Warranty
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The examples and perspective in this article deal primarily with the United
States and do not represent a worldwide view of the subject. (September
2010)
Learn more
This article's lead section may be too technical for most readers to
understand. (March 2021)
In law, a warranty is an expressed or implied promise or assurance of some kind. The
[1]
term's meaning varies across legal subjects. In property law, it refers to a covenant
[2]
by the grantor of a deed. In insurance law, it refers to a promise by the purchaser of
[3]
an insurance about the thing or person to be insured.
In contract law, a warranty is a contractual assurance given, typically, by a seller to a
[4]
buyer, for example confirming that the seller is the owner of the property being sold.
[5]
A warranty is a term of a contract, but not usually a condition of the contract or an
[6]
innominate term, meaning that it is a term "not going to the root of the contract", and
[6]
therefore only entitles the innocent party to damages if it is breached, i.e. if the
warranty is not true or the defaulting party does not perform the contract in accordance
with the terms of the warranty. A warranty is not a guarantee: it is a mere promise. It
may be enforced if it is breached by an award for the legal remedy of damages.
Depending on the terms of the contract, a product warranty may cover a product such
that a manufacturer provides a warranty to a consumer with whom the manufacturer
has no direct contractual relationship because it is purchased via an intermediary.
A warranty may be express or implied. An express warranty is expressly stated
(typically, written); whether or not a term will be implied into a contract depends on the
particular contract law of the country in question. Warranties may also state that a
particular fact is true at a point in time, or that the fact will continue into the future (a
"continuing warranty").
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Express warranty
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Main article: Express warranties
Express warranties are created when the seller makes a guarantee to the buyer that the
product or service being offered has certain qualities. For there to exist an express
warranty, a statement regarding the product or service must be made to the buyer and
the statement must play a role in the buyer's decision to purchase the product or
service. If, after purchase, the buyer feels that the given statement was a
misrepresentation of the actual product or service, the buyer can file for breach of
[7]
express warranty.
Implied warranty
edit
Main article: Implied warranty
Implied warranties are unwritten promises that arise from the nature of the transaction,
and the inherent understanding by the buyer, rather than from the express
representations of the seller.
Sale of goods
edit
Main article: Sale of goods
Warranties provided in the sale of goods (tangible products) vary according to
jurisdiction, but commonly new goods are sold with implied warranty that the goods are
as advertised. Used products, however, may be sold "as is" with no warranties. Each
country, however, defines its own parameters with regard to implied conditions or
implied warranties. The rules regarding warranties are largely standardised; i.e., the
concepts of offer, acceptance, consideration, capacity to contract and intention to
create legal relations. Those are the five elements to create a legally binding contract in
the United States (all 50 states), England and Wales, Scotland and Northern Ireland,
each of the seven states of Australia, and all other common law countries. Countries
with civil law systems, however, recognise legally binding contracts which are not
[citation needed]
supported by consideration.
United States
edit
In the United States, various laws apply, including provisions in the Uniform Commercial
[8]
Code which provide for implied warranties. However, these implied warranties were
often limited by disclaimers. In 1975 the Magnuson–Moss Warranty Act was passed to
[9]
strengthen warranties on consumer goods. Among other things, under the law
implied warranties cannot be disclaimed if an express warranty is offered, and attorney
[9]
fees may be recovered. In some states, statutory warranties are required on new
home construction, and "lemon laws" apply to motor vehicles.
Article 2 of the Uniform Commercial Code, which has been adopted with variations in
each state, provides that the following two warranties are implied unless they are
explicitly disclaimed (such as an "as is" statement):
● The warranty of merchantability is implied unless expressly disclaimed by
name, or the sale is identified with the phrase "as is" or "with all faults." To be
"merchantable", the goods must reasonably conform to an ordinary buyer's
expectations. For example, a fruit that looks and smells good but has hidden
defects may violate the warranty if its quality does not meet the standards for
such fruit "as passes ordinarily in the trade". In most states, products inherently
come with implied warranty of merchantability; however, in states like
Massachusetts under consumer protection law, it is illegal to disclaim this
warranty on household goods sold to consumers. (Massachusetts General Laws,
Chapter 106: Section 2-316A)
● The warranty of fitness for a particular purpose is implied unless disclaimed
when a buyer relies upon the seller to select the goods to fit a specific request.
