 Hillinger, supra note 90, at 808. 2005] UNINFORMED CAR BUYER 457 intended to sell. 94 A non-merchant seller most likely intends that the car for sale will work as well for the new buyer as it has worked in the past for the seller. 95 If this does not happen, there are no warranties to help the buyer get what the seller
intended the buyer to have. 96 “As is” disclaimers, although endorsed by the UCC as containing a clear meaning to consumers, have actually been reduced to a “boilerplate” provision
which is meaningless to consumers in most instances. Professors Goetz and Scott
examine the interaction between express and implied contract terms by assuming
that contracting parties try to minimize the chance that their final expression will
be defective. 97 Parties initially must bear the costs of trial-and-error and use different contract formulations until they find a framework that protects the
expectations of their agreement. 98 After time, other parties use these same, commonly-accepted terms until they become boilerplate and are contained in
many different transactions. 99 Other parties use these same “pre-formulations” that import implied terms into the contract because they save costs by not having
to negotiate each provision individually. 100 The problem is that these pre- formulations eventually lose their meaning because the parties currently using
them are so far removed from the parties that actually understood and developed
the terms. 101 The phrase “as is” may have once been understood and developed by parties in commercial transactions, but car buyers today do not have that same
ability to bargain and implement contract specifics. 102 94 Id. at 761. 95 Id. at 762–63. 96 Id. 97 Charles J. Goetz & Robert E. Scott, The Limits of Expanded Choice: An Analysis of the Interactions Between Express and Implied Contract Terms, 73 C AL . L. R EV . 261, 272 (1985). 98 Id. at 278. 99 Id. at 288–89. 100 Id. at 278. (“For most parties, such implied terms are not only cheaper, but they are also better than do-it-yourself ones.”). The authors point out a problem with this phenomenon
being that it chills the expression of newer, possibly more effective pre-formulations because
parties no longer waste resources in trial-and-error practice. Id. at 289. 101 Id. at 288–89. 102 Professor Phillips asserts that consumers do not read warranty disclaimers because they are more concerned with other aspects of the car, like the price and included features.
Sellers also “are not in the habit” of bringing the clause to the attention of consumers and
explaining it to them. Phillips, supra note 22, at 242–43. “[T]he consumer’s main concern is the
swift acquisition of a highly desired product.” Id. at 244. It is also unlikely that typical
consumers would be able to fully understand what they are giving up by signing the sales
contract because there is so much unfamiliar legal terminology. Id. at 243. 458 OHIO STATE LAW JOURNAL [Vol. 66:441 2. The Latest Revisions to Article 2 are Ineffective The American Law Institute (“ALI”) and the National Conference of Commissioners on Uniform State Laws (“NCCUSL”) have completed a revision
of a significant portion of the UCC. 103 Article 2 has been revised, but the revisions will not help place consumers on a more equal footing with car dealers
with respect to bargaining power. One reason that the latest revisions do not
effectively protect consumers’ rights is that the UCC was created to modernize
the vast body of law that dealt with commercial transactions, not to be a set of
regulatory laws for consumer protection. 104 Consumer representatives who were included in the drafting process of the revisions did not attempt to change the
basic concept of the UCC. 105 These consumer advocates sought fair treatment in commercial transactions for consumers because the UCC assumes that most
commercial transactions are fair when the two parties to the deal are sophisticated
businesspeople. 106 Unfortunately, many commercial transactions now involve consumers who are significantly less sophisticated than their counterparts—the
sellers. 107 The changes espoused in this Note follow along the lines of the approach taken by the consumer representatives in the drafting party. A specific change was made in the revision to § 2-316, requiring that, to be effective, an “as is” disclaimer of implied warranties “in a consumer contract
evidenced by a record [must be] set forth conspicuously in the record.” 108 This is important because consumers may not be able to read disclaimer language that is
buried in dense, small text in the middle of the boilerplate section of the contract.
It is also possible that the boilerplate section will be printed on the reverse side of
the invoice. Conspicuousness will require sellers to remove their disclaimers from
this position in the contract. This is a valuable protection for consumers, but it is 103 The American Bar Association recently approved the revision at the mid-year meeting of its House of Delegates. See Uniform Law Commissioners, Announcements, ABA Approves
Six NCCUSL Acts, Feb. 9, 2004, at
http://www.nccusl.org/nccusl/DesktopModules/NewsDisplay.aspx?ItemID=91 (last visited
Feb. 26, 2005). This article notes that the original version of Article 2 was promulgated in 1951,
and that the revisions under review have been going on for decades. Although the revision has
been completed, no legally effective change has been made because no state has adopted any of
the most recent (2003) revisions. 104 Some of the purposes of the UCC are to “simplify, clarify, and modernize” commercial law and to make the law uniform among various jurisdictions. See U.C.C. § 1-
103(a)(1)–(3) (1999). “[T]he UCC took a hands-off approach to consumer sales problems.”
