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Magnusson-Moss Warranty Act

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FlasherZ

Sig Model S + Sig Model X + Model 3 Resv
Jun 21, 2012
7,030
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But I or a qualified mechanic can do that service and Tesla cannot void my warranty unless I or they broke something while doing the service.
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As for Tesla and contract law, getting operational and support stuff like this wrong is par for the course for Tech Startups. Make the product as cool as possible and get it out the door as quick as possible is the only thing they care about. All that other ops/support stuff can wait until they are successful and have time and money. That's been my experience anyway.

It was directed more toward the assertions by the lay people that Tesla has no idea what it's doing and will clearly be sued off the face of the earth. M-M is basic contracts and warranty 101. They have it covered, I'm sure.

On the first part, you're correct - you can't have sales tie-ins as a condition of warranty. Other consumer protection laws (*not* M-M) require automotive manufacturers (inc. Tesla) to make available maintenance procedures and training for completing them. However, Tesla CAN dictate that certain maintenance items be performed by a qualified person, and then place the burden of proof upon you (the owner) or your agent to prove qualification -- Tesla will not have to prove disqualification. So expect an uphill battle trying to convince any court or jury (if you can past the matter-of-law elements) that any joe-blow SAE trained ICE mechanic is qualified to maintain a Model S. In the first year, it practical terms it means you will have to use Tesla's service.
 
For people talking about the legal trouble Tesla will get into, first be clear Tesla provides a LIMITED warranty (like 99.9% of manufacturers today), not a full warranty, so it does not have to abide by the terms of the Magnuson–Moss Warranty Act.

I know nothing of this law, and had only seen the warranty after you linked it (always ignored that thread, thought it was just "what if" speculation), but I did see this on page 10 of the PDF:

The Magnuson-Moss Warranty Act is the federal law which governs this New Vehicle Limited Warranty.

so not sure if that means it DOES apply to their warranty or not.
 
I know nothing of this law, and had only seen the warranty after you linked it (always ignored that thread, thought it was just "what if" speculation), but I did see this on page 10 of the PDF:
so not sure if that means it DOES apply to their warranty or not.
I probably should clarify, I'm talking about the stricter provisions of the law, which a warranty would have to meet to be considered a "full" warranty (see the list in the below article):
http://en.wikipedia.org/wiki/Magnuson–Moss_Warranty_Act
A "limited" warranty is still governed by the act, but it does not have to meet those terms (the manufacturer just has to make it very clear that the warranty is a "limited" one), which is why Tesla's warranty is not illegal as some have claimed in this tread.

Under a "full" warranty, Tesla can't set any preconditions (including the annual service requirement) as a terms for the warranty. However, Tesla's warranty is a "limited" warranty so they CAN set such preconditions.

As for the rest of the law, the point of contention is basically whether it is legal for Tesla to have an essential monopoly on servicing the car under the Act. That is legal under the law (otherwise there would be no need to push for the "right to repair" act). Tesla can't force you to use only Tesla branded parts or service at a Tesla location or void your warranty specifically because service was done by a different party than Tesla, but no part of the law says that the manufacturer is obligated to ensure that third parties can service the product. So it's totally legal for them to void your warranty for not performing proper maintenance, even if essentially they are the only ones who can do so properly. Specially, this is the "tie-in sales" provision of the law:
http://business.ftc.gov/documents/bus01-businesspersons-guide-federal-warranty-law#Magnuson-Moss

If you read the "legal" example in the "tie-in sales" part of that link, you will see that Tesla's statement on their warranty (which I quoted in my previous comment) reads almost exactly the same.
 
Not going to debate the law here, but just so it's understood, you should probably read Magnusson-Moss if you want to try and claim it.
Obviously, I DID read it. Did you?

Section 2302(c), which applies to limited warranties as well as full warranties:
(c) Prohibition on conditions for written or implied warranty; waiver by Commission.

No warrantor of a consumer product may condition his written or implied warranty of such product on the consumer's using, in connection with such product, any article or service (other than article or service provided without charge under the terms of the warranty) which is identified by brand, trade, or corporate name; except that the prohibition of this subsection may be waived by the Commission if -

(1) the warrantor satisfies the Commission that the warranted product will function properly only if the article or service so identified is used in connection with the warranted product, and

(2) the Commission finds that such a waiver is in the public interest. The Commission shall identify in the Federal Register, and permit public comment on, all applications for waiver of the prohibition of this subsection, and shall publish in the Federal Register its disposition of any such application, including the reasons therefor.

The warranty on the Tesla Model S is a new vehicle _limited_ warranty and is "conspicuously designated" as such, therefore it is not subject to the federal definition of a "full warranty".
Irrelevant.