For example, this warranty is violated when a buyer asks a mechanic to provide
tires for use on snowy roads and receives tires that are unsafe to use in snow.
Defects In Materials and
Workmanship
edit
A common kind of warranty on goods is a warranty that the product is free from material
defects in materials and workmanship. This simply promises that the manufacturer
properly constructed the product, out of proper materials. This implies that the product is
not defective for the purposes for which it was made.
Warranties may be time limited, thus limiting the time the buyer has to make a claim for
breach of warranty. For example, a typical 90-day warranty on a television gives the
buyer 90 days from the date of purchase to claim that the television was improperly
constructed. Should the television fail after 91 days of normal usage, which because
televisions customarily last longer than 91 days means there was a defect in the
materials or workmanship of the television, the buyer nonetheless may not collect on
the warranty because it is too late to file a claim. Consumer protection laws
implemented by statute, however, provide additional remedies as it is not usually
expected that a television will last for only 90 days.
Time-limited warranties are often confused with performance warranties. A 90-day
performance warranty would promise that the television would work for 90 days, which
is fundamentally different from promising that it was delivered free of defects and
limiting the time the buyer has to prove otherwise. But because the usual evidence that
a product was delivered defective is that it later breaks, the effect is very similar.
One situation in which the effect of a time-limited warranty is different from the effect of
a performance warranty is where the time limit exceeds a normal lifetime of the product.
If a coat is designed to last two years, but has a 10-year limited warranty against
defects in materials and workmanship, a buyer who wears the coat for 3 years and then
finds it worn out would not be able to collect on the warranty. But it is different from a 2-
year warranty because if the buyer starts wearing the coat 5 years after buying it, and
finds it wears out a year later, the buyer would have a warranty claim in Year 6. On the
other hand, a 10-year performance warranty would promise that the coat would last 10
years.
Satisfaction guarantee
edit
In the United States, the Magnuson–Moss Warranty Act of 1976 provides for
enforcement of a satisfaction guarantee warranty. In these cases, the advertiser must
[10]
refund the full purchase price regardless of the reason for dissatisfaction.
Lifetime warranty
edit
A lifetime warranty is usually a warranty against defects in materials and workmanship
that has no time limit to make a claim, rather than a warranty that the product will
[11]
perform for the lifetime of the buyer. The actual time that product can be expected
to perform is normally determined by the custom for products of its kind used the way
the buyer uses it.
If a product has been discontinued and is no longer available, the warranty may last a
limited period longer. For example:
● the Cisco Limited Lifetime Warranty currently lasts for five years after the product
has been discontinued, but only if you know where you bought it from as the
[12]
seller is responsible for administering it.
● HP Networking product lifetime warranties last for as long as one owns the
[13]
product.
Limited warranty
edit
A warranty may be limited in duration (as above) and/or in scope. In Avrora Fine Arts v
Christie, Manson and Woods (a UK High Court case), the auctioneers had issued a
"limited warranty" that a certain painting sold at auction had been painted by the
Russian painter Boris Kustodiev, which experts subsequently stated was not the case.
The sale was cancelled and the buyer was reimbursed, but further claims of negligence
[14]
and misrepresentation were denied because they fell outside the warranty's scope.
Breach of warranty
edit
Warranties are breached when the promise is not performed at all, or not performed in
accordance with the contract. The seller may honor the warranty by making a refund or
a replacement. The statute of limitations depends on the jurisdiction and contractual
agreements. In the United States, the Uniform Commercial Code § 2-725 provides for a
four-year time limit, which can be limited to one year by contract, starting from the date
of delivery or if future performance is guaranteed from the date of discovery. Refusing to
honor the warranty may be an unfair business practice. In the United States, breach of
warranty lawsuits may be distinct from revocation of contract suits; in the case of the
breach of warranty, the buyer's item is repaired or replaced while breach of contract
[15]
involves returning the item to the seller.
Warranty label on top of a hard disk
Warranty label lifted. The word "VOID" is shown multiple times.
Some warranties require that repairs be undertaken by an authorized service provider.
