ST. PAUL, Minn. (Legal Newsline) -- The Minnesota Court of Appeals has rejected a challenge to a warranty contract in the case of Baker v. Best Buy Stores, LP and Chartis WarrantyGuard, Inc.

The appellants, Corey and Jamie Baker, maintained that Best Buy breached its warranty and that the warranty was fraudulent and deceptive.

The court issued its ruling Feb. 21.

The Bakers bought a television set and a four-year service contract from Best Buy in December 2008. The service contract was effective on the purchase date. The terms said that if the television failed during the duration of the contract, Best Buy would either repair or, at its discretion, replace or provide a voucher for the fair market value.

The television was returned in November 2010 to Best Buy because of a defect. By this time, the manufacturer's initial one-year warranty had expired. Best Buy replaced the television with a comparable model but told appellants that the service contract did not provide coverage for the replacement television. If they wanted a service contract for the replacement television, they would have to purchase a new one -- which they did.

But the appellants sued claiming that the service contract was for four years and not two. Therefore the replacement television should be subject to the remaining two years on the contract.

But the Appeals Court noted that the service contract provided clearly stated "[o]ur obligations under this Plan will be fulfilled in their entirety if we replace your product."

Again, in the "Limits of Liability" paragraph, the contract provided that "[i]n the event ... we replace the product, we shall have satisfied all obligations under the Plan."

The judges rejected the claim that the contract was for insurance not service and it rejected the claim that the contract was unfair because it gave Best Buy sole discretion to terminate the contract by providing a new TV. The Appeals Court said the service contract language was unambiguous provided that the service contract is fulfilled if the television is replaced. It affirmed the trial court's ruling.

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