Passed by Congress in - Section c , 15 U. Prohibits tying arrangements that condition coverage under a written warranty on the consumer's use of an article or service identified by brand, trade, or corporate name unless that article or service is provided without charge to the consumer. The Magnuson-Moss Warranty Act prohibits product manufacturers from conditioning consumer warranties on the use of any original equipment part or service. Furthermore, a manufacturer can only deny warranty coverage if it can demonstrate that a non-original equipment part or related service caused a defect to occur in the original product.
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Nearly everyone has heard about someone who has taken a vehicle that has been modified with aftermarket parts to a dealer for warranty service, only to have the dealer refuse to cover the defective items. The dealer usually states that because of the aftermarket parts the warranty is void, without even attempting to determine whether the aftermarket part caused the problem. Vehicle manufacturers are not allowed to void the vehicle warranty just because aftermarket parts are on the vehicle.
To better understand this problem it is best to know the differences between the two types of new car warranties and the two types of emission warranties. When a vehicle is purchased new and the owner is protected against the faults that may occur by an expressed warranty — an offer by the manufacturer to assume the responsibility for problems with predetermined parts during a stated period of time.
Beyond the expressed warranty, the vehicle manufacturer is often held responsible for further implied warranties. These state that a manufactured product should meet certain standards. There are also two emission warranties defect and performance required under the clean air act. If the vehicle fails to meet the performance warranty requirements, the manufacturer must make repairs at no cost to the owner, even if an aftermarket part is directly responsible for a warranty claim, the vehicle manufacturer cannot void the performance warranty.
In cases where such a failed aftermarket part is responsible for a warranty claim, the vehicle manufacturer must arrange a settlement with the consumer, but by law the new — vehicle warranty is not voided.
Overall, the laws governing warranties are very clear. The only time a new vehicle warranty can be voided is if an aftermarket part has been installed and it can be proven that it is responsible for an emission warranty claim.
However, a vehicle manufacturer or dealership cannot void a warranty simply because an an aftermarket equipment has been installed on a vehicle. If a dealership denies a warranty claim and you think the claim falls under the rules explained above concerning the clean air act such as an emission part failure , obtain a written explanation of the dealers refusal. Then follow the steps outlined in the owners manual.
However, if this fails, then phone your complaint in to the EPA at or If a dealer denies a warranty claim involving an implied or expressed new car warranty and you would like help, you can contact the Federal Trade Commission FTC.
The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them.
The FTC enters Internet, telemarketing, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies worldwide. There is, however, no requirement that a warranty be given nor that any product be warranted for any length of time. Thus the Act only requires that when there is a written warranty, the warrantor clearly disclose the nature of his warranty obligation prior to the sale of the product.
Implied warranties may, however, be limited in duration if the limitation is reasonable, conscionable, and set forth in clear and unmistakable language prominently displayed on the face of the warranty. A consumer damaged by breach of warranty, or noncompliance with the act, may sue in either state or federal district court. In light of these requirements it is likely that most suits will be brought in state court.
Nothing in the Act invalidates any right or remedy available under state law, and most suits should proceed on claims based on both the Code and the Act. The Magnuson-Moss Warranty Act is the federal law that governs consumer product warranties. Passed by Congress in , the Act requires manufacturers and sellers of consumer products to provide consumers with detailed information about warranty coverage.
In addition, it affects both the rights of consumers and the obligations of warrantors under written warranties. First, Congress wanted to ensure that consumers could get complete information about warranty terms and conditions.
By providing consumers with a way of learning what warranty coverage is offered on a product before they buy, the Act gives consumers a way to know what to expect if something goes wrong, and thus helps to increase customer satisfaction. Second, Congress wanted to ensure that consumers could compare warranty coverage before buying. By comparing, consumers can choose a product with the best combination of price, features, and warranty coverage to meet their individual needs.
Third, Congress intended to promote competition on the basis of warranty coverage. By assuring that consumers can get warranty information, the Act encourages sales promotion on the basis of warranty coverage and competition among companies to meet consumer preferences through various levels of warranty coverage. Finally, Congress wanted to strengthen existing incentives for companies to perform their warranty obligations in a timely and thorough manner and to resolve any disputes with a minimum of delay and expense to consumers.