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Tesla isn't stupid. You don't spend $700M to develop a vehicle then fail basic contract and warranty law, especially given the new nature of the technology beneath.
That's a stupid assumption. We know for a fact that Tesla is violating federal copyright law, with civil penalties of $25,000 per car sold. I've been polite in not reporting it to the copyright holders yet. We know for a fact that Tesla violated Washington State deposit escrow law until they were caught. (EDIT: I withdraw the foregoing statement; I would have to recheck Tesla's annual reports, it may be the case that Tesla complied with Washington state deposit escrow law from day one.) We know for a fact that Tesla hasn't bothered to research the motor vehicle manufacturer and dealer laws in half the states in the US (it's right there in their annual report).

I think it's actually quite clear that Tesla's general policy is to not even research the law until they get caught. This does save money. To be clear, I think that Tesla takes a different approach when it comes to *car safety* laws, but when it comes to other laws, their record is clear.

I'm sure they have their i's dotted and t's crossed and zero's slashed, and they even use the little stroke through the center of the "7" to distinguish it from the "1".
Given the examples above, I'm 100% sure they don't.

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As for Tesla and contract law, getting operational and support stuff like this wrong is par for the course for Tech Startups. Make the product as cool as possible and get it out the door as quick as possible is the only thing they care about. All that other ops/support stuff can wait until they are successful and have time and money. That's been my experience anyway.

Probably true, which is why I'm optimistic about Tesla. Still, now is the time for them to start getting this stuff right...

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On the first part, you're correct - you can't have sales tie-ins as a condition of warranty. Other consumer protection laws (*not* M-M) require automotive manufacturers (inc. Tesla) to make available maintenance procedures and training for completing them.
Right. (It would be interesting to see which laws.) Has Tesla done so yet? We await the manuals.

However, Tesla CAN dictate that certain maintenance items be performed by a qualified person, and then place the burden of proof upon you (the owner) or your agent to prove qualification -- Tesla will not have to prove disqualification.
Maybe some people would have trouble proving that, but some of us are anal-retentive perfectionists who keep records of everything, and would have no trouble whatsoever proving it.

Except, of course, for Tesla's failure to specify maintenance procedures.

So expect an uphill battle trying to convince any court or jury (if you can past the matter-of-law elements) that any joe-blow SAE trained ICE mechanic is qualified to maintain a Model S. In the first year, it practical terms it means you will have to use Tesla's service.

This is, as I say, dancing on the border of violating federal law. It's nowhere near as cut-and-dried a case as the copyright license violations, of course.

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My major problem with this whole deal is not so much the $600 per se, but the fact that the cost of this thing keeps rising seemingly monthly for the buyer.
I add this up much more conservatively, but still, the price of the car is
49,900 + 7500 (no we don't all get to use the tax credit) + 990 (mandatory) + 180 (mandatory) = $58,570 before tax.
And now, we find that they will try not to honor the warranty unless you spend an extra $600 (absolutely minimum, assuming that they actually provide manuals and training after the first year):
= $59,170 before tax.

The advertised price is a fake. Luckily, I *expected* it to be a fake from day one, because every car company pulls this garbage. But still.

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I've read a bunch of pages on this thread, but I'm still looking for some clarity on the situation.

Does the service plan have any impact on warranty?
Legally, no, because for it to have an impact legally would be a violation of federal law.

In practice, Tesla agents have repeatedly been signalling that they intend not to honor the warranty if you don't get Tesla service. This is scummy behavior.

Other than brake pads and wipers, does purchasing the service plan mean that any parts are covered that would not otherwise be covered by the warranty? If so, what are those parts?
Nobody knows.

Does anyone have an idea about what Tesla plans to do with your car for the annual service?
Apparently, if Roadsters are anything to go by, they will go over it from top to bottom in great detail for their own research purposes, and fix anything they find. It sounds quite thorough.

Is there any way to update the firmware in your car without paying for the annual service?
Yes, according to Tesla.

If you don't get the service plan, does that mean that if your car diagnoses something is wrong, that nobody would know? Wouldn't the car somehow tell you that something was wrong even if you didn't pay for the service?
Yes. Anything which the car can self-diagnose will pop up on the touchscreen.

Is there a reason that the poll doesn't include an option of: the plan isn't worth it to me, but this isn't a reservation-cancelling offense ?
The person who originally made the poll didn't think of the option and has asked if mods could add it after the fact.
 
