The FTC's Rule on Disclosure of Written Consumer Product Warranty Terms and Conditions (the Disclosure Rule) requires a written warranty on a consumer product that costs more than $15 to be clear, easy to read, and contain certain specified items of information about its coverage.
To help you comply with the law and to make your warranty clear and easy to read, you may wish to refer to Writing Readable Warranties.
Basic Information Required for All Warranties
Under the FTC's Disclosure Rule, there are five basic aspects of coverage that your warranty must describe. It is useful to think of these as five questions which your warranty must answer:
What does the warranty cover/not cover?
Answering this question is quite simple when the warranty covers every type of malfunction or defect that may appear in all parts of the product. However, if not all parts or not all types of defects are covered, as in the "Counterpoint Carpet" example in Examples of Full Warranties, Limited Warranties, and Multiple Warranties, you should clearly describe the scope of coverage.What is the period of coverage?
If coverage begins at some point in time other than the purchase date, your warranty must state the time or event that begins the coverage. In the "Counterpoint Carpet" example in Examples of Full Warranties, Limited Warranties, and Multiple Warranties, warranty coverage begins when the product is installed, which may be different from when the product is purchased.Also, you must make it clear when coverage ends if some particular event would terminate it. In the limited warranty "Magnifisound Corporation" example, coverage lasts until the first purchaser transfers the product to someone else.
What will you do to correct problems?
This requires an explanation of the remedy you offer under the warranty. This could be repair or replacement of the product, a refund of the purchase price, or a credit toward subsequent purchases.If necessary for clarity, you must also explain what you will not do. This requires a description of the types of expenses, if any, that you will not cover. These might include, for example, labor charges, consequential damages (the costs of repairing or replacing other property that is damaged when the warranted product fails, such as food spoilage when a refrigerator breaks down), or incidental damages (the costs a consumer incurs in order to obtain warranty service, such as towing charges, telephone charges, time lost from work, transportation costs, and the cost of renting a product temporarily to replace the warranted product).
How can the customer get warranty service?
Your warranty must tell customers who they can go to for warranty service and how to reach those persons or companies. This means that the warranty needs to include the name and address of your company, and any person or office customers should contact. If they can call you locally or toll-free, you can give the telephone number instead of the address. If you want customers to contact your local or regional service centers first, explain how this should be done. See the examples in Examples of Full Warranties, Limited Warranties, and Multiple Warranties and the Bauhaus Mobile Home" example.How will state law affect your customer's rights under the warranty?
Your warranty must answer this question because implied warranty rights and certain other warranty rights vary from state to state. Rather than require a detailed explanation about this on a state