Warranty Laws and the Magnuson-Moss Warranty Act

The Magnuson-Moss Warranty Act, passed by Congress in 1975, is the federal law that governs consumer product warranties . The Act requires manufacturers and sellers of consumer products to provide consumers with clear and detailed information about warranty coverage. It affects the rights of consumers and the obligations of warrantors under written warranties. While the Act makes it easier for consumers to seek a remedy for breach of warranty in court, it also promotes resolving disputes informally.

Basics of the Magnuson-Moss Act

The Magnuson-Moss Act doesn't require manufacturers or sellers of consumer products to provide written warranties. Instead, the Act requires manufacturers and sellers who do offer written warranties to clearly disclose and describe the terms of those warranties. The Act applies only to products and not to warranties on services.

Additionally, the Act covers only warranties on consumer products. In other words, it doesn't apply to warranties on products sold for resale or for commercial purposes. With some exceptions, only warranties on tangible property generally used for personal, family, or household purposes are covered.

Requirements of the Magnuson-Moss Act

The Magnuson-Moss Act specifies a number of requirements that warrantors must meet. In addition, Congress directed the Federal Trade Commission (FTC) to adopt rules to cover other requirements. The Act and the FTC Rules provide three basic requirements that apply to either warrantors or sellers:

1. Warrantors must designate or title a written warranty as either "full" or "limited".
2. Warrantors must state certain information about the coverage of the warranty in a single, clear, and easily readable document.
3. Warrantors or sellers must ensure that warranty is available where the warranted consumer product is sold so consumers can read the warranty before buying.

The warranty title requirement applies to all written warranties on consumer products costing more than $10. The disclosure and pre-sale warranty availability requirements apply to all written warranties on consumer products costing more than $15.

Disclaimer or Modification of Implied Warranties

The Act prohibits anyone who offers a written warranty from disclaiming or modifying implied warranties. This means that no matter how narrowly written the warranty is, as a consumer, you'll always receive the basic protection of the implied warranty of merchantability. However, one modification can be made to implied warranties.

If a warrantor offers a "limited" written warranty, the duration of the implied warranty can be restricted to the duration of the limited warranty. Additionally, if a seller sells a product with a written warranty from the product manufacturer, but doesn't provide its own written warranty, the seller can disclaim the implied warranty. The seller, though, must give you copies of any written warranties from the product manufacturer.

"Tie-In Sales" Provisions

In general, tie-in sales provisions are prohibited. A tie-in sales provision requires a purchaser of a warranted product to buy a particular item or service from a specified company to use with the warranted product in order to be eligible to receive the benefits of the warranty. For example, the following illustrates a prohibited tie-in sales provision:

In order to keep your new X Brand Lawnmower warranty in effect, you must use genuine X Brand Lawnmower Blades. Failure to have scheduled maintenance performed, at your expense, by the Y Maintenance Company, Inc., voids this warranty.

Deceptive Warranty Terms

Deceptive or misleading terms contained in a warranty are prohibited. A warranty can't be offered that seems to provide coverage but doesn't. A warranty promising a service that the warrantor has no intention of providing or can't provide is deceptive and unlawful.

Consumer Lawsuits

The Magnuson-Moss Act makes it easier for consumers to sue for breach of warranty by making breach of warranty a violation of federal law. The Act allows the consumer more control over whether a case is heard in federal or state court. A consumer can obtain federal jurisdiction under the Act by claiming at least $50,000 in economic damages, a lower requirement than for typical federal jurisdiction. It also allows prevailing consumers to recover court costs, expenses, and attorneys' fees. Additionally, larger cases involving many consumers can be brought in federal court as a class action suit under the Act.

While the Act makes bringing consumer lawsuits for breach of warranty easier, it encourages companies to use informal dispute resolution to settle warranty disputes with customers. The Act allows warranties to include a provision requiring customers to try to resolve warranty disputes through informal dispute resolution before going to court. However, if a warranty includes such a provision, the dispute resolution process must meet the requirements stated in the FTC's Dispute Resolution Rule.

Next Steps

Understanding warranties and the Magnuson-Moss Act can be challenging. If you are engaged in a warranty dispute or would like more information regarding warranty law, you may want to contact a consumer protection attorney.