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I just got off the phone with a Tesla Ownership Experience Advocate (TOEA). This was in follow up to me speaking with my configuration consultant yesterday regarding my concerns and lack of understanding regarding the Tesla Service communication (9/10/12). While was the TOEA was not able to answer all of my questions he demonstrated diligence and proactive intent to provide greater clarity on remaining items.
Thanks for the detailed information, this is very helpful.

Based on the discussion, he was able to articulate the following:
• The annual inspection service tech would on average spend 3-4 hours with your vehicle. This would include disassembly of various compartments and access to service-only components of the car. Not equivalent to the typical “29 point inspection”. A full checklist is being researched.
Excellent.

• From the announcement, I was quick to jump onto the disingenuous nature of the replacement parts claim (namely brakes). While it was not confirmed, the TOEA is checking into other items like XENON bulbs, Brake fluid or cooling system flush, etc. A full table of service intervals is being researched.
• My state requires a safety inspection annually (after the first 2 years). This is intended to check if the horn, blinkers, brakes, etc. are all functioning. Our state also requires SMOG testing. This will be confusing for the local independent guy to do, when they can’t locate the gas cap and OBDII port. The TOEA is checking into if this is to be included as part of the stated annual inspection. It would certainly prove more convenient, ensure another purpose for annual interaction and, I believe, provide Tesla owners a better overall experience.
It had better be. New York requires a safety inspection yearly. The maximum fee is $10, which is less than it costs the local shops to *do* the inspection, so they're likely to be fairly obnoxious about it. That had *better* be included in Tesla's annual service.

• The features of System Monitoring and Remote Diagnostics, do actually occur using cellular based (3G) communications (not WIFI). This can occur on your vehicle weather you subscribe to the data package or not. Tesla is enabling this “channel” of radio communication as part of Tesla Service. For me this was value, and a complete missed point in Monday’s announcement.
That's good to know.

.
• We also discussed topics regarding what warranty is invalidated if I fail to service annually. This proves to be a grey area. It sounds like if not appearing for annual service causes a part to fail (e.g. battery cell overheats) than customer liable. If the part is not a service item (e.g. seat motor) and fails it will still be covered.
This makes perfect sense. However, the list of service items needs to be published so that it's possible to have them serviced independently.

Given that on the larger batteries warranty coverage extends beyond 4/50k, I asked for clarity on Tesla Service during years 5, 6, 7. This is being researched.
• It was confirmed that initially no loaner car will be available. However my request for a fleet of loaner Tesla Roadsters will be taken under advisement …

All in all, a very productive conversation in backing me off the ledge of walking away. Glad I was able to meet this TOEA and look forward to learning the responses on the outstanding items.

I encourage you to also reach out to Tesla directly. I got the impression they are having regular internal meetings/education sessions to respond to this situation. Your input and feedback will help them improve this sticky Tesla Service announcement.

Indeed. I think this situation is something Tesla can fix -- fairly easily, even. I also think the copyright license violations are something Tesla can fix. They just have to actually devote some time from competent staff to actually do such things.
 
The person who said, clearly addressed to me, that I should read the Magnusson-Moss Warranty Act before talking about it? When, of course, I *had*?


(Edit: Moderators have requested editing of this post, for reasons of their own; therefore it has been edited.)

That is behavior which shows a lack of intelligence and a great degree of presumption, and for which that person should apologize.
 
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Mods: Can we move the "copyright" conversations to a new thread in the off-topic section? This thread is for the discussion of Tesla's service plans.

Thanks,
--The Arrogant Idiot

Good idea.

-- The other Arrogant Guy :)

So do you Arrogant Guys think that the discussion that "it looks like Tesla is about to violate the federal warranty regulations" stays? :wink:

Larry
 
Well, apart from fair use considerations, it is not legal to copy and distribute (edit: copyrighted) software absent a license (edit: from the copyright holder). The way the GPL is written is *very straightfoward*; it specifies that the license is conditional on distribution of source. So Tesla is *distributing (edit: distributing copies they have made) without a license*. That is a (civil) infringement of copyright. Pretty straightforward, isn't it? (It takes more to constitute a criminal copyright infringement, but see (edit: title 17) section 506(a)(1)(a) US Code.)

Edit: how do I know that Tesla doesn't have a separate license agreement with the Linux copyright holders? There are, like, 500 of them. (Edit: and they don't coordinate licensing except by agreeing to use the GPL.)