Thus, the Act makes it easier for consumers to pursue a remedy for breach of warranty in the courts, but it also creates a framework for companies to set up procedures for resolving disputes inexpensively and informally, without litigation. In order to understand how the Act affects you as a businessperson, it is important first to understand what the Act does not require.
First, the Act does not require any business to provide a written warranty. The Act allows businesses to determine whether to warrant their products in writing. However, once a business decides to offer a written warranty on a consumer product, it must comply with the Act. Third, the Act does not apply to warranties on services. Only warranties on goods are covered. However, if your warranty covers both the parts provided for a repair and the workmanship in making that repair, the Act does apply to you.
Finally, the Act does not apply to warranties on products sold for resale or for commercial purposes. The Act covers only warranties on consumer products. This means that only warranties on tangible property normally used for personal, family, or household purposes are covered. This includes property attached to or installed on real property. Note that applicability of the Act to a particular product does not, however, depend upon how an individual buyer will use it. The following section of this manual summarizes what the Magnuson-Moss Warranty Act requires warrantors to do, what it prohibits them from doing, and how it affects warranty disputes.
In passing the Magnuson-Moss Warranty Act, Congress specified a number of requirements that warrantors must meet. Congress also directed the FTC to adopt rules to cover other requirements. In addition, the FTC has issued an interpretive rule that clarifies certain terms and explains some of the provisions of the Act.
This section summarizes all the requirements under the Act and the Rules. The Act and the Rules establish three basic requirements that may apply to you, either as a warrantor or a seller. As a warrantor or a seller, you must ensure that warranties are available where your warranted consumer products are sold so that consumers can read them before buying.
Each of these three general requirements is explained in greater detail in the following chapters. There are three prohibitions under the Magnuson-Moss Act. The Act prohibits anyone who offers a written warranty from disclaiming or modifying implied warranties.
This means that no matter how broad or narrow your written warranty is, your customers always will receive the basic protection of the implied warranty of merchantability. There is one permissible modification of implied warranties, however. For example, if you offer a two-year limited warranty, you can limit implied warranties to two years.
If you sell a consumer product with a written warranty from the product manufacturer, but you do not warrant the product in writing, you can disclaim your implied warranties. These are the implied warranties under which the seller, not the manufacturer, would otherwise be responsible. But, regardless of whether you warrant the products you sell, as a seller, you must give your customers copies of any written warranties from product manufacturers.
Generally, tie-in sales provisions are not allowed. Such a provision would require a purchaser of the warranted product to buy an item or service from a particular company to use with the warranted product in order to be eligible to receive a remedy under the warranty.
The following are examples of prohibited tie-in sales provisions. Failure to have scheduled maintenance performed, at your expense, by the Great American Maintenance Company, Inc.
While you cannot use a tie-in sales provision, your warranty need not cover use of replacement parts, repairs, or maintenance that is inappropriate for your product. The following is an example of a permissible provision that excludes coverage of such things. While necessary maintenance or repairs on your AudioMundo Stereo System can be performed by any company, we recommend that you use only authorized AudioMundo dealers. Improper or incorrectly performed maintenance or repair voids this warranty.
Although tie-in sales provisions generally are not allowed, you can include such a provision in your warranty if you can demonstrate to the satisfaction of the FTC that your product will not work properly without a specified item or service. Obviously, warranties must not contain deceptive or misleading terms. You cannot offer a warranty that appears to provide coverage but, in fact, provides none. Similarly, a warranty that promised service that the warrantor had no intention of providing or could not provide would be deceptive and unlawful.
Two other features of the Magnuson-Moss Warranty Act are also important to warrantors. First, the Act makes it easier for consumers to take an unresolved warranty problem to court. Second, it encourages companies to use a less formal, and therefore less costly, alternative to legal proceedings. Such alternatives, known as dispute resolution mechanisms, often can be used to settle warranty complaints before they reach litigation.
