Warranties – Chp 24

1. Warranties – Chp24 • Definition: promise or guarantee made by a seller about the quality or performance of goods for sale. It is a contract between a seller and buyer. • Understanding a warranty • * May state what the seller will do to remedy a problem. • * If seller does not live up to the promises in the warranty, the contract has been breached.

2. Warranties – Chp24 Things to consider when comparing warranties: Duration Scope – what parts or problems are covered/excluded Remedy – what do you get under the warranty and what must you do to get the remedy Check the states warranty laws, you may get more rights than are listed in a warranty.ie: Washington statement on buying used cars

3. Express Warranties • Express Warranty • Definition: Warranties are created by statements of fact. Not everything someone says is an express warranty. • Puffing is when someone is giving an opinion or an obvious exaggeration, or what is considered “sales talk” • written, oral, or by demonstration that concerns the quality or performance of goods offered for sale that becomes a part of the bargain • ie: sales person says, “This TV will not need any repairs • for five years,” • or You purchase a vacuum cleaner after seeing a demonstration • of it picking up dirt • these are considered an express warranties

4. Express Warranties • Best to have warranty in writing, very hard to prove a oral or demonstration warranty. • Written warranties must include exactly what is included and what is not. • Magnuson-Moss Warranty Act– requires that written warranties (does not apply if items that cost $15 or less) • disclose all the essential terms and conditions in a single document • be stated in simple and easy-to-read language • be made available to the consumer before the sale

5. Express Warranties • Magnuson-Moss Warranty Act– cont. • The act labels warranties as either full or limited. • Full Warranties: • Defective product will be fixed or replaced at no cost, including removal and reinstallation, if necessary. • Consumer will not have to do anything unreasonable (shipping a large item) to get the warranty service. • Product will be fixed within a reasonable time after the consumer complains. • If the product cannot be fixed after reasonable number of attempts, the consumer can get a refund or a replacement. • Warranty applies to anyone who owns the product during the warranty period, not just the first purchaser.

6. Express Warranties • Magnuson-Moss Warranty Act– cont. • The act labels warranties as either full or limited. • Limited Warranties • Warranties that include protection that is less than what is detailed in a full warranty. Usually will cover certain parts or some defects but not others. ie: cost of new parts is covered but not the labor involved in fixing the problem

7. Implied Warranties • Definition: unwritten promise created by law, that a product will do what it is supposed to do. • Basically the law requires products to meet certain minimum standards of quality and performance, even without an express warranty • Only applies to products sold by authentic dealers of that product.

8. Implied Warranties • Types of Implied Warranties • Warranty of Merchantability- promise that the item sold is of at least average quality for that type of item. ie: a radio must play, freezer must keep food frozen • Warranty of fitness for a particular purpose- when a consumer tells a seller before buying an item that it is needed for a specific purpose or will be used in a certain way- salesperson knowing this is giving the implication that the product will perform for that purpose • Warranty of title- seller’s promise that he or she owns the item being offered for sale

9. Disclaimers • Disclaimers are an attempt to limit the seller’s responsibility should anything go wrong with a product. • Statements such as “with all faults” or “as is” are a sellers disclaiming of the implied warranty of merchantability. Must be in writing and easily seen by the consumer