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The Magnuson-Moss Warranty Act (Act) is a federal law enacted by Congress in 1975 to improve information made available to consumers regarding warranty coverage, prevent deception in the sale of consumer goods, enhance competition in the marketing of consumer products, and incentivize warrantors to timely performance their warranty obligations. To further these objectives, the Act provides important rights to consumers and imposes significant obligations on warrantors that provide written warranties for consumer goods. While sellers are free to determine whether they want to provide a warranty, once a written warranty is provided for a consumer product, they must comply with the Act.
The Act has abroad scope and applies to written warranties for consumer products that cost customers at least $5. The term “consumer products” is broadly defined to include any tangible personal property distributed in commerce and normally used for personal, family, or household purposes. The written warranty must also be part of the basis of the bargain between the supplier and the buyer of the goods. A warrantor is any supplier or other person who provides a written warranty, or who is obligated under an implied warranty, and who is in the business of making consumer goods directly or indirectly available to buyers.
The Act requires a written warranty to fully and conspicuously disclose, in simple language, the terms and conditions of the warranty. Information that may be required in the warranty includes: the names and addresses of the warrantors; the parties to whom the warranty is extended; the products covered by the warranty; a statement of what the warrantor will do should there be a product defect; what the consumers must do, what expenses they must bear, and the specific steps they must take to obtain performance of the warranty obligation; and any exceptions or exclusions from the warranty.
Under the Act, the warranty must be clearly designated as either a either a “full” or a “limited” warranty. Only if a warranty meets the minimum standards set forth in the Act can it be called a full warranty; if not it must be clearly designated as a limited warranty. To constitute a full warranty, in the event there is a defect or failure to conform to the written warranty, the warrantor must: (1) remedy the product during the warranty period without charge to the customer (remedy is defined to be either a repair, replacement or refund); (2) not impose any limitation on the duration of any implied warranty with respect to the product; (3) not exclude or limit consequential damages for a breach of any written or implied warranty, unless the exclusion or limitation conspicuously appears on the face of the warranty; and (4) permit the consumer to elect either a refund or replacement without charge if the product defect cannot be remedied after a reasonable number of attempts. A full warranty under the Act must also extend to all consumers of the product and not just the initial buyer.
Failure to comply with the Act is a violation of federal law. Consumers who sustain damages due to a warrantor’s failure to comply with the Act may bring legal action in any state court of competent jurisdiction to recover damages. Notably, the Act provides for a recovery of the consumer’s reasonable costs and expenses, including attorney’s fees, incurred in prosecuting the suit. The Act further allows the Federal Trade Commission and attorney general to initiate legal action for injunctive relief to prevent a warrantor from making a deceptive warranty or from otherwise violating the Act.
For additional information on the Magnuson-Moss Warranty Act, and coverage of a host of other legal topics, click here to visit Lexis Practice Advisor.