Understanding Correction Offers Under California Consumer Legal Remedies Act (“CLRA”)
The California Consumers Legal Remedies Act (CLRA) protects consumers from unfair business practices, including false advertising and intentional misrepresentation. The CLRA gives consumers legal options when they have become the victim of bad business practices.
Buying a car is a common example used to show a potential CLRA violation. If a dealership sells or leases a car they know has structural or mechanical defects and did not tell the purchaser, that business may have acted in violation of the CLRA and the purchaser may have a claim. However, understanding what comes next can lead to confusion. To overcome the legal challenges ahead, you must speak with an experienced California attorney.
What is a reasonable CLRA correction offer?
When a consumer suspects or discovers a CLRA violation, they must send a written notice to the business describing the violation. The business then has 30 days to respond and remedy the situation. Whatever the allegation from the consumer, if the company provides a reasonable correction to repair, replace, or otherwise remedy the situation, the consumer cannot seek additional monetary compensation from the business, but consumer may still pursue non-monetary claims such as asking the court to stop the business from engaging in practices in violation of the CLRA.
Using the car dealership example, if an individual purchased a defective vehicle and then provided written notice to the dealership, the company can provide the purchaser with a reasonable correction offer. This may include allowing the buyer to return the vehicle for a full refund, including any financing and incidental damages.
But correction offers cannot be conditioned upon other terms and conditions. For example, the dealership cannot agree to return the car and refund the purchase price on the condition that the buyer immediately purchases a new car from them. California courts have held this is not a reasonable correction offer.
What if the consumer rejects a reasonable correction offer?
If a business provides a correction offer to the consumer upon notice of an alleged CLRA violation, the consumer must give the correction offer serious consideration. There is no set-in-stone definition of what this entails, and this can cause confusion for consumers.
We know that a consumer in this situation needs to think about the corrective offer and whether they find it reasonable. California courts have said that if a consumer rejects an offer that a court later determines to be reasonable, the consumer’s CLRA claim for monetary damages is barred. If that occurs, that means the consumer will have no recourse for monetary damages, so businesses are strongly urged to proffer a reasonable correction offer. However, the consumer may still pursue non-monetary damages against the business. You should also know that you have legal options under the CLRA.
Your Legal Options
If your business has received a CLRA notice from a consumer complaint, you need to take action. But if you are unsure about what constitutes a reasonable correction offer or how you can rectify the situation for the consumer under the CLRA, you might have questions about what to do next.
That’s when you need to speak with an experienced California lawyer. With an intimate understanding of the CLRA, our legal team can help you find the path forward. To learn more about how we can help you overcome the CLRA challenges you face, contact us today.