What is a Warranty?
A warranty is an assurance, given by a seller to a buyer, that is part of the bargain between them. For example, a seller may warrant that:
- A product is free of manufacturing defects.
- A product will perform as claimed.
- A product has certain contents or features.
- A product is fit for its intended use.
- A product or service meets certain standards or specifications.
- A product does not pose unexpected safety hazards.
Warranties may take many forms. Some warranties (such as car warranties) are clearly designated as “warranties.” These often:
- Have specific written terms, conditions and limitations.
- Identify the parts or performance characteristics that are, or are not, warranted.
- Explain what the manufacturer or seller will do if a product or service fails to meet warranty standards.
- Specify when the warranty expires.
- Explain or limit the buyer’s remedies.
- Explain the buyer’s responsibilities, and conditions that may negate the warranty.
Other warranties are less clearly identified as “warranties.” These warranties may arise, as a matter of contract law, because of sales claims or promises made by the seller. Some advertising claims may, in effect, constitute warranties. But mere “puffery” (“we have the best hamburgers in town”) does not create a warranty.
Not all warranties are written, or even specifically stated. In some cases, the law creates “implied warranties” that exist unless the seller clearly disclaims them prior to sale. The facts surrounding a transaction may determine whether a warranty exists.
Buyer’s Action to Enforce the Bargain
If a warranty exists, and the product or service fails to live up to the warranty, the buyer may take private legal action to enforce the bargain. The buyer need not prove that the seller acted negligently or fraudulently, but merely that the goods or services fell short of what the seller promised and the buyer paid for. The buyer may seek appropriate compensation or remedies under contract law. Some warranties spell out (or limit) the remedies available to the buyer.
Wisconsin’s Uniform Commercial Code addresses warranties in the sale and leasing of “goods” (see Wisconsin Statutes chapters 402 and 411). The UCC imposes certain “implied warranties” in sale and leasing contracts, whether or not the seller makes any express warranty. These include, for example:
- Warranty of Title. The seller implicitly warrants good title, free of liens and encumbrances, unless the seller states otherwise.
- Warranty of Merchantability. A “merchant” implicitly warrants that goods are “merchantable” unless the merchant states otherwise. Among other things, this means that the goods are fit for the ordinary purposes for which such goods are used.
- Warranty of Fitness. If the seller has reason to know that the buyer is relying on the seller’s skill or judgment to provide goods that are fit for a particular purpose, the seller implicitly warrants that the goods are fit for that purpose. The seller may make a disclaimer to exclude or limit this warranty.
Written Warranties on Consumer Products
Federal law (15 United States Code 2301-2312) regulates written
warranties on consumer products.
The federal warranty law does not require
a seller to give a written warranty. But if the seller does so, the seller must:
- Identify the warranty as a “full” or “limited” warranty. A warranty must meet certain requirements in order to qualify as a “full” warranty.
- Explain warranty coverage in a single clear and easy-to-read document.
- Make the warranty available where the consumer product is sold, so consumers can read it before buying.
A written consumer product warranty may not:
- Restrict the “implied warranty of merchantability” (see above), except that a “limited” written warranty may limit the duration of an implied warranty.
- Require a consumer to buy other products or services in order to receive warranty protection.
- Contain deceptive or misleading terms.
The federal law makes it easier for consumers to take unresolved warranty problems to court. A consumer who wins in court may recover court costs and reasonable attorneys’ fees. But the law also encourages parties to use alternative dispute resolution mechanisms before going to court.
The Federal Trade Commission administers the federal warranty law, and has adopted rules to implement the law. For more information, click here: http:www.ftc.gov/bcp/conline/pubs/buspubs/warranty.