Warranties

In 1975, Congress enacted the Magnuson-Moss Warranty Act, the federal law governing warranties on consumer products. One of the goals of the Act is to encourage businesspersons to write your warranties in "simple and readily understood" language. A readable warranty serves the following purposes in addition to meeting the goal of the Magnuson-Moss Warranty Act:

  • A well-written warranty functions more effectively than a poorly written one as a legal instrument to define the rights and obligations of your customers and your company.

  • An easy-to-understand warranty can be an effective selling tool. It can create confidence in your product and your company. It can simplify for consumers the task of comparing warranties offered on similar products and can be one of the factors that persuades customers to purchase your product.

  • A simple, straightforward warranty will effectively tell customers what steps to take if a problem arises. This can aid both you and your customers in resolving problems quickly and efficiently and help to reduce consumer complaints.

Except for certain federal and state requirements, the extent of written warranty coverage that you offer - and even whether to offer a written warranty - is a decision for you to make based upon your company's individual situation. Before distributing your warranty do consult with a lawyer to make certain your warranty complies with all the requirements of federal and state law since state law varies. The offices of the attorneys general in the states where you do business are a good resource for specific state law information.

Understanding Warranties
Understanding the Magnuson-Moss Warranty Act
Titling Written Warranties as "Full" or "Limited"
Examples of Full Warranties, Limited Warranties, and Multiple Warranties
Stating Terms and Conditions of Your Written Warranty
Making Warranties Available Prior to Sale
Advertising Warranties
Offering Service Contracts

Writing Readable Warranties

Organizing a Written Warranty
Titling a Written Warranty "Full" or "Limited"
Writing Clearly and Simply
Making Your Warranty Visually Clear and Attractive
Testing Your Warranty to Make Sure Your Customers Understand It

Consumer Rights

Preventing Problems
Resolving Disputes
Sample Complaint Letter

 

Information courtesy of the Federal Trade Commission.