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Warranties and You Part II: Express Warranties (Limited & Full)

July 30, 2017

 

 

 

 

 

This is a series about something many people think about all the time when they buy something - what your rights are when things go bad. 

 

Last article, we talked about Implied Warranties, those that are “implied” (not those specifically spoken or written, but are automatically “read into the contract”) when you purchase something.  In a nutshell, we discussed how in almost every state there are two kinds of implied warranties: (1) the Implied Warranty of Merchantability (the air conditioner should … uh … air condition properly) and (2) the Implied Warranty of Fitness for a Particular Purpose (if you ask a salesperson for a cable that works with your DVR, you a relying on their experience to choose the correct one for you, or to admit they aren’t sure). 

 

This article we will talk about Express Warranties … Begin!

 

Disclaimer: The following information does NOT constitute legal advice and is only for general educational purposes.  Each situation is different and specific legal issues usually require additional research and investigation, so do not rely on this article to address a particular legal issue; also the laws change.  So, use this as a starting point to gain a general understanding.  This article, although educational in purpose and substance, nevertheless, might be deemed attorney advertising, and prior results do not guarantee future success.

 

Supplemental Disclaimer: Please be aware this is a very rich field of law and I have attempted to condense these complex concepts into relatively simple explanations - however, many situations can be very tricky - please do *not* rely on this summary alone to litigate or fight with a business (or defend yourself from a consumer); use it only as a jump-off point for further research.

 

I.  Express Warranties: Limited v. Full (Generally)

 

Just like with Implied Warranties, there are also two kinds of Express Warranties (but they are called different things): An Express “Limited” Warranty and an Express “Full” Warranty.  You might think it’s easier to start explaining with the smaller “limited” one first, but you would be wrong, because there is a trick in a law to define things by what they are not.  In other words, the law is going to tell what you what an Express Full Warranty is first, and then say anything that isn’t is an Express Limited Warranty. 

 

Confused? Don’t worry, it’s about to get worse for a minute, because I’m going to bore you with the history behind this first.  Why? Because if you understand the reason it’s set up this way, you’ll have no trouble remembering and understanding the reasons these two are different and why they work they way they do.

 

II.  Snake Oil Salesman & Congress Acts (about a 100 years later)

(a.k.a. Magnuson Moss Warranty Act of 1975) [1]

 

Historical Background: Once upon a time, in the early days of the country, “snake oil salesman” and other purveyors of false promises and half truths plagued and afflicted the common person with their lies and misinformation.[2]  Alas, as late as the 1960s, after intense study, the federal government came to the conclusion that manufacturers of a wide range of consumer products provided warranties that were lengthy and difficult to understand.[3]

 

MMWA: Then, in 1975, Congress took federal action to standardize the type of information available to consumers to make informed choices by passing the Magnuson Moss Warranty Act of 1975.[4]  We are going to call this “MMWA” from now on, but just remember it has nothing to do with the much cooler sounding “Mixed Martial Arts” or anything like that.  Warren G. Magnuson was a United States Senator from the State of Washington and John E. Moss was a Congressman (i.e. House of Representatives) from California.[5] The purpose of the MMWA was to "to improve the adequacy of information available to consumers, prevent deception, and improve competition in the marketing of consumer products" and included fourteen points of possible information to be required by the Federal Trade Commission.[6]

 

Importance: The take away here is that Congress was interested in making warranties clearer and standardizing them so that consumers could compare one warranty with another to judge if two similarly priced or qualitative products otherwise had the same or different warranties.  The purpose was *not* to guarantee a warranty in the first place; it’s all about putting correct information in the consumer’s hands.  The MMWA basically codified the concept of “Express Warranties” and divided them into two groups: Express Full Warranties and Express Limited Warranties.

 

Oral vs. Written: Oh, one final thing.  A business or factory can give you an Express Warranty either orally or in writing … but … the MMWA provisions (everything below) only applies to *written*[7] warranties.  There may be other laws that apply to oral express warranties but we’ll cover them some other time.

 

III.  Full Warranties

 

Alright, so what is an Express Full Warranty?

