ACHRNEWS

Legal Forum: Replacing Obsolete Parts - What Is The Liability?

November 3, 2002
Question:

Is there a liability involved when an obsolete part is replaced? For example, a natural gas valve is obsolete and needs to be replaced. The exact part cannot be found anywhere. It is not listed in cross-references. The company that manufactured it is out of business and/or doesn’t list the part in its inventory.

The technician takes it upon himself to replace the part with what to the best of his knowledge is a safe replacement. Is he legally stepping over the line? Does he need permission to install or replace the part from the company that manufactured the obsolete part? Many times this is a no heat call in the dead of winter at night, and he has to make a decision.

Answer:

The answer to this question depends on the legal obligations that the contractor has assumed or that are imposed on the contractor by law. As in any dealings with a customer, the contractor can assume legal obligations by entering into a contract with the customer, e.g., through a service agreement and through terms and conditions set forth in a purchase order or similar document.

These obligations may be in the form of a warranty with regard to parts or services provided to the customer. In such a situation, the contractor’s liability for replacing an obsolete part may depend in part on the terms of any such agreement.

In the absence of any written warranties or similar agreements, the liability of a contractor would normally be governed by state law. In some states (e.g., Maryland), the provision of services such as repairs to a home furnace would be governed by the state’s unfair or deceptive trade practices act.

Such laws may contain restrictions that could be viewed as applying to the provision of a replacement part, such as the failure to state a “material fact” (i.e., one that would be considered significant by the ordinary consumer in buying the services of the contractor) if the omission of the fact deceives or would tend to deceive the consumer; or a general prohibition on making representations that have the tendency to mislead a consumer.

Such provisions could come into play if the individual conducting the repairs were to use a replacement part while leaving the customer with the impression that a failed part had been replaced with an identical part supplied by the manufacturer.

The obvious way to address this type of potential liability is full disclosure to the customer (i.e., let the customer know that the part that has failed and needs to be replaced is obsolete and that replacing the failed part with the same part is therefore not possible).

You should also consider informing the customer that the only available option (aside from purchasing a new furnace) is to use a different kind of replacement part. If such disclosures are made, the customer will have a much more difficult time arguing that he or she has been deceived.

Perhaps the more significant source of potential liability in this type of situation derives from the law of negligence, which generally requires a provider of goods and services such as an HVAC company to exercise a reasonable degree of care in performing repairs that takes into account all the circumstances under which the company performs the repairs.

In some states, a judge or jury may look to industry customs or practices or the steps that a reasonably competent person in the industry would take under the circumstances in determining whether a company making repairs was negligent.

Thus, a company that replaces an obsolete part could be held liable for negligence if the replacement part proves to be unsuitable and injury or damage occurs as a result; particularly if the judge or jury determines that a reasonable person in the position of the individual conducting the repairs should have foreseen that the replacement part would prove to be inadequate.

Here again, one way to try to minimize any potential liability is through full disclosure to the customer. While a judge or jury may ultimately decide that a customer was in the position of having to rely on the judgment of the contractor with respect to the use of replacement parts, if the repairman tells the customer that the failed part is obsolete and discusses with the customer the potential risks of using a particular replacement part and lets the customer decide whether to proceed, the company will be in a better position to defend itself against possible claims of negligence if something goes wrong.

It goes without saying that skill, experience, and the exercise of good judgment in such repair situations will also go a long way toward minimizing the potential for negligence claims.

Jackson is an attorney with the Washington, DC, law firm of Kelley, Drye & Warren, LLP.

Note: This feature is intended only as a forum for information and general discussion. Any information provided is not in the nature of legal representation and is not intended to establish any attorney-client relationship. Any information provided should not be relied on without consulting an attorney to discuss the specific facts relevant to your situation.

Publication date: 11/04/2002