In such cases, service by non-authorized personnel or company may void (nullify) the
warranty. However, according to the Magnuson-Moss Act (a U.S. Federal law that
governs warranties, which was passed in 1975), if the warranty does not provide full or
partial payment of labor (to repair the device or system), it is the owner's choice who will
provide the labor, including the possibility of DIY ("Do It Yourself") repairs, in which case
the device or system owner will pay zero dollars for labor, yet the company that
provided the warranty must still provide all the parts needed for the repair at absolutely
no charge to the owner.
If the defective product causes injury, this may be a cause of action for a product liability
lawsuit (tort). Strict liability may be applied.
Extended warranty
edit
In addition to standard warranties on new items, third parties or manufacturers may sell
[16]
or offer extended warranties (also called service contracts). These extend the
warranty for a further length of time. However, these warranties have terms and
conditions which may not match the original terms and conditions. For example, these
may not cover anything other than mechanical failure from normal usage. Exclusions
may include commercial use, "acts of God", owner abuse, and malicious destruction.
They may also exclude parts that normally wear out such as tires and lubrication on a
vehicle.
These types of warranties are provided for various products, but automobiles and
electronics are common examples. Warranties which are sold through retailers such as
Best Buy may include significant commission for the retailer as a result of reverse
[17]
competition. For instance, an auto warranty from a car dealership may be
subcontracted and vehicle repairs may be at a lower rate which could compromise the
quality of service. At the time of repair, out-of-pocket expenses may be charged for
unexpected services provided outside of the warranty terms or uncovered parts.
Extended Warranties are mostly back to back underwritten by underwriters, who are the
actual bearer of the risk.
Representations versus warranties
edit
Further information: Misrepresentation
Statements of fact in a contract or in obtaining the contract are considered to be either
warranties or representations. Traditionally, warranties are factual promises which are
enforced through a contract legal action, regardless of materiality, intent, or reliance.
[18]
Representations are traditionally *pre*contractual statements which allow for a tort-
[19]
based action if the misrepresentation is innocent, negligent or fraudulent. In U.S.
[18]
law, the distinction between the two is somewhat unclear; warranties are viewed as
primarily contract-based legal action while negligent or fraudulent misrepresentations
[18]
are tort-based, but there is a confusing mix of case law in the United States. In
modern English law, sellers often avoid using the term 'represents' in order to avoid
claims under the Misrepresentation Act 1967 (although English law will look to the
substance rather than the form of the representation to decide what it is), while in
[20]
America 'warrants and represents' is relatively common. Some modern
commentators suggest avoiding the words and substituting 'state' or 'agree', and some
[19] [21]
model forms do not use the words; however, others disagree.
Product types
edit
Appliance warranty
edit
Canada and United States
edit
Written warranties on new major appliances, such as refrigerators, kitchen stoves and
dishwashers, usually cover the cost of parts and labor to repair defects in materials or
workmanship which appear under normal home use.
[22]
Warranties often cover defects up to a year after purchase or delivery. However
some exclude new owners when a house or appliance is sold within the year (Frigidaire,
[23] [24] [25]
LG, Samsung ). Others do let warranties transfer to new buyers (Amana,
[26] [27]
General Electric, Whirlpool). Some manufacturers cover refrigerators' sealed
[27] [28]
parts (compressors, tubing, etc.) for five years (General Electric, Samsung,
[25] [24] [29]
Whirlpool) or seven years (LG ) or ten years (KitchenAid ).
Warranties on water heaters cover parts for 5 to 12 years in single family residences,
one year otherwise. They do not cover new owners when a house or heater is sold; nor
[30][31]
do they cover the original owner if the heater is moved to a second location.
[32][33][34]
Tank models from A. O. Smith do not allow heating elements to be
replaced with lower (or higher) wattages, and do not cover renter-occupied single
family. They end if the unit is flooded or ever uses desalinated or deionized water, such
[32][33]
as municipal desalination plants or reverse osmosis filters. Smith's tank
models for manufactured housing do not provide coverage if a whirlpool or hot tub is
[33]
connected.
Tank water heater warranties exclude labor, liability for water damage, and shipping
cost to return the old heater or parts. Tankless warranties do not exclude water
damage; they cover labor for a year, and Ruud/Rheem covers return shipping on
[31][34]
tankless models. Smith's tankless water heaters do not restrict coverage to a
[34]
single family, and require professional installation.