 

Notice to the Consumer: First off, for any *consumer* (not business to business) *product* (not services)[8] that a business offers a *written* warranty,[9] that costs more than $10 (excluding tax), the business is supposed to title such a written warranty as either an "Express" “Full” or "Express" “Limited” warranty.[10]  What makes either of these “Express” in the first place? They aren’t “Implied” - rather, the store (or factory) is specifically saying there is some kind of warranty.  Implied Warranties, remember, are just kinda assumed to exist - automatically “read into” your purchase of the product.  Express Warranties exist when the store or factory tells you *something* is definitely protected by a warranty.

 

Five Conditions: If an Express warranty meets *ALL* *FIVE* of the following, it’s an Express  “Full” Warranty:[11]

 

(1) the duration of any Implied Warranties are *not* limited (yes, you can have both Implied and Express Warranties; so if you have a written warranty you also get guarantees of the Implied Warranties, yes!); and

 

(2) warranty service covers everyone who owns the product during the warranty period; so subsequent purchasers are covered (however, there are no minimums of warranty period); and

 

(3) warranty service is free of charge, including returning the product or removing and reinstalling the product when necessary; and

 

(4) at the consumer’s choice, the business provides either a replacement or - a full refund if, after a reasonable number of tries, the business cannot repair the warranted product; and finally

 

(5) consumers are not required to perform any duty as a precondition for receiving service, except contacting the business that the product needs to be fixed - that is unless the business can demonstrate special circumstances dictating that the required duty is reasonable.

 

So, to recap, if all five conditions are met by the business to the consumer, the warranty is written, and it’s a consumer product, then it is an Express Warranty of the “Full” kind or what people just often call a “Full Warranty.” 

 

IV.  Limited Warranties & “Multiple” Warranties

 

Limited Warranty:[12] An Express Limited Warranty is … get this … anything, not a Full Warranty, that is expressly given orally or in writing.  Huh? Let’s say the business imposes just one condition on its product that violates one of the above five factors - it could be that, oh I don’t know, maybe the business limits the duration of one of the implied warranties ... or only offers a replacement but not a full refund to the consumer, etc.  In any of these cases, the business does not meet ALL FIVE CONDITIONS of a Full Warranty - so the business is providing only a Limited Express Warranty.

 

Multiple Warranty: Supposing a warranty has different provisions, like an conditioner where the motor and main superstructure warranty meets all five conditions but the air conditioner filters are only warranted to the original purchaser.  Then this Express Warranty has elements that are Full and other elements that are Limited (which is ok to have different warranties on different parts)[13] - so as a whole, the vacuum cleaner is sold with “Multiple Warranties.”

 

V.  Other General Prohibitions

of the Magnuson-Moss Warranty Act

 

Does MMWA do anything else? Yes, the MMWA prohibits businesses from doing three other things:

 

1.  Implied Warranties Extra Rules: If the MMWA applies, the factory or merchant cannot limit the Implied Warranties.

 

I’m confused: An Implied Warranty is never actually mentioned specifically - at least in writing.  Why? It’s *implied*.  When you buy an air conditioner, you know, you just sorta expect it to work properly.  Period.  You don’t think a major retailer is just going to sell you a piece of junk (at least not anymore usually).  So, the warranty is “Implied” - unless - the business “disclaims” “limits” or “modifies” it.

 

Exception: If the business offered the consumer a written Express  *Limited* Warranty, then the business also can disclaim, limit or modify any Implied Warranties.

 

2.  “Tie-In” Sales Generally Prohibited:[14] A “Tie-In” sale requires a consumer to buy yet another product (or perhaps subscribe to service) from a *particular* company to keep their warranty coverage (i.e. the Major Retailer Inc. promises to warranty the air conditioner you bought from them, but only if you service it regularly with ACME parts).

 

Exception #1: The business can require the use of certain specific parts of services from a specific company, *IF* that company provides the service for free.

 

Exception #2: The business can requires the use of a specific type of part, caliber or quality or parts, or services, *IF* you can get that part or service from *any* company (however, if only company provides it, that may or may not be a valid requirement).

 

Exception #3: Inferior parts or service might void a consumer’s warranty.

 

Exception #4: The Federal Trade Commission can grant a company a specific waiver for their requirement of servicing by a particular company for a fee (for instance, ACME claims it’s the only company that can sufficiently provide the maintenance to your special product, and that they cannot reasonably be expected to provide it for free).

