What is the Magnusson-Moss Warranty Act?
The Magnusson-Moss Warranty Act of 1975 (Public Law 93-675) is legislation that regulates consumer warranties when offered on products. This legislation does not force suppliers to give warranties to consumers, but merely ensures that the warranties are fair and easy to understand. As result, warranties became an important component of buying a product and competitors may offer better warranties to induce the consumer to buy the product. Warranties prior to the Magnuson-Moss Warranty Act were non-competitive and non-enforceable, giving the consumer little reason to factor warranty coverage into the buying decision.
The Magnuson-Moss Warranty Act also sets up standards for companies to respond and be accountable for their warranties and creates an alternative dispute resolution infrastructure to resolve low-level disputes without the need to burden the judicial system. This covers written guarantees, so oral proclamations and promises are non-enforceable and that at the discretion of the consumer. The Magnuson-Moss Warranty Act applies to consumers only and is not meant to regulate relations between suppliers that resale products.
Definitions of the Magnuson-Moss Warranty Act
As the Magnuson-Moss Warranty Act was the first federal legislation of its kind to protect consumers from deceptive warranties, it defined a number of terms for the purposes of clarification in the Act.
– Consumer – one who buys a good for personal use only and not for resale.
o Consumer Product – an item sold for personal or household use
– Supplier – one that directly or indirectly facilitates the transfer of a product to a consumer
o Warrantor – supplier that offers a warranty
– Written Warranty – written promise that guarantees the workmanship and performance of the product in a stated time. Written warranties do not disclaim the below implied warranties. A written warranty is merely additional promises made by the supplier to the consumer.
– Implied Warranty – this is a standard set by the jurisdiction that imposes expectations on the sale of products between supplier and consumer. The provisions were determined by the Uniform Commercial Code of 1952. Implied warranties also place certain expectations of performance on the product, including:
o Fitness for a particular purpose – the product must perform for the function as advertised.
o Merchantability – the product must have all defects noted by the merchant at the time of sale and will fulfill the purpose for which it was sold.
o Workmanlike quality- any item made or constructed for the consumer must be made to acceptable standards.
o Habitability – as the name implies, the home that the consumer purchases must be habitable, unless otherwise noted by the seller, with the full disclosure to the buyer.
o Warranty of title – the seller has not stolen the goods and has a legal right to sell to the consumer.
– Service Contract – a promise from the supplier to provide maintenance and service over a set period of time. The employer must meet this obligation to the employee and offer the service as many times as it needed. Persistent defects entitle the consumer to a refund or replacement.
The Uniform Commercial Code is not a law per se but a set of recommendations for each state to adopt to govern commercial practices. Slight modifications may be made by each state. Implied warranties are no longer valid if the merchant claims the merchandise is “as is” or “with faults.”
What are the standards for warranty set by the Magnuson-Moss Warranty Act?
The terms and conditions of the warranty must be in plain, simple language for the consumer to understand it. The manufacturer cannot force the consumer to use the product in conjunction with other parts issued by the manufacturer as a condition of maintaining the warranty. This is called a “tie-in provision” and is expressly forbidden.
Full warranties force a manufacturer to deal with product issues in a timely manner. The manufacturer may not impose a limitation on the warranty for the product unless expressly noted on the product. An example would be “void when label removed” warnings on electronics that warn the consumer that disassembling this product will void the warranty. Long standing defects that are not remedied after a number of repair attempts will force the manufacturer to provide a refund or replacement.
What is the scope of the Magnuson-Moss Warranty Act?
This act, while not the final authority on consumer protection and warranty provides a number of recommendations and regulations for interactions between consumers and suppliers. The Federal Trade Commission is the final authority on commerce and provides the infrastructure to achieve redress under the provisions of the Magnuson-Moss Warranty Act. A supplier that continuously fails to meet proper regulations may be subject to sanctions by the government that will require the supplier to take remedial measures, or go out of business.
Additionally, disputes over the provisions of the Magnuson-Moss Warranty Act can be taken to federal court for damages exceeding $25,000 or the number of plaintiffs exceeding a hundred persons. In these suits, the plaintiff may recover the costs of the suit, including attorney fees, from the supplier.
What are the FTC rules related to the Magnuson-Moss Warranty Act?
The Rule on Disclosure of Written Consumer Product Warranty Terms and Conditions requires that a copy of the warranty be made available to the consumer. This may include an electronic version of the warranty on an electronic medium or the device itself.
The Rule on Pre-Sale Availability of Written Warranty Terms requires that the consumer be aware of the warranty of the product before the sale of the product so that the consumer may make an informed buying decision.
The Rule on Informal Dispute Settlement Procedures requires the seller to abide by FTC rules on dispute resolution and engage in such activity when deemed necessary.