Generally, if you wish to impose on your customers any obligations other than notifying you that they need service, you must state these obligations in your warranty. Also, if you wish to establish any other conditions, limitations, or terms that you intend to enforce, you must state them in your warranty; you cannot have "hidden" requirements. An example of such a condition or limitation would be a provision voiding the warranty if the serial number on the product is defaced.
There are also a number of other disclosures you must make in your warranty if it contains certain optional terms and conditions. These requirements are explained in the following paragraphs.
If your warranty contains a provision that restricts the duration of implied warranties, the Disclosure Rule requires you to include a statement that state law may override such restrictions. This is required because some states prohibit any restrictions on implied warranties. The requirement applies only to limited warranties, because only in limited warranties can you restrict the duration of implied warranties. This is discussed in Titling Written Warranties as "Full" or "Limited". To tell consumers that state law may not permit such a restriction, the Disclosure Rule requires you to use the following language:
Some states do not allow limitations on how long an implied warranty lasts, so the above limitation may not apply to you.
If your warranty contains a provision intended to restrict or eliminate your potential liability for consequential or incidental damages, you must include a statement that state law may not allow such a provision. To inform consumers that state law may not permit such a restriction, the Disclosure Rule requires that you use the following sentence:
Some states do not allow the exclusion or limitation of incidental or consequential damages, so the above limitation or exclusion may not apply to you.
If your warranty contains a provision that restricts who has rights under the warranty, you must include a statement explaining specifically who is covered. For example, if your limited warranty is valid only for the first purchaser, your warranty must state that. Note that this applies only to limited warranties. A full warranty must cover anyone who owns the product during the period of coverage, as discussed in Titling Written Warranties as "Full" or "Limited".
If your warranty contains a provision that requires your customers to use a dispute resolution mechanism before suing under the federal Magnuson-Moss Warranty Act for breach of warranty, you must include:
a statement informing consumers that they can sue under state law without first using the mechanism, but that before suing under the Magnuson-Moss Act, they must first try to resolve the dispute through the mechanism; and
information and materials about the dispute mechanism, including the name and address or a toll-free telephone number, or a form for filing a claim.
Of course, if you include a dispute resolution requirement in your warranty, the informal dispute resolution mechanism must comply with the FTC's Dispute Resolution Rule. This is discussed in How the Magnuson-Moss Act May Affect Warranty Disputes.
The example below shows how to make the required disclosures about an informal dispute resolution mechanism that you require customers to use before taking a dispute to court.
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Bauhaus Mobile Homes, Inc. What This Warranty Covers What This Warranty Does Not Cover How Long The Warranty Lasts How To Get Service Bauhaus Mobile Homes, Inc. Bauhaus will send a representative to your home to inspect the problem and to correct it if possible. All service under this warranty will be performed at your home site. What To Do If You Are Not Satisfied With Service If you believe your dealer and Bauhaus have not performed as stated in this warranty, you may submit a request for further consideration to the National Reconciliation Board of Home Owners and Producers ("NRBHOP"). You should make any such request by mailing the attached "Request for Dispute Resolution" form to NRBHOP, or by sending a letter specifically demanding such dispute resolution and identifying yourself, Bauhaus, the defect, and the remedy you seek to this address: NRBHOP Upon receiving your "Request for Dispute Resolution, NRBHOP will notify Bauhaus and ask for a response to your complaint. If Bauhaus disagrees with your complaint, NRBHOP will arrange for informal dispute settlement between you and Bauhaus. See the section of your Owners Manual entitled "The NRBHOP Program" for more detailed information about how the informal dispute settlement process works. You may not file suit against Bauhaus under the Magnuson-Moss Warranty Act until your claim has been submitted to NRBHOP for informal dispute settlement and a decision has been reached, or you have waited 40 days for a decision following your submission of a Request for Dispute Resolution, whichever comes first. However, you may be entitled to file suit under state laws without waiting. How State Law Applies |
