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In contract law, a warranty is a promise which is not a condition of the contract or an innominate term: (1) it is a term "not going to the root of the contract", [1] and (2) which only entitles the innocent party to damages if it is breached: [2] i.e. 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.


A warranty is a term of a contract. 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 which the manufacturer has no direct contractual relationship.

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 one point in time or that the fact will continue into the future (a "continuing warranty").

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. This is because each country (a country as defined by international civil law) has its own system of contract law with its own set of rules. Said rules 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, however, recognise legally binding contracts which are not supported by consideration.

In the United States, various laws apply, including provisions in the Uniform Commercial Code which provide for implied warranties. [3] However, these implied warranties were often limited by disclaimers. In 1975 the Magnuson–Moss Warranty Act was passed to strengthen warranties on consumer goods. [4] Among other things, under the law implied warranties cannot be disclaimed if an express warranty is offered, and attorney fees may be recovered. [4] In some states, statutory warranties are required on new home construction, and "lemon laws" apply to motor vehicles.

Express warranty

Express warranties are created when the seller makes a guarantee to the buyer that the product/service being offered has certain qualities. For there to exist an express warranty 1) a statement regarding the product/service must be made to the buyer and 2) the statement must play a role in the buyers decision to purchase the product/service. If, after purchase, the buyer feels that the given statement was a misrepresentation of the actual product/service, the buyer can file for breach of express warranty. [5]

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. In the United States, 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):

Defects In Materials and Workmanship.

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 law, implement 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

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 refund the full purchase price regardless of the reason for dissatisfaction. [6]

Lifetime warranty

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 perform for the lifetime of the buyer. [7] 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:

Breach of warranty

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 involves returning the item to the seller. [10]

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

In addition to standard warranties on new items, third parties or manufacturers may sell or offer extended warranties (also called service contracts). [11] 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 competition. [12] 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.

Representations versus warranties

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. [13] Representations are traditionally *pre*contractual statements which allow for a tort-based action if the misrepresentation is innocent, negligent or fraudulent. [14] In U.S. law, the distinction between the two is somewhat unclear; [13] warranties are viewed as primarily contract-based legal action while negligent or fraudulent misrepresentations are tort-based, but there is a confusing mix of case law in the United States. [13] 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 America 'warrants and represents' is relatively common. [15] Some modern commentators suggest avoiding the words and substituting 'state' or 'agree', and some model forms do not use the words; [14] however, others disagree. [16]

Product types

Appliance warranty

Canada and United States

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.

Warranties often cover defects up to a year after purchase or delivery. [17] However some exclude new owners when a house or appliance is sold within the year (Frigidaire, [18] LG, [19] Samsung [20] ). Others do let warranties transfer to new buyers (Amana, [21] General Electric, [22] Whirlpool). Some manufacturers cover refrigerators' sealed parts (compressors, tubing, etc.) for five years (General Electric, [22] Samsung, [23] Whirlpool) [20] or seven years (LG [19] ) or ten years (KitchenAid [24] ).

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 do they cover the original owner if the heater is moved to a second location. [25] [26] [27] [28] [29] 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 as municipal desalination plants or reverse osmosis filters. [27] [28] Smith's tank models for manufactured housing do not provide coverage if a whirlpool or hot tub is connected. [28]

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 tankless models. [26] [29] Smith's tankless water heaters do not restrict coverage to a single family, and require professional installation. [29]

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 the same time period as the written warranty. [30]

Car warranty

United States

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

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 by car dealerships are "unlikely to be insurance". [31] Insurance warranties may offer greater protection to the consumer.

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.

Warranty data

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 are additional data such as production and marketing data. [32] This data can help determine product reliability and plan for future modifications. [32]

See also

Related Research Articles

Product liability is the area of law in which manufacturers, distributors, suppliers, retailers, and others who make products available to the public are held responsible for the injuries those products cause. Although the word "product" has broad connotations, product liability as an area of law is traditionally limited to products in the form of tangible personal property.

Home appliance Machine for household uses

A home appliance, also referred to as a domestic appliance, an electric appliance or a household appliance, is a machine which assists in household functions such as cooking, cleaning and food preservation.

Caveat emptor is Latin for "Let the buyer beware". It has become a proverb in English. Generally, caveat emptor is the contract law principle that controls the sale of real property after the date of closing, but may also apply to sales of other goods. The phrase caveat emptor and its use as a disclaimer of warranties arise from the fact that buyers typically have less information than the seller about the good or service they are purchasing. This quality of the situation is known as 'information asymmetry'. Defects in the good or service may be hidden from the buyer, and only known to the seller.

An extended warranty, sometimes called a service agreement, a service contract, or a maintenance agreement, is a prolonged warranty offered to consumers in addition to the standard warranty on new items. The extended warranty may be offered by the warranty administrator, the retailer or the manufacturer. Extended warranties cost extra and for a percentage of the item's retail price. Occasionally, some extended warranties that are purchased for multiple years state in writing that during the first year, the consumer must still deal with the manufacturer in the occurrence of malfunction. Thus, what is often promoted as a five-year extended guarantee, for example, is actually only a four-year guarantee.

In law, liable means "responsible or answerable in law; legally obligated". Legal liability concerns both civil law and criminal law and can arise from various areas of law, such as contracts, torts, taxes, or fines given by government agencies. The claimant is the one who seeks to establish, or prove, liability.

Implied warranty

In common law jurisdictions, an implied warranty is a contract law term for certain assurances that are presumed to be made in the sale of products or real property, due to the circumstances of the sale. These assurances are characterized as warranties irrespective of whether the seller has expressly promised them orally or in writing. They include an implied warranty of fitness for a particular purpose, an implied warranty of merchantability for products, implied warranty of workmanlike quality for services, and an implied warranty of habitability for a home.

Lemon laws are United States state laws that provide a remedy for purchasers of cars and other consumer goods in order to compensate for products that repeatedly fail to meet standards of quality and performance. Although many types of products can be defective, the term "lemon" is mostly used to describe defective motor vehicles, such as cars, trucks, and motorcycles.

As is, when employed as a term with legal effect, is used to disclaim some implied warranties for an item being sold. Certain types of implied warranties must be specifically disclaimed, such as the implied warranty of title. "As is" denotes that the seller is selling, and the buyer is buying an item in whatever condition it presently exists, and that the buyer is accepting the item "with all faults", whether or not immediately apparent. This is the classic "buyer beware" situation, where the careful buyer should take the time to examine the item before accepting it, or obtain expert advice.

Magnuson–Moss Warranty Act

The Magnuson–Moss Warranty Act is a United States federal law. Enacted in 1975, the federal statute governs warranties on consumer products. The law does not require any product to have a warranty, 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.

Redhibition is a civil action available under Louisiana law against the seller and/or manufacturer of a defective product, similar to the lemon laws more familiar to common law jurisdictions in other U.S. states. Redhibition is one of many laws that are unique to Louisiana among U.S. states because of its tradition in French and Spanish civil law.

<i>Henningsen v. Bloomfield Motors, Inc.</i>

In Henningsen v. Bloomfield Motors, Inc., 32 N.J. 358, 161 A.2d 69, the New Jersey Supreme Court held that an automobile manufacturer's attempt to use an express warranty that disclaimed an implied warranty of merchantability was invalid.

In the strictest legal sense a warranty of any kind within the United States must adhere to guidelines set at the states' and federal government's levels. A home warranty is a contract that agrees to provide a homeowner with discounted repair and replacement services. However, the words "home warranty" are not always used explicitly to mean a legal warranty is being conveyed. In many cases, at least in the United States, a home warranty is not a warranty at all, but rather a home service contract that covers the repair and/or replacement costs of home appliances, major systems such as heating and cooling, and possibly other components of a home, structural or otherwise. The home service contract generally covers home systems such as the home’s plumbing or electrical, and appliances like dishwashers that fail from old age/normal wear and tear. Coverage varies significantly across home warranty companies.

Sale of Goods Act 1979 United Kingdom legislation

The Sale of Goods Act 1979 is an Act of the Parliament of the United Kingdom which regulated English contract law and UK commercial law in respect of goods that are sold and bought. The Act consolidated the original Sale of Goods Act 1893 and subsequent legislation, which in turn had codified and consolidated the law. Since 1979, there have been numerous minor statutory amendments and additions to the 1979 Act. It was replaced for some aspects of consumer contracts from 1 October 2015 by the Consumer Rights Act 2015(c 15) but remains the primary legislation underpinning Business-to-business transactions involving selling or buying goods.

International Commercial Law is a body of legal rules, conventions, treaties, domestic legislation and commercial customs or usages, that governs international commercial or business transactions. A transaction will qualify to be international if elements of more than one country are involved.

Consumer protection is the practice of safeguarding buyers of goods and services, and the public, against unfair practices in the marketplace. Consumer protection measures are often established by law. Such laws are intended to prevent businesses from engaging in fraud or specified unfair practices in order to gain an advantage over competitors or to mislead consumers. They may also provide additional protection for the general public which may be impacted by a product even when they are not the direct purchaser or consumer of that product. For example, government regulations may require businesses to disclose detailed information about their products—particularly in areas where public health or safety is an issue, such as with food or automobiles.

Contract Legally binding document establishing rights and duties between parties

A contract is a legally binding document between at least two parties that defines and governs the rights and duties of the parties to an agreement. A contract is legally enforceable because it meets the requirements and approval of the law. A contract typically involves the exchange of goods, service, money, or promise of any of those. "Breach of contract", means that the law will have to award the injured party either the access to legal remedies such as damages or cancellation.

<i>Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd</i>

Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1961] EWCA Civ 7 is a landmark English contract law case. It introduced the concept of innominate terms, a category between "warranties" and "conditions".

Supply of Goods (Implied Terms) Act 1973 United Kingdom legislation

The Supply of Goods Act 1973 was an Act of the Parliament of the United Kingdom that provided implied terms in contracts for the supply of goods and for hire-purchase agreements, and limited the use of exclusion clauses. The result of a joint report by the England and Wales Law Commission and the Scottish Law Commission, First Report on Exemption Clauses, the Act was granted the Royal Assent on 18 April 1973 and came into force a month later. It met with a mixed reaction from academics, who praised the additional protection it offered while at the same time questioning whether it was enough; several aspects of the Act's draftsmanship and implementation were also called into question. Much of the Act was repealed by the Sale of Goods Act 1979, which included many of the 1973 Act's provisions.

Rheem Manufacturing Company American HVAC manufacturer

Rheem Manufacturing Company is an American privately held manufacturer that produces residential and commercial water heaters and boilers, as well as heating, ventilating and air conditioning (HVAC) equipment. The company also produces and sells products under the Ruud brand name. It is a subsidiary of Paloma Industries. What became Rheem started in 1925 as a supplier of packaging to the petroleum industry, and is currently headquartered in Atlanta, Georgia in the United States. The company is one of the largest manufacturers of both water heating and HVAC equipment in the United States, and also produces and markets products in Argentina, Armenia, Australia, Bahrain, China, Chile, Brazil, Canada, Iraq, Kuwait, Mexico, New Zealand, Perú, Oman, Qatar, Saudi Arabia, Singapore, UAE, and Ukraine.

<i>Greenman v. Yuba Power Products, Inc.</i>

Greenman v. Yuba Power Products, Inc, was a California torts case in which the Supreme Court of California dealt with the torts regarding product liability and warranty breaches. The primary legal issue of the case was to determine whether a manufacturer is strictly liable in tort when an article he places on the market proves to have a defect that causes injury to a human being. The case was originally heard in a San Diego district court where the verdict was against the manufacturer. This verdict was appealed by the manufacturer to the Supreme Court of California which was presided by Gibson, C. J., Schauer, J., McComb, J., Peters, J., Tobriner, J., and Peek, J., and the opinion was delivered by Judge Roger J Traynor.


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