Implied warranties under US law could extend for longer periods. However, most states
allow the written warranties to include clauses which limit these implied warranties to
[35]
the same time period as the written warranty.
Car warranty
edit
United States
edit
New car factory warranties commonly range from one year to five years and in some
cases extend even 10 years, with typically a mileage limit as well. Car warranties can be
extended by the manufacturer or other companies with a renewal fee.
Used car warranties are usually 3 months and 3,000 miles.
United Kingdom
edit
In the United Kingdom, types of warranties have been classified as either an:
1. original manufacturer warranty,
2. insurance warranty underwritten and regulated as insurance or
3. obligor warranty, typically written by a car dealership or garage.
In the United Kingdom, the Financial Conduct Authority (FCA), which began to regulate
insurance contracts in this context in 2005, determined that additional warranties sold
[36]
by car dealerships are "unlikely to be insurance". Insurance warranties may offer
greater protection to the consumer.
Home Warranty
edit
Main article: Home warranty
A home warranty protects against the costs of home and appliance repair by offering
home warranty coverage for houses, townhomes, condominiums, mobile homes, and
new construction homes. When a problem occurs with a covered appliance or
mechanical system such as an air conditioning unit or furnace, a service technician
repairs or replaces it. The homeowner may have to pay for a service call fee and the
home warranty company pays the balance for the repair or replacement of the covered
item.
Intellectual property right warranty
edit
An intellectual property right (IPR) warranty provides contractual protection against
breach of rights in software development and other fields where IPR is protected.
Increasing reluctance on the part of suppliers to offer an IPR warranty or indemnity has
[37]
been noted in recent years.
Warranty data
edit
Warranty data consists of claims data and supplementary data. Claims data are the
data collected during the servicing of claims under warranty and supplementary data
[38]
are additional data such as production and marketing data. This data can help
[38]
determine product reliability and plan for future modifications.
See also
edit
● Business law
● Collateral TORT
● Consumer protection
● Due diligence
● Extended warranty
● Magnuson-Moss Warranty Act
● Surety
● Warranty deed
● Warranty tolling
References
edit
● ^ Gilmore, Grant; Black, Jr., Charles L. (1975). The Law of Admiralty. Foundation Press.
p. 63. ISBN 0882774093.
● ^ Black's Law Dictionary (15 ed.). Thomson Reuters West. 2015. p. 1344. ISBN
9780314642721.
● ^ Black's Law Dictionary (15 ed.). Thomson Reuters West. 2015. p. 1345. ISBN
9780314642721.
● ^ Gordons Partnership Solicitors, Guarantees, Warranties and Indemnities – Spot the
Difference, accessed 2 February 2023
● ^ Johnson, M., Warranties in share purchase agreements, Rocket Lawyer, accessed 2
February 2023
ab
● ^ Jump up to: Hogg M. (2011). Promises and Contract Law: Comparative
Perspectives, p. 48, Cambridge University Press.
● ^ Bagley, Constance; Dauchy, Craig (2018). The Entrepreneur's Guide to Law and
Strategy (Fifth ed.). Boston, MA: Cengage Learning, Inc. pp. 313–315. ISBN 978-1-285-
42849-9.
● ^ Warranties in Sales of Goods. LexisNexis Study Outlines.
ab
● ^ Jump up to: 12 Reasons to Love the Magnuson-Moss Act. Journal of Texas
Consumer Law. Reprinted with permission from the National Consumer Law Center.
● ^ Andreoni J. (2005). Trust, Reciprocity, and Contract Enforcement: Experiments on
Satisfaction Guaranteed.
● ^ Lifetime Warranties. Warranty Week. WebCite Archive.
● ^ "Cisco Limited Lifetime Hardware Warranty Terms". Retrieved 2008-09-10.
● ^ "HP Networking warranty information". Retrieved 2011-08-26.
● ^ Maitland Chambers, AVRORA FINE ARTS INVESTMENT LTD V CHRISTIE,
MANSON & WOODS LTD (2012), accessed 23 December 2022
● ^ Davis T. (2009). UCC Breach of Warranty and Contract Claims: Clarifying the
Distinction. Baylor Law Review.
● ^ "Appliances - 247 Home Rescue". 247 Home Rescue. Retrieved 26 June 2015.
