Company Refusing To Honor Lifetime Warranty With Comparable Replacement

Location: Pennsylvania, USA

I purchased an 80-gallon electric water heater in 2005 that came with a lifetime warranty. The unit failed recently. The company initially sent a replacement motherboard that worked intermittently for about a week before failing completely. They now attribute the failure to a sensor and want to replace the entire unit.

They want me to transport the defective unit to a big-box store and use a $670 in-store credit code to purchase a "comparable" replacement.

1. The store credit is to pay for a 50-gallon standard tank to replace our current 80-gallon unit, which we do not consider comparable.

2. When we specifically requested an 80-gallon replacement, they confirmed they do still manufacture 80-gallon units, but only as hybrid heat pump models. They refused to provide one on cost grounds and instead insist that a 50-gallon standard tank is a comparable replacement for our 80-gallon unit. An 80-gallon electric hybrid heat pump hot water heater costs approximately $2,200. Apparently, they do not manufacture standard 80-gallon electric water heaters now due to a quoted “NAECAIII federal law”.

3. They want to reset the warranty from lifetime to roughly 6 years, claiming this defaults to the warranty of the new device. The company acknowledges that this specific water heater we currently have carries a lifetime warranty, but claims "federal law now prohibits" them from offering lifetime warranties. I am currently locating the original warranty documentation. I recognize that the specifics in this warranty documentation will be important.

I know that the opportunity to get a 50-gallon hot water tank for essentially free after 21 years of owning the last one is a position of privilege. However, the lifetime warranty was a significant factor in the original purchase, and I am willing to pursue legal action if it is worth doing in getting the company to honor a comparable replacement (80-gallon tank). The immediate problem is that I need hot water now, well before any legal case would be resolved.

**My questions:**

1. Does accepting their offer constitute a waiver of my remaining warranty rights, or can I accept under protest and still pursue the capacity and warranty issues, potentially legal action? “Under protest” sounds silly, but hopefully you know what I mean.

2. Is the company legally obligated to provide a comparable 80-gallon replacement even if their current product line makes that more expensive?

3. Is this best pursued through Pennsylvania small claims court, a PA Attorney General consumer protection complaint, or something else? The company is headquartered out of Wisconsin.

Thanks for any insight.