Because of the stringent federal jurisdictional requirements under the Act, most Magnuson-Moss lawsuits are brought in state court. However, major cases involving many consumers can be brought in federal court as class action suits under the Act. Although the consumer lawsuit provisions may have little effect on your warranty or your business, they are important to remember if you are involved in warranty disputes.
Although the Act makes consumer lawsuits for breach of warranty easier to bring, its goal is not to promote more warranty litigation. On the contrary, the Act encourages companies to use informal dispute resolution mechanisms to settle warranty disputes with their customers.
Basically, an informal dispute resolution mechanism is a system that works to resolve warranty problems that are at a stalemate. Such a mechanism may be run by an impartial third party, such as the Better Business Bureau, or by company employees whose only job is to administer the informal dispute resolution system. The impartial third party uses conciliation, mediation, or arbitration to settle warranty disputes.
The Act allows warranties to include a provision that requires customers to try to resolve warranty disputes by means of the informal dispute resolution mechanism before going to court. This provision applies only to cases based upon the Magnuson-Moss Act.
Briefly, the Rule requires that a mechanism must:. Be adequately funded and staffed to resolve all disputes quickly; Be available free of charge to consumers; Be able to settle disputes independently, without influence from the parties involved; Follow written procedures; Inform both parties when it receives notice of a dispute; Gather, investigate, and organize all information necessary to decide each dispute fairly and quickly; Provide each party an opportunity to present its side, to submit supporting materials, and to rebut points made by the other party; the mechanism may allow oral presentations, but only if both parties agree ; Inform both parties of the decision and the reasons supporting it within 40 days of receiving notice of a dispute; Issue decisions that are not binding; either party must be free to take the dispute to court if dissatisfied with the decision however, companies may, and often do, agree to be bound by the decision ; Keep complete records on all disputes; and Be audited annually for compliance with the Rule.
Rather, they are informal because they do not involve the technical rules of evidence, procedure, and precedents that a court of law must use. As stated previously, you do not have to comply with the Dispute Resolution Rule if you do not require consumers to use a mechanism before bringing suit under the Magnuson-Moss Act.
You may want to consider establishing a mechanism that will make settling warranty disputes easier, even though it may not meet the standards of the Dispute Resolution Rule. Superchips Inc. Federal Trade Commission Website. State Bar of Texas Website texasbarcle. Your email address will not be published.
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We continue to be open and working remotely during the hours of 8 a. Monday through Friday during the Coronavirus response. When manufacturers fail to stand behind their products, consumers rely on the Magnuson-Mass Warranty Act for the legal tools needed for swift and fair compensation. The Magnuson-Moss Warranty Act of arose in response to widespread misuse of express warranties and disclaimers by merchants in the s. The Act requires consumer products manufacturers and sellers to give customers detailed warranty coverage information. Congress also sought to promote competition based on warranty coverage. For example, if you buy a car, that car is supposed to move around safely, like a car should.
Magnuson Moss Warranty-Federal Trade Commission Improvements Act
The act 15 U. A warranty may guarantee several things, such as that the item will perform in a certain way or that the manufacturer will repair or replace the item if it is defective. The act was sponsored by Senators Warren G. Magnuson and Frank E. Congress passed the act in Its purpose was to improve the information available to consumers, prevent deception, and improve competition in the marketing of consumer products, which are defined as property distributed in commerce and actually used for personal, family, or household purposes. If a plaintiff prevails against a seller in a lawsuit brought under the act, the plaintiff is entitled to recover all litigation expenses, including attorney's fees based on actual time expended, as determined by the court.
Magnuson-Moss Warranty Act
Enacted in , the federal statute governs warranties on consumer products. The law does not require any product to have a warranty it may be sold "as is" , but if it does have a warranty, the warranty must comply with this law. The law was created to fix problems as a result of manufacturers using disclaimers on warranties in an unfair or misleading manner. The legislative history indicates that the purpose of the act is to make warranties on consumer products more readily understood and enforceable and to provide the Federal Trade Commission with means to better protect consumers. The act was sponsored by Senator Warren G. Magnuson of Washington and U. Representative John E.
Magnuson–Moss Warranty Act