Clifford, supra note 57, at 1016. 105 Rosmarin, supra note 84, at 1595. Ms. Rosmarin is an attorney who served as an official observer to the Article 2 Drafting Committee. 106 Id. at 1595–56. 107 Id. 108 U.C.C. § 2-316(3)(a) (amended 2003). 2005] UNINFORMED CAR BUYER 459 unlikely that this provision will increase the amount of bargaining that consumers
will engage in with the dealer. It does not necessarily follow that a consumer who
has noticed a conspicuous disclaimer understands it. 109 Like the FTC Used Car Rule, 110 this new provision assumes that consumers know their rights under the UCC. 111 Unfortunately, they do not, and revisions requiring more basic information would be more effective to arm consumers with the information that
they need to know to bargain effectively. The UCC needs to take a broader
approach to consumer protection because state and federal laws are particularly
inadequate with respect to automobile transactions. Changes would be most
effective to UCC sections as opposed to existing federal and state laws that are
ineffective. 112 3. Non-UCC Provisions and their Problems Other state laws that have been passed to protect consumers do not have the potential to spark the nationwide effects that a change in the UCC could have.
State lemon laws are common, but these laws only apply after the transaction has
been made and the consumer has been injured. 113 Ohio’s lemon law 114 allows a consumer to obtain a refund of the purchase price for a new vehicle if a
manufacturer is unable to repair a serious defect in the vehicle after a reasonable
number of attempts. 115 The relief can only be granted after the contract has been consummated and the consumer has been injured. The effectiveness of state 109 Rosmarin, supra note 84, at 1597. “In many cases, a giant ‘AS IS’ statement or a disclaimer clause in bold face and all capital letters disclaiming the . . . implied warranties may
be unfair no matter how large or bold the words are.” Id. 110 See infra notes 134–40 and accompanying text. 111 See id. 112 Rosmarin, supra note 84, at 1602 (“[The NCCUSL’s] power and influence, along with its credibility and that of the ALI, could give a revised Article 2 containing consumer provisions
a strong chance for success.”). 113 New car lemon laws have now been passed in all fifty states and the District of Columbia. The National Consumer Law Center lists each of these laws, organized by state.
J ONATHAN S HELDON & C AROLYN L. C ARTER , N ATIONAL C ONSUMER L AW C ENTER , C ONSUMER W ARRANTY L AW 771 app. F (2d ed. 2001) [hereinafter W ARRANTY M ANUAL ]. There are also compilations of service contract laws and forms that can be used to file a lawsuit for breach of
warranty against a car manufacturer. See id. at 791 app. G, 839 app. K. 114 O HIO R EV . C ODE A NN . §§ 1345.71–1345.78 (West 2003) (Nonconforming New Motor Vehicle Law). 115 O HIO R EV . C ODE A NN . § 1345.72 (West 2003). A consumer is entitled to this remedy if the same defect in the vehicle has been subject to three or more repair attempts in one year, or
if the vehicle has been out of service being repaired for thirty days or more in a year. O HIO R EV . C ODE A NN . § 1345.73 (West 2003). 460 OHIO STATE LAW JOURNAL [Vol. 66:441 lemon laws has been disputed by commentators since the inception of the laws. 116 Lemon laws also commonly only apply to new cars, affording no help to a used
car purchaser. Unfair and Deceptive Acts and Practices (“UDAP”) statutes are also common and can provide a remedy to consumers who are victims of fraudulent
dealings. 117 Like the state lemon laws, these laws also work long after the completion of the contract, meaning that the consumer has already been
victimized. UDAP laws were initially very popular because they provided an
easier cause of action to prove for the consumer than common law fraud. 118 Although these laws are very popular, legislation needs to be aimed at helping the
consumers to bargain before signing the contract, instead of providing relief after
they have already been outmatched in the bargaining context by the car dealers. Because of differing amounts of consumer protection between states, the price of a vehicle does not necessarily reflect the risks that are involved regarding
legal action. 119 Although the UCC has been adopted by all fifty states in some form, there are some major differences between states. There are also a variety of
model consumer protection acts, which adds to the disparity. 120 Different states 116 Some have argued that the passage of state lemon laws may cause manufacturers to improve the quality of their products in the future. See Julian B. Bell III, Comment, Ohio’s
Lemon Law: Ohio Joins the Rest of the Nation in Waging War Against the Automobile Limited
Warranty, 57 U. C IN . L. R EV . 1015, 1034 (1989). Others have argued that lemon laws actually benefit manufacturers by increasing consumer confidence and ultimately prices on cars without
costing the manufacturers much in profits because they are not very helpful to consumers. See
Julie A. Vergeront, A Sour Note: A Look at the Minnesota Lemon Law, 68 M INN . L. R EV . 846, 847 (1984). 117 See generally Anthony Paul Dunbar, Comment, Consumer Protection: The Practical Effectiveness of State Deceptive Trade Practices Legislation, 59 T UL . L. R EV . 427 (1984) (providing an in-depth analysis of UDAP statutes in each of the fifty states). A violation of
Maine’s altered § 2-316 also counts as a violation of the state UDAP law. M E . R EV . S TAT . A NN . tit. 11, § 2-316(5)(a) (West 2003); see also supra note 86 and accompanying text. 118 Diana Curry, Note, The Effect of an “As Is” Clause on a DTPA Cause of Action, 54 B AYLOR L. R EV . 239, 240 (2002) (DTPA is an acronym that is basically synonymous with UDAP.). Proving that the seller had scienter, or knowledge of the deception, and a specific
intent to deceive are two

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