Warranty Laws and the Magnuson-Moss Warranty Act

If you own a product with a written warranty, understanding the Magnuson-Moss Act can help you detect unfair terms. You may also want to know how this law applies to a warranty claim if an item falls short of its promises.

Passed by Congress in 1975, the Magnuson-Moss Act is the federal law that governs consumer product warranties. Manufacturers and sellers must provide consumers with clear details about warranty coverage.

The Magnuson-Moss Act affects the rights of consumers and the obligations of businesses (the warrantors). The Act promotes resolving disputes informally but also makes it easier for consumers to seek a remedy for breach of warranty in court.

What the Magnuson-Moss Warranty Act Covers

The Act covers warranties for most types of consumer products, as long as the seller or manufacturer made explicit guarantees in writing. Merchants who offer written warranties and service contracts must disclose and describe their terms.

The Magnuson-Moss Act doesn't require manufacturers or sellers to provide written warranties. Express warranties are optional for businesses. A product without any written warranty might still have implied warranty coverage under state laws.

Excluded Purchases

The Act applies only to consumer products, so it doesn't cover warranties for the following:

• Services
• Products sold for resale
• Products for commercial use

With some exceptions, this federal warranty law only applies to tangible property for personal or household purposes.

For example, the Act covers most car sales because they often have written warranties. A car is a tangible item, and its main purpose is personal transportation. This Act is known as the federal lemon law since it protects consumers with defective vehicles.

Requirements of the Magnuson-Moss Act

The Magnuson-Moss Act specifies many requirements for warrantors. Congress also 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:

• Warrantors must describe the warranty as either a limited or full warranty.
• Warrantors must state certain information (listed in 15 U.S.C. § 2302) about the warranty coverage in a single, clear, and easily readable document.
• Warrantors or sellers must ensure the 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.

The Magnuson-Moss Act Bans Certain Warranty Terms

Businesses must avoid certain missteps when advertising products and creating warranties. As a customer, you may encounter one or more of these issues. There may be exceptions to these rules.

No Disclaimer of Implied Warranties

The Act prohibits anyone who offers a written warranty from disclaiming or modifying implied warranties. No matter how narrowly written the warranty is, you'll always receive basic protection from the implied warranty of merchantability.

This law allows a seller to disclaim an implied warranty if the manufacturer already offers a written one. The seller must give you copies of the manufacturer's written warranty.

For example, you might buy a name-brand appliance from a local store. If the store doesn't offer its own written warranty but the name-brand company does, the store can avoid implied warranty obligations. You would have to contact the name-brand company for repairs or replacements.

No Modification of Implied Warranties

In most cases, sellers can't use their warranties to override the legal obligations of implied warranties. However, businesses can modify implied warranties in one specific scenario.

If a warrantor offers a limited written warranty, it can change the duration of the implied warranty to match the limited warranty period. If the written warranty only covers your purchase for three months, so can the implied warranty.

No Tie-In Sales Requirements

In general, tie-in sales provisions are illegal. A tie-in sales provision requires buying a particular item or service from a specified company to use with your product. This type of provision claims you won't get warranty benefits if you buy a similar thing from a different company.

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 by the Y Maintenance Company, Inc., at your expense, voids this warranty.

A company can argue that it has the only proper replacement parts or service available for an item. The FTC may grant a special waiver for those rare cases.

No Deceptive Warranty Terms

Deceptive or misleading terms in a warranty are prohibited. A seller can't claim that its warranty covers something it doesn't. A warranty promising a service that the warrantor has no intention of providing or can't provide is deceptive and unlawful.

Consumer Disputes and Lawsuits

Under the Magnuson-Moss Act, a breach of warranty violates federal law. This distinction makes it easier to sue a business if it fails to follow the written warranty.

The Act provides the following benefits to consumers during a dispute:

• You can have more control over whether to bring your case to federal or state court. A consumer may take a case to federal court by claiming at least $50,000 in economic damages. This amount is lower than the typical requirement for federal cases.
• You may recover court costs, expenses, and attorneys' fees if you win your case.
• If many consumers share the same problem with a written warranty, they can bring their case to federal court as a class action suit under the Act.

The Act also encourages companies to use informal dispute resolution to address warranty disputes with customers. Through a warranty's terms, businesses can require customers to try arbitration or mediation before going to court. The process must follow the FTC's Dispute Resolution Rule.

Discuss Your Product Warranty Rights

Understanding warranties and the Magnuson-Moss Act can be challenging. You may want to contact a consumer protection attorney if you have a warranty dispute, consequential damages, or need more information about warranty law.