What Is The Difference Between A Breach Of Contract And A Breach Of Warranty In Arizona?

A breach of contract is basically violating contractual terms that both sides agreed to. It could be violating a major term, which would be a major breach, or violating a minor term, which would be a minor breach.

A warranty is a special type of contract where the law has stepped in to provide extra remedies that typically do not exist for normal contracts. An example of this is the Arizona Lemon Law. Very few warranties say, “Hey, we’ll repair your vehicle within a reasonable number of repairs for a reasonable amount of time.” In fact, the majority of them don’t say that at all. Nevertheless, the law steps in and says, “Even if the warranty doesn’t say that, we are going to create this requirement because, otherwise, the warranty may not be worth the paper that’s it’s written on if you keep taking your vehicle to the repair shop over and over again or for long periods of time and it’s still not getting repaired.”

That’s the biggest difference between warranties and regular contracts—the Arizona Lemon Law actually puts additional requirements on warranties to make sure that repairs are done within a reasonable number or repair attempts or amount of time. Otherwise, the consumer is entitled to get their money back or a new vehicle.

The other thing that’s a little bit different about warranties is that a warranty is basically an assurance of quality on a product. While a contract could cover almost any subject, a warranty basically says, “Hey, this is a new product that should be defect-free; if it’s not defect-free, we’ll fix it.” Again, the Lemon Law steps in if that assurance of quality is not lived up to.

How Are Settlement Amounts or Damages for Breach of Warranty Calculated?

There is no specific formula to calculate damages. What it comes down to is basically that you overpaid for the product and so you should get some of your money back. The product that you paid for was a new or relatively new warranted product, but you really got something that’s the equivalent of used and rundown.

With that being said, the easiest thing to use as a guidepost would be something like the Kelley Blue Book. See what your product would have cost as a used vehicle (versus what you paid for it as a new vehicle) because that’s really the equivalent of what you got.

Furthermore, a consumer, as the owner of property, is permitted to testify to the value of that property to them. Then, it’s up to a decision-maker whether that testimony appears to be reasonable under the circumstances, but you are entitled to have your opinion on that.

When calculating damages, it’s helpful to conduct a hindsight inquiry. You’re imagining that you’re going back to the time of purchase: what should the vehicle have cost if all of the defects and repair problems and time in the repair shop were foreseeable? It varies case by case, depending on how severe the vehicle’s defect and repair history is.

The way loss of use is determined is by the fair rental value of the product for the time it would have been used. For cars, that’s usually 100% of their repair time because you use your car every day, but if it’s an RV or an off-road vehicle that you only use part-time, it would just depend on the amount of time that you would have used it. There’s no specific formula for aggravation and inconvenience; it’s just based on testimony.

For more information on Arizona Lemon Law and Breach of Warranty, a Free Lemon Law Evaluation is your next best step. Please call (480) 237-2744 for Free Lemon Law help today.