What You Need to Know About Contracts’ Statute of Limitations
A new car purchase agreement is a contract between you and a dealer. When disputes arise between buyer and seller they are resolved according to state and federal contract law. One of those laws is the “statute of limitations” – the rule that says how long you have to file a claim after there is a problem.
Michigan says you have four years from the date of the incident. So if you bought a car in June, 2015 that had a defect, you could file the complaint for contract violations as late as June 2019. Other claims like personal injury lawsuits or consumer protection actions may have longer, or shorter statutes of limitations, but anything connect to the contract itself is generally four years.
Dealerships Cut Claims Periods Short
That is, unless your contract says otherwise. Increasingly, new and used car dealerships are using small print to cut consumers’ claims period short. At The Liblang Law Firm, PC, we have noticed a trend in dealers’ purchase agreements. LaFontaine and Feldman/Jay’s Chevrolet, among others, are adding language buried in their contracts that give new car buyers one short year to register their complaints. Here’s the language to watch for:
“Any claim or lawsuit arising out of the purchase or lease of the vehicle against the dealer by the Buyer must be filed no more than 365 days after the date of the delivery of the vehicle.”
What to Do If You See a Short Claims Period
Before you sign a purchase agreement, take a close look for a short claims period. If it is included in your agreement, strike it out and sign your initials next to the line. This shows that you don’t agree to the shortened claim period.
Most dealers aren’t willing to lose a sale over boilerplate language in their contract. They may well accept your strike out and sell you the car anyway. If they won’t, move on. There is probably a reason they aren’t willing to give you the longer deadline.
What Happens If You Miss Your Deadline
A statute of limitations may not seem much, but if you miss your deadline it absolutely ends your claim. Even if you are one day late, the dealership can have your case dismissed and you will get no relief.
This is especially damaging when dealers know that there are problems with your vehicle going in. You may not know that your new used car is a rebuilt wreck, or that the odometer has been rolled back, but the dealership probably does. In most cases it takes a consumer a couple of years full of unexplained car trouble and repeated repairs to discover the dealership’s bad behavior. If your purchase agreement has a short claims period, you may not be able to pin down the problem until it is too late.
When new and used-car buyers sign purchase agreements without taking a close look at the fine print, it can cause problems and cut consumers off from important legal protections. Don’t blindly sign your rights away. Read your purchase agreements carefully – all the way to the end – and take care to strike out any short claims period you find.