Magnuson-Moss Warranty Act

A warranty is a type of guarantee that is made by the seller of goods or products, about the good or product. Through a warranty, the seller makes an assurance about the quality of the goods, products, or services that the seller provides. A warranty is useful to a buyer because if the product fails to perform in the way that the buyer believed it would, the seller may be held accountable for this failure.

Generally speaking, there are two types of warranties, each offering differing levels of protections and rights:

1. Express Warranties: Express warranties are created by the overt words or actions of a seller. An express warranty can be created by:
   • A promise made by the seller about the product;
   • A description of the product; and/or
   • A model of the product.
2. Implied Warranties: An implied warranty is created by the law. Implied warranties automatically apply when the seller offers some product for sale, even if the seller says nothing regarding the product’s performance. Two common types of implied warranties are for merchantability, and fitness for a particular use.

The implied warranty of merchantability guarantees that the product is fit to be used in the way that the product is intended to be used  When a seller sells a product, the implied warranty of merchantability guarantees that:

• The product is both fit and suitable, and as such can be used for the ordinary purposes that buyers would intend to use it;
• The quality of the product is at least adequate; and
• The product conforms to any promises made by the manufacturer, which are generally found on the container or label.

When a buyer tells the seller that they want to use a product in a specific way, and the seller gives them the product, they are warranting that the product they provided is fit for the use the buyer described. The implied warranty of fitness for particular use applies when:

• The seller knows that the buyer will be using the product or good for a specific purpose; and
• The seller knows that the buyer is relying on the seller’s expertise and knowledge regarding the product’s ability to be used in the way the buyer intends.

The Magnuson-Moss Warranty Act is the standard federal law governing consumer product warranties. Passed in 1975, the Magnuson Moss Warranty Law requires manufacturers and distributors of consumer products to inform consumers about their rights under warranties. The Act also outlines the various duties and obligations assigned to warrantors under product warranties. 

The Magnuson-Moss Warranty Act is intended to ensure that consumers receive complete disclosure regarding warranty conditions and terms. Additionally, the Act ensures that consumers are able to compare warranty coverages prior to purchasing the product. And, the Act makes it easier for consumers to pursue legal remedies in court, while simultaneously allowing producers to institute informal procedures for resolving warranty disputes.

What Does the Magnuson-Warranty Act Require?

The Magnuson Moss Act creates a number of requirements for manufacturers, distributors, and sellers of consumer products.  Some examples of frequently cited requirements of the Act include:

• Warrantors must classify their warranties as either “full” or “limited” coverage, which may be designated in the title of the warranty;
• Warrantors must clearly state specific details regarding warranty coverage in a single, easy-to-read document; and 
• Warrantors and sellers must ensure that warranties are easily available wherever the consumer product is sold, so that consumers can review the document before making a purchase.

Additionally, the Act enforces a number of limitations associated with deceptive sales practices.  An example of this would be how the Act prohibits:

1. The use of deceptive warranty terms;
2. Disclaimers or modifications of specific types of warranties; and
3. “Tie-in sales” requirements, meaning that you may only use this product with another one of our products or services.

An express warranty can be disclaimed by statements in brochures, models, and samples stating that no warranty is created by those terms. Additionally, sales associates must be careful not to make any verbal promises without such a condition. Express warranties may also be disclaimed by statements made in a contract for a sale which exclude any express warranties.

Implied warranties can also be disclaimed in most places; however, there are federal restrictions on the practice, and some state laws limit disclaimers on consumer goods. In order to disclaim implied warranties, the seller must inform the buyer in writing that the seller would not be held liable if the product is defective, or does not perform as the buyer believed it would. Alternatively, the seller may label a product as being sold “as is” or “with all faults.” Doing so will disclaim implied warranties, but not remove liability for defective or dangerous products.

Are There Any Limitations on the Magnuson-Moss Warranty Act?

The Magnuson Moss Law is subject to the following limitations:

• Businesses are not required to provide written warranties, as they may issue these at their own discretion. However, once a business issues a written warranty, they must comply fully with all terms of the Act;
• The Magnuson-Moss Warranty does not apply to oral warranties, only written warranties;
• The Act does not apply to warranties covering services only; and
• The Act does not apply to products that are sold for commercial products, or products sold for resale. The Magnuson-Moss Warranty Act only applies to consumer products, meaning products generally used for household, family, or personal purposes.

How Does the Act Affect Consumer Lawsuits?

There are two specific ways in which the Magnuson-Moss Warranty Act affects consumer lawsuits against warrantors. First, the Act has stated that a breach of warranty is a violation under federal law. This makes it easier for consumers to sue for breach of warranty in a court of law. Specifically, depending on the amount of damages, the consumer will want to bring their case in a federal court, as federal law will be controlling. Additionally, consumers are able to recover attorney’s fees and court costs under the Act.

Alternatively, the Act also contains provisions allowing a warrantor to create alternative methods for resolving consumer disputes over warranties. An example of this would be how companies can institute informal dispute resolution mechanisms for addressing consumer warranty complaints. These mechanisms can be run internally by the company, or through a neutral third party, such as the Better Business Bureau. Warrantors may utilize methods, such as mediation or arbitration, in order to settle warranty disputes outside of the court system.

Simply put, although the Act makes it easier for consumers to file a breach of warranty lawsuit, it also opens up a number of alternative dispute resolution options for both manufacturers and consumers.

Do I Need a Lawyer for Advice Regarding the Magnuson-Moss Warranty Act?

If you are a warrantor, manufacturer, retailer, or distributor, you may be affected by the provisions contained within the Magnuson-Moss Warranty Act. As such, you should consult with an experienced and local lawyer if you have any questions regarding the act or are involved in a dispute regarding consumer warranties. 

Your lawyer can help defend your claim if a lawsuit is brought against your company, and will also be able to represent you in court, as needed. Additionally, a lawyer is often required for alternative dispute resolution methods such as arbitration.