New products typically come with warranties. Those warranties also can include other provisions that affect the consumer’s legal rights such as disclaimers of warranties and arbitration clauses. These days, products often aren’t purchased at a store. Consumers purchase them with the click of a mouse, and they are delivered to the front door. How do the terms of a product warranty come into existence when the buyer never touches the product until they arrive after the purchase? The Eleventh Circuit Court of Appeals addressed this question in Dye v. Tamko Bldg. Products, Inc., Case No. 17-14052 (decided November 2, 2018).
The plaintiffs separately hired contractors to install shingles on their roofs. The contractors purchased the shingles. The wrapping for each package of shingles had printed on it a written warranty that included an arbitration clause and a prohibition on class arbitration. It also required the consumer to give notice within 30 days of discovering any defect in the shingles. It further enjoined the user to “read carefully before opening.” When the plaintiffs noticed roof problems, they filed a class action lawsuit against the product manufacturer. The district court enforced the arbitration agreement on the packaging, and the Court of Appeals affirmed.
The question was whether the parties had formed a contract that included the arbitration clause. The Court held that the parties had. By accepting and using the product with the arbitration provisions on the packaging and not returning the product within the first 30 days, the consumer had accepted the contract terms printed on the packaging of the shingles.
The consumer said they never saw the packaging. The Court held that the homeowners had appointed the contractors as their agents for the purpose of purchasing the shingles. The homeowners were bound by the contract terms on the shingle packaging because their designated agents had accepted the terms of the product warranty by purchasing and installing the shingles.
For online purchases, warranties are sometimes available through separate links or inside the packaging delivered to the home. Under the reasoning of cases such as Dye, the consumer accepts the warranty terms by purchasing, receiving and not returning a product even if they never have noted or read the terms of the written warranty.