 

3.  Warranties Cannot Be Deceptive: Generally any kind of misleading or false warranty language would be prohibited by this law. 

 

VI.  Any Other Catch?

 

The MMWA doesn’t do certain things:

 

1.  No Warranties are Required at All: The MMWA does *not* require stores to provide an Express Warranty (or an Implied Warranty) - that’s right, you STILL are *not* entitled to a warranty by a matter of law.  However, if the business provides one they must comply with the legal stuff above if they want to call it a “Full Warranty” or they can do what they want (within limits) but only call it a “Limited Warranty.”

 

2.  MMWA Only Applies to Written Warranties: Oral promises by the store or factory aren’t covered by this law.  Again, you can have oral warranties (the store owner *says* they will warranty certain things) but those spoken promises are *not* covered by the MMWA.

 

3.  The MMWA Only Covers Goods Not Services: If you buy a thing you can touch and feel (i.e. a garden hose), it might be covered by MMWA, but gardening services definitely are not covered.

 

4.  Re-Sales: The MMWA does not apply to re-sales of goods, nor to “commercial” purchases, i.e. business to business is not covered here (to clarify: the original warranty must apply to re-sales to be a “Full Warranty” but when the consumer re-sells to another consumer, the MMWA does *not* apply to whatever promises the *first* consumer says).

 

VII.  Limited & Full Warranties Final Thoughts

 

So, let’s see how this works for a minute:

 

Example #1: So, if Salesperson A sells crappy stuff at a cheap bargain, and you KNOW it’s kinda substandard, and there’s no Express Warranty (and the salesperson disclaimed all Limited Warranties), that’s up to you whether you buy.  The MMWA doesn’t apply and doesn’t affect either of you because there are no warranties and none are required.

 

Example #2: If Salesperson B sells something that looks ok and is a bit cheaper than Salesperson C and they both have warranties, the law tries to make their warranties as clear as possible so you can compare.  Because of the law, theoretically, you should have no trouble comparing the warranty if something goes wrong.  Product B might be cheaper because Salesperson B is a better businessperson and knows how to lower their costs.  Or Product B might be cheaper because its warranty is less useful than Product C’s warranty - this law will help you compare.

 

Why are there exceptions like these? And why aren’t warranties guaranteed in the first place? What gives? Doesn’t Congress want you to be protected and stuff from evil merchants? Yes and no.  Congress wants you to have adequate information to make a choice.  The choice is up to you.  That’s the essence of the free market.  And that’s most of what the MMWA does by providing Limited and Full Warranties, to make your choices clearer, so you can make good choices and own the consequences of your own smart (or unwise) actions.

 

More later on how warranty information is disclosed, consumer remedies and commercial purchases.


Caveat Emptor![15]

 

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Hyperlinks Enabled! Try them!

 

[1] 15 USC 2301 et seq.; 16 CFR 700 et. Seq.

 

[2] https://en.wikipedia.org/wiki/Snake_oil.

 

[3] “The Magnuson-Moss Warranty Act, the Federal Arbitration Act, and the Future of Consumer Protection” by Jonathan D. Grossberg, Cornell Law Review, Volume 93, Issue 3 (March 2008), p.662.

 

[4] “The Magnuson-Moss Warranty Act, the Federal Arbitration Act, and the Future of Consumer Protection” by Jonathan D. Grossberg, Cornell Law Review, Volume 93, Issue 3 (March 2008), p.662.

 

[5] https://en.wikipedia.org/wiki/Magnuson%E2%80%93Moss_Warranty_Act.

 

[6] “The Magnuson-Moss Warranty Act, the Federal Arbitration Act, and the Future of Consumer Protection” by Jonathan D. Grossberg, Cornell Law Review, Volume 93, Issue 3 (March 2008), p.662.

 

[7] 16 CFR 700.3.

 

[8] 16 CFR 700.1.

 

[9] 16 CFR 700.3.

 

[10] 16 CFR 700.6.

 

[11] 15 USC 2304.

 

[12] 15 USC 2303.

 

[13] 15 USC 2305.

 

[14] 15 USC 2302; 16 CFR 700.10.

 

[15] https://en.wikipedia.org/wiki/Caveat_emptor.

 

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