Timing May Be Everything In Breach Of Warranty Claims
Law360, New York ( July 15, 2014, 5:49 PM EDT) -- In recent months, the automotive industry has seen a barrage of recalls and massive warranty campaigns initiated by original equipment manufacturers (OEMs) for a variety of vehicle failure modes and issues. In light of GM's recent high-profile recalls and the resulting negative press that GM received, OEMs seem to be cleaning house by recalling vehicles for longstanding issues in models that have been in production for years. Many of these issues have a lengthy history of consumer complaints, which can be found throughout dealer records and online automotive discussion boards. Undoubtedly, many of these issues also have been the subject of ongoing quality improvement discussions between the OEMs and their suppliers and may even have been the subject of investigations, root cause studies, and cost disputes between the OEMs and their supply base. Now, the downstream suppliers that manufactured the components are understandably concerned that the OEMs will try to point the blame at the them and seek to recover costs for these massive recalls involving hundreds of thousands to millions of vehicles. However, suppliers should bear in mind an important threshold defense that they may have to any attempts by OEMs to recover against them for recall costs arising from issues that the OEMs have known about for years: these breach of warranty claims may be outright barred by the statute of limitations period....
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