We know from research -- watching bootup and service work on cars -- that Tesla is using the Linux kernel and Busybox in the firmware for both Roadster and Model S. Selling a car containing these constitutes distribution of Linux and Busybox. These pieces of software are both licensed *exclusively* under the Gnu General Public License. We know from people receiving Roadsters and Model S that they have not received "complete corresponding source code" for those two programs corresponding to the exact versions used in the firmware, which is required by the license as a condition of distribution. (Distributing the source code for these is ridiculously easy to do, which is why it's embarassing that they're not doing it.) Accordingly, each car sale consists of an unlicensed copy and distribution of (at least) two copyrighted works. The violation is wilful, given that they've been notified of this more than once. I believe both programs' copyrights have been registered (I should check, I'm not 100% sure about that), which if true makes the statutory penalties absurdly large.

OK, at least I see the possible connection to copyright law now, but let's unpack this a little. You say, "we know..." about the fact that (a) Tesla is using certain software (Linux and Busybox) in both Model S and Roadster, (b) that Roadster and Model S owners haven't received proper copies of the software as per the Gnu GPL, and (c) that Tesla has been notified of this more than once.

Let's assume (a) is true (I'm not a tech guy and would need further proof than watching some videos, but OK), how do you know (b)? Can't many Gnu GPL users satisfy the requirement by offering to send a CD (or web access) to the code? How do you know that offer's not buried in the owner's manual or something? And how do you know that Tesla has been notified of this, such that it would be a "willful" violation?

You seem to have made a lot of leaps of logic and fact to come to the inexorable conclusion that Tesla is violating the law, while I'm pretty confident that, at a minimum, Tesla's lawyers could put up a pretty good fight if anyone actually tried to enforce this against them.

More importantly, Tesla has been selling/distributing Roadsters since 2008, and it's now 4+ years later and this hasn't been an issue, so if it's so obvious that they're violating the law, laches would eventually come into play here for whomever would (now) try to enforce the license.

Again, I don't have nearly enough facts to come to any conclusion about whether there is a copyright violation here or not, but I could ask another hundred (or thousand) questions and still not be 100% sure, and I'm pretty certain you don't have sufficient facts to definitively say what you've been saying. If you have experience with the law you should know that you should never be that confident in your position.
 
So do you Arrogant Guys think that the discussion that "it looks like Tesla is about to violate the federal warranty regulations" stays? :wink:

Larry

I guess so?

I actually think they'll probably "do the right thing" now -- previous information from Tesla was problematic but the most recent information sounds like they're paying more attention now. That's the purpose of being hysterical about such things, incidentally.
 
I will be interested in seeing if anyone uses the Massachusetts Right to Repair law, signed yesterday, to get access to the information and tools needed to diagnose Tesla vehicles. The challenge is that 98% of the parts are unique to the Model S, so even if you learn what broke, you're unlikely to have the part (or, possibly, even the tools) needed for the repair.

My two cents on the pricing: it's a bargain for those living far from a service center, and a stiff price for the rest.
 
I will be interested in seeing if anyone uses the Massachusetts Right to Repair law, signed yesterday, to get access to the information and tools needed to diagnose Tesla vehicles. The challenge is that 98% of the parts are unique to the Model S, so even if you learn what broke, you're unlikely to have the part (or, possibly, even the tools) needed for the repair.

My two cents on the pricing: it's a bargain for those living far from a service center, and a stiff price for the rest.

I'm actually going to buy it, but I would have been happier if it had been part of the price of the car.

I also actually think that Tesla *would qualify* for the exception to the Warranty Act's service-tie-in rules, and I think they should simply have requested the waiver from the FTC.
 
Bad news, folks: Tesla has said in so many words that unless they get an FTC waiver they are violating the Magnusson-Moss Warranty Act:

Quote from George Blankenship, Chief of Nickel-and-Diming Customers:
@DR CHILL: “What will happen to Tesla owners that do not pay for these annual inspections from Tesla? Can they take their car to an independent shop without affecting warranty coverage?”
You will forfeit your warranty if you do not do Annual or 12,500 mile Inspections, when due. You will forfeit your warranty if you take your Model S to an independent shop for vehicle service and/or repairs. Your car needs to be serviced by a current, Tesla Certified mechanic to make sure it is working properly and to maintain the warranty on your car.

This is clearly illegal. By specifying "Tesla Certified" he has specified a branded service, which is *precisely* the form of tie-in which is banned by the Act.

Tesla's lawyers are *incompetent*. Completely incompetent. There are at least three ways they could have retained essentially the same pricing scheme without breaking the law, and -- unless they got that FTC waiver -- they chose the lawbreaking way.
 
FYI, Blankenship confirmed Tesla's probable violation of federal warranty law.

The topic was moved to Off-Topic, so you can go read the quote there. But basically, I was right, the optimists were wrong, Tesla's lawyers are incompetent.