What to do if a transmission warranty is not being honored?

I had the transmission rebuilt in my classic car about a year ago and had a 2-year /unlimited miles warranty on parts and labor. My transmission is leaking again, and apparently, the garage that did the work was bought out. The new owners told me that they will not honor my warranty. Is that right? Do I have any legal recourse?

Asked on September 17, 2012 under General Practice, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

You might not have any legal recourse--the new owners of a business are often not obligated to honor the warranties, contracts, etc. of the old business. They would only have to honor the warranty if:

1) The old garage was an LLC or a corporaton, and they bought the LLC or  corporation--the actual legal entity--not just the assets; or

2) They bought the assets of an LLC, corporation, sole proprietorship, or partnership and specifically assumed--or took over--the warranty when they did so.

In my experience, however, when a business is bought, the new owners typically deliberately do it in a way such that they are not bound by the old business's obligations, such as by buying only assets and not taking over or assuming warranties and other contracts.


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