● ^ Baker T, Siegelman P. (2013). Protecting Consumers from Add-On Insurance
Products: New Lessons for Insurance Regulation.
abc
● ^ Jump up to: West G D, Lewis W B. (2009). Contracting to Avoid Extra-
Contractual Liability—Can Your Contractual Deal Ever Really Be the "Entire" Deal? The
Business Lawyer.
ab
● ^ Jump up to: Primack MA. (2009), and it was relied upon by a party to enter into the
contract. Representations, Warranties and Covenants: Back to the Basics in Contracts,
and do not form part of the contract. National Law Review.
● ^ Ferara L N, Philips J, Runnicles J. (2007). Some Differences in Law and Practice
Between U.K. and U.S. Stock Purchase Agreements Archived 2013-05-14 at the
Wayback Machine. Jones Day Publications.
● ^ Telman J. (2012). Representations and Warranties. ContractsProf Blog.
● ^ Moor, Tom (2016). "Are Extended Warranties on Appliances Worth It?". Angies' List
(published 2016-07-22). Retrieved 16 January 2017. Most manufacturers offer
warranties for appliances that last from three months to up to one year.
● ^ "Frigidaire, All about the Use & Care of your Refrigerator" (PDF). Electrolux. p. 20.
Retrieved 11 September 2016.
ab
● ^ Jump up to: "LG OWNER'S MANUAL FRENCH DOOR REFRIGERATOR". LG. pp.
55–58. Retrieved 11 September 2016.
ab
● ^ Jump up to: "WHIRLPOOL® REFRIGERATOR WARRANTY" (PDF). Whirlpool.
Archived from the original (PDF) on 20 December 2016. Retrieved 11 September 2016.
● ^ "AMANA® MAJOR APPLIANCE WARRANTY" (PDF). Amana. Archived from the
original (PDF) on 20 September 2016. Retrieved 11 September 2016.
ab
● ^ Jump up to: "GE Appliances, Refrigerators, Owner's Manual" (PDF). General
Electric. p. 11. Retrieved 11 September 2016.
● ^ "Refrigerator Product Info". Samsung. Retrieved 11 September 2016.
● ^ "KITCHENAID® REFRIGERATOR WARRANTY" (PDF). KitchenAid. Archived from the
original (PDF) on 20 December 2016. Retrieved 23 September 2016.
● ^ "Certificate of Limited Warranty, Rheem and Ruud Water Heaters".
ruud.com/product/ruud-residential-electric-water-heaters-professional-achiever-series-
standard-electric/#specs-docs. 2014-09-01. Retrieved 2017-10-13.
ab
● ^ Jump up to: "Rheem Limited Warranty For the RHEEM®, RUUD®, Richmond®,
Paloma®, and Sure Comfort® Residential Tankless Gas Water Heaters".
ruud.com/product/ruud-condensing-tankless-professional-ultra-series-96-direct-vent-
indoor/#specs-docs. Retrieved 2017-10-13.
ab
● ^ Jump up to: AO Smith (2017-08-01). "Limited Warranty [nor manufactured
housing]" (PDF). hotwater.com/resources/product-literature/warranty-sheets/residential-
electric/. Retrieved 2017-10-13.
abc
● ^ Jump up to: "AO Smith Water Heaters, Residential Electric Warranty
[Manufactured Housing]" (PDF). hotwater.com/resources/product-literature/warranty-
sheets/residential-electric/. Retrieved 2017-10-13.
abc
● ^ Jump up to: A. O. Smith. "Warranty" (PDF). hotwater.com/resources/product-
literature/warranty-sheets/tankless/. Retrieved 2017-10-13.
● ^ "What you need to know about warranty laws". Consumer Reports. 2013. Retrieved 11
September 2016.
● ^ What is a contract of insurance? Archived 2012-10-06 at the Wayback Machine.
Financial Services Authority.
● ^ Simon Halberstam LLP, Difference between an IPR indemnity and an IPR warranty,
published 2009, accessed 27 December 2022
ab
● ^ Jump up to: Wu S. (2012). Warranty Data Analysis: A Review. Quality and
Reliability Engineering International.
External links
edit
● Federal Trade Commission: Warranty Information (United States)
Last edited 6 months ago by AnomieBOT
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