Federal Warranty Law Protects Consumers Who Purchase Products.
Federal consumer protections apply to the sale of consumer products, which is defined as, “any tangible personal property which is distributed in commerce and which is normally used for personal, family or household purposes.”
Much of the Federal Consumer Sales Law can be found in the Uniform Commercial Code (UCC) as well as the Magnuson-Moss Act. Both contribute to the overall body of laws and principles providing for the protection of the consumer in the purchase and sale of consumer goods.
The U.S. Congress enacted the Magnuson-Moss Warranty Act in 1975. The Act establishes three basic rules when a seller-warrantor sells its goods to the consumer.
A seller-warrantor must designate its written warranty as either “full” or “limited.”
A seller-warrantor must state certain specified information about the coverage of the warranty in writing and in clear and easy-to read language.
A seller-warrantor must ensure that warranties are physically present where the consumer products are sold so that consumers can read them before buying.
While states may enact their own consumer protection and warranty laws, the federal law ensures a mandatory minimum level of consumer protection. However, states are free to expand consumer protections but are prohibited from providing less protection.
Duration of Warranty
Most consumers believe that the most important part of a warranty is it’s duration. That is, the specific time period under which a claim may be made under the terms of the warranty.
While duration of the warranty is certainly important to consider, it is not the controlling issue when it comes to consumer protection.
Full Disclosure Of Warranty
Federal consumer protection laws require that if the manufacturer or secondary seller of the product chooses to offer a written warranty, the terms of that warranty must be fully and legally disclosed to the consumer.
Written, Limited And Implied Warranties
A warranty may be written (full or limited) or implied. If the seller breaches the warranty, the consumer is entitled to sue the seller for damages and if the consumer prevails, is allowed to collect attorney fees.
Federal law requires that any written warranty must use simple and plain language. The written warranty must also state whether it is a “full” or “limited” warranty.
If a warranty limits or excludes any form of coverage, the warranty, and its limits or exclusions must be presented to the consumer prior to the sale in clear and unambiguous language. If not, the exclusions will not be enforceable.
The promise that the seller is offering a “full warranty” on its product creates consumer value and therefore this added value must mean what it implies.
A full warranty must mean the seller promises to repair or replace the product or, if it cannot be repaired or replaced, the seller must promptly refund the full purchase price to the consumer.
A seller that represents the product carries a “full warranty” cannot later impose unreasonable limits to that warranty.
Full Disclosure On Limiting Damages In Expressed Warranties
A seller of a product offering a full warranty is permitted to exclude or limit being held legally responsible for damages arising out of the use of the product sold to the consumer so long as the warranty discloses this fact on the face of the warranty in an obvious and conspicuous manner. Such disclosure cannot be buried in warranty.
Cannot Limit Consumers Damages On Implied Warranties
Federal law provides added protection to consumers through the use of implied warranties. Specifically, what is known as the implied warranty of merchantability and fitness for a particular purpose, which legally translates to mean, what the reasonable consumer believed was one of the intended purposes of the product.
Specifically, certain warranties, even if not expressed are so obvious to a consumer’s reasonable expectation as to what they had purchased, that no disclaimer or exclusion will exonerate the seller from liability. Instead the warranty, as a matter of law, is implied by the very fact the product was purchased.
For example, a consumer who purchases a treadmill has a reasonable expectation that the treadmill will not, without warning, unexpectedly and suddenly speed-up, thereby causing the consumer to be thrown off the machine.
Under these circumstances the consumer is permitted to pursue a legal action against the seller and manufacturer of the product based on the legal theories the product was defective in design and warnings. It makes not difference if the person injured was not the initial purchaser of the product.
For example, if your neighbor used the treadmill and was injured by a sudden and unexpected change in speed, your neighbor would be able to sue the retail seller as well as the manufacturer. And if you knew of the danger, but did not warn your neighbor, it is possible in most states that you would be subject to liability under theory theory of negligence.
This is true even if the treadmill was not purchased new.
Excluding Coverage Language Must Not Be Ambiguous
Should the language in a warranty exclude coverage and that language is unclear or is subject to interpretation, the law requires that the court find in favor of coverage for the consumer.