Warranties

Introduction
Students often buy defective products. When this happens, state and federal laws provide consumer protection remedies. This article will focus on the law of warranties. There are two kinds of warranties: express and implied.

What Is An Express Warranty?
Students often buy defective products. When this happens, state and federal laws provide consumer protection remedies. This article will focus on the law of warranties. There are two kinds of warranties: express and implied.

Oral Express Warranties
To create an enforceable oral express warranty, the seller does not have to use the words “warranty” or “guarantee”. It is enough that the seller during sales negotiations makes a specific statement to the consumer about the characteristics, quality, or performance of the product. A statement such as, “this used car has a rebuilt engine,” creates a legally enforceable warranty that the car will, in fact, have a rebuilt engine. If it does not, the buyer has several options whereby he or she may either enforce this promise or obtain compensation for its breach. The student buyer should seek legal advice from SLS about these options. Sometimes, general statements can create an express warranty, such as “this stereo system is in good condition.” However, mere sales hype or “puffing” by a seller that a certain consumer product is “the best in the world” or “will last a lifetime” in most cases does not create a warranty or promise which is legally enforceable.

Written Express Warranties
Sometimes the seller or manufacturer puts in writing certain promises about the characteristics, quality or performance of a consumer product. These promises may be in the sales contract or in a separate warranty document or both. It is a good idea for the buyer to insist that any oral promises about the product made during sales negotiations be included in the written contract. This will help avoid disputes later about what was actually promised. In some circumstances, the failure to include the promise in the contract may prevent the buyer from enforcing it. Under North Carolina law, contracts for the sale of goods costing $500.00 or more must be in writing to be enforceable in a court of law. We suggest that all contracts for the sale of goods be in writing and that the consumer keep the contract and any warranty documents in a safe place. The consumer should also keep a diary of all events that occur after any defect is discovered.

Federal Law Protections
If the seller or manufacturer of a consumer product provides a written warranty, or service contract, the Federal Magnuson – Moss Warranty Act provides certain protections for the consumer. The warranty document must fully and conspicuously disclose all the terms and conditions in simple language which can be easily understood. This law also requires the seller or manufacturer to designate whether the warranty is “full” or “limited”, and if “full”, to describe the consumer’s remedies. This law further preserves any implied warranties arising under state law (discussed below) and authorizes the award of attorney’s fees and court costs to a consumer who successfully sues the seller or manufacturer of a defective product.

What Is An Implied Warranty?
Under North Carolina law, an implied warranty is a warranty that automatically arises out of the circumstances of the sale of a consumer product if the seller is a “merchant with respect to goods of the kind.” Implied warranties are legally enforceable unless they are specifically disclaimed by the seller. There are no implied warranties if the seller is not a merchant and the doctrine of “let the buyer beware” applies.

Implied Warranty Of Merchantability
The essence of this warranty is that the seller and manufacturer of a consumer product impliedly promises that the product is merchantable, that is, that it is fit for its ordinary purpose. An answering machine will record messages. A boat will float. A computer will compute.

Implied Warranty Of Fitness For Particular Purpose
The essence of this warranty is that if the seller, at the time of contracting, has reason to know that a consumer is buying the product for a particular purpose and is relying on the seller’s skill or judgment to select or furnish a suitable product, then the seller impliedly promises that the product will be fit for the consumer’s purpose. For example, if a consumer tells a seller that he or she wants to buy shoes suitable for mountain climbing and relies on the seller’s judgment, the shoes must be suitable, in fact, for this purpose.

Disclaimer Of Warranties
North Carolina and federal law permit the seller, under certain circumstances, to disclaim or exclude express and implied warranties. Such disclaimer must be in writing and CONSPICUOUS. Language in the contract that the consumer product is being sold “AS IS” is generally an effective disclaimer of implied warranties. However, federal law prohibits the seller or manufacturer who has provided a written warranty or service contract from disclaiming or modifying implied warranties. The consumer should carefully read the contract and all warranty documents before completing the sales transaction.

Remedies
Legal remedies for breach of express and implied warranties vary depending on the terms of the sales contract, the warranty documents, and state and federal law. Sometimes the consumer may return the product and get a refund of the purchase price. Other times, the consumer may be required to give the seller notice of the defect and give the seller a chance to correct it. Remedies may be limited to repair or replacement. Under certain circumstances, the consumer may be able to collect from the seller of a defective product any extra money spent as a direct consequence of the supplier’s breach of warranty. The sales contract or written warranty may require that the consumer take certain steps such as go to an arbitration hearing with the seller or manufacturer, before pursuing remedies in court. The student consumer of a defective product should talk with an SLS attorney about the remedies he or she may have and what he or she needs to do under the terms of the sales contract and the law of warranties.

Verified June 2011