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In business law, a warranty is a promise that something sold is in good condition. A warranty may be express or implied. A breach of warranty occurs when the promise is broken, i.e., a product is defective or not as should be expected by a reasonable buyer. A warranty deed is a promise that the buyer's title to a parcel of land will be defended.
An express warranty is one in which the seller indicates specific qualities of the goods, such as "waterproof" or "hypoallergenic." It is nearly impossible to disclaim an express warranty without creating a contradiction. If the goods fail to perform as advertised or as shown in a sample, it is a breach of express warranty.
Implied warranty
The warranty of merchantability is implied, unless expressly disclaimed by name, or the sale is identified with the phrase "as is" or "with all faults." To be "merchantable", the goods must reasonably conform to an ordinary buyer's expectations, i.e., they are what they say they are. For example, a mislabeled package would violate the implied warranty of merchantability because it does not contain what the purchaser expects. In Massachusetts consumer protection law, it is illegal to disclaim this warranty on household goods sold to consumers. State nickname: Bay State Other U.S. States Capital Boston Largest city Boston Governor Mitt Romney Official languages English Area 27,360 km² (44th) - Land 20,317 km² - Water 7,043 km² (25. ...
Consumer protection is government regulation to protect the interests of consumers, for example by requiring businesses to disclose detailed information about products, particularly in areas where safety or public health is an issue, such as food. ...
The warranty of fitness for a particular purpose is implied when a buyer relies upon the seller to select the goods to fit a specific request. For example, this warranty is violated when a buyer asks a mechanic to provide snow tires and receives tires that are unsafe to use in snow. This implied warranty can also be expressly disclaimed by name, thereby shifting the risk of unfitness back to the buyer.
Another implied warranty is the warranty of title, which implies that the seller of goods has the right to sell them (e.g., they are not stolen, or patent infringements, or already sold to someone else). This theoretically saves a seller from having to "pay twice" for a product, if it is confiscated by the rightful owner, but only if the seller can be found and makes restitution.
Breach of warranty A warranty is violated when the promise is broken. When goods are not as should be expected, at the time the sale occurs, whether or not the defect is apparent. The seller should honor the warranty by making a refund, repair, or replacement. The sale starts the time under the statute of limitations for starting a court complaint for breach of warranty if the seller refuses to honor the warranty. This period is often overlooked where there is an "extended warranty" in which a seller or manufacturer contracts to provide the additional service of replacing or repairing goods that fail within the extended period. However, if the goods were defective at the time of sale, and the relevant statute of limitations has not expired, then existence or duration of any "extended warranty" is secondary: there was a breach of a primary warranty for which the seller may be liable. It could be an unfair and deceptive business practice (a statutory type of fraud) to attempt to avoid liability for breach of a primary warranty by claiming expiration of the irrelevant extended warranty. A statute of limitations is a statute in a common law legal system setting forth the maximum period of time, after certain events, that legal proceedings based on those events may begin. ...
United States situation Most states in the United States have passed laws giving individuals and businesses a right to sue in court for unfair and deceptive business practices. ...
For example, a consumer buys an item that was discovered to be broken or missing pieces before it was even taken out of the package. This is a defective product and can be returned to the seller for refund or replacement, regardless of what the seller's "returns policy" might state (with limited exceptions for second-hand or "as is" sales), even if the problem wasn't discovered until after the "extended warranty" expired. Similarly, if the product fails prematurely, it may have been defective when it was sold and could then be returned for a refund or replacement. If the seller dishonors the warranty, then a contract claim can be started in court.
- See also product liability where liability for a defect causing a personal injury may go well beyond a warranty period, based upon negligent design or manufacture, or even strict liability.
Product liability encompasses a number of legal claims that allow an injured party to recover financial compensation from the manufacturer or seller of a product. ...
Strict liability is a legal doctrine in tort law that makes a person responsible for the damages caused by their actions regardless of culpability (fault) or mens rea. ...
Extended warranty In retail business, a warranty (or "extended warranty") commonly refers to a guarantee of the reliability of a product under conditions of ordinary use. It is called "extended" warranty because it covers defects that could arise some time after the date of sale. Should the product malfunction within a stipulated amount of time after the purchase, the manufacturer or distributor is typically required to provide the customer with a replacement, repair, or refund. Such warranties usually do not cover acts of God, owner abuse, malicious destruction, commercial use, or anything, for that matter, outside of a mechanical failure incurred with normal personal usage. Most warranties exclude parts that normally wear out, and supplies that must be periodically replaced as they are normally used up (e.g., tires and lubrication on a vehicle). An extended warranty may be included in the purchase price, or optionally extended for an additional fee, and may be for some ambiguous ordinary "lifetime" of the product (not the customer). An extended warranty is a lengthened warranty offered to purchasers of products. ...
In engineering in general, reliability is the capacity of a component or a system of such components to perform as designed. ...
Act of God or force majeure(French, meaning greater force) are common legal terms for events outside of human control, such as sudden floods or other natural disasters, for which no one can be held responsible. ...
A manufacturer or distributor may be required to carry reserve funds on its financial balance sheet to cover potential services or refunds that may arise for any products still covered "under warranty". In formal bookkeeping and accounting, a balance sheet is a statement of the financial value (or worth) of a business or other organisation (or person) at a particular date, usually at the end of its fiscal year, as distinct from a profit and loss statement (P&L, also known as...
There are also third-party warranty providers who sell optional "extended warranty" contracts on certain products, which amount to having an insurance contract for the product. These third parties range from well known store chains, such as Best Buy and Circuit City, to independent, often underwritten companies such as Warranty Direct. As with other types of insurance, the companies are gambling that the products will be reliable, that the warranty will be forgotten or voided, or that any claims made can be handled inexpensively. An Insurance contract determines the legal framework under which the features of an insurance policy are enforced. ...
Typical Best Buy store Best Buy Co. ...
Circuit City (NYSE: CC) is the second largest electronics retailer in the United States. ...
Many people do not realize that extended warranties are not always provided through the manufacturer, but in some circumstances it may work to the consumer's benefit. For instance, when an auto warranty is provided through a dealership from the manufacturer, repairs on the vehicle are reimbursed at a lower negotiated rate. Some mechanics might fraudulently attempt to defer the needed repair until the warranty has expired so that the ordinary (higher) shop rate will apply. The third party warranty, while often more expensive, can be worth the price difference because it will cover the higher shop rate as well, and may even permit the customer to select a different mechanic outside the dealership.
See also Commercial law or business law is the body of law which governs business and commerce and is often considered to be a branch of civil law and deals both with issues of private law and public law. ...
Consumer protection is government regulation to protect the interests of consumers, for example by requiring businesses to disclose detailed information about products, particularly in areas where safety or public health is an issue, such as food. ...
Due diligence is the effort a party makes to avoid harm to another party. ...
External Links - (USA) Federal Trade Commission: Warranty Information
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