A warranty is an expressed or implied representation of the facts about a product or service. Both federal and state laws exist to enforce warranties, if the warrantor (the party making the representations) does not honor the terms of warranty.
If a product or service is covered by a warranty and is not as it was represented to be, then the seller or supplier may have a duty to replace, repair, or offer a refund for the product or service.
Warranties are only valid for a limited amount of time. The types of warranties are described in more detail below.
If a manufacturer or a business fails to honor the terms of a warranty, then a breach of warranty may have occurred. Warranty providers sometimes try to avoid their warranty responsibilities by claiming that the problems are not covered by the warranty, or that the warranty has expired. Sometimes, the warranty providers may try to stall repairs so that the warranty period will end and then they will no longer be liable.
The statute of limitations; that is, the time within which a lawsuit may be brought on account of a breach of warranty begins from the time of the alleged breach. The statute of limitations should not be confused with the warranty period, which is the time within which a consumer may expect the warranty provider to make repairs or replacements according to the terms of the warranty.
There are three basic types of warranties:
- Implied warranty of merchantability: This warranty arises by statute. It requires that minimum standards of quality be met by the products (and their containers) or services. Products must be fit for the general purposes for which they are sold.
- Implied warranty of fitness: This warranty arises by statute. It requires that goods are appropriate for the purpose for which they are sold. For example, if a consumer buys “snow tires” but the tires are not safe for the snow, a breach of the implied warranty of fitness has occurred.
- Express warranty: This warranty is specific to the product or service sold. Usually manufacturers provide an express warranty, which is a guarantee that the product will work properly for the period of time stated in the warranty, customarily about one year. An express warranty includes statements and representations written in a sales contract, those stated on tags attached to the product or sample, and other written statements delivered with the product or service when it is sold. An example of an express warranty is the statement, “These tires will last for 200,000 miles.” However, statements like “these tires will last a lifetime” are puffery, and do not constitute an express warranty.
In addition, consumers often have the option to purchase extended warranties.
Extended warranties are service contracts existing between the warranty company and the purchaser. While an express warranty protects against defects and false claims made from the point of sale to a particular point in time, extended warranties continue coverage for defects or problems that occur after the expiration of an express warranty. Extended warranty offers are common with vehicles, household applications, electronic systems and similar products.
Tips on Extended Warranties
To avoid warranty fraud, it is important for consumers to do their research and understand what they are purchasing before they buy a warranty. The following are some basic tips to protect you from warranty fraud when purchasing an extended warranty.
Research the company you are considering as your warranty dealer. Check with the Better Business Bureau and do additional research to determine the company’s reputation and reliability. How long have they been in business? What is their track record? What experiences have other consumers had with this company? Is the company financially sound? Having a warranty through a company that goes belly-up or one with a history of warranty fraud is virtually worthless.
Carefully review and understand the terms of the warranty before you purchase the product. What is covered? What is not covered? What stipulations might nullify your right to a claim? What features are included? Is there a renewal option? As a general rule, it is better to have a warranty that excludes coverage for X, Y, and Z rather than listing 10 to 20 things that are covered by the policy.
Read and save all documentation pertaining to the warranty. Photocopy receipts and documents that originally appear on thermal paper, as the print will fade with time. If you purchased a warranty online, be sure to print out all pertinent pages from the website. If salespersons add a feature to the warranty verbally, be sure to get them to put the additional terms in writing.
Call the service number on the warranty before purchase. Is it easy to reach service personnel? How long does it take? Does the service staff appear organized and helpful?
Comparison shop for the most appropriate warranty to suit your product and your needs. The cheapest warranty is not always the best; most times, you get what you pay for. It is also important to maintain sight of what you need and don’t need from a warranty. For example, if you work with computers often and replace your PC with a new product every three years, there is no need to purchase a five year warranty.