I was speaking with another Better Business Bureau colleague, and we were discussing an issue of a new business that opened in the construction industry. Nothing unusual about this, but the owner of the new business was employed by another contractor who went out of business. A complaint was filed against the new business because of the relationship the owner had with his former employer. Many times the new business owner will take on the problem to hopefully create a positive relationship with the customer of the former business. Unfortunately, this sometimes backfires and a hostile relationship develops.
So the question is does the new business owner have any responsibility regarding a warranty for his former employer?
Let’s begin with the original case that the new business owner was an employee of the former business which is no longer doing business. The new owner of this new business didn’t purchase the former business, and he didn’t take on the liabilities, warranties or debt of the now defunct business. This is a totally separate business with no connection with any other business. This owner, therefore, has no responsibility to honor the warranty.
Regardless of the length of time for which the warranty specifies, once the business is no longer in operation, consumers have no other recourse, but to look for another business to affect those repairs or provide those services, and begin afresh with the new business relationship.
Again, we’re only considering the case of a business that has gone out of business, has not transferred ownership or sold the business to another person or group. These bring up other issues when a business is sold, and whether the new business also purchased the warranty obligation. This post is limited to workmanship warranty issues and not manufacturers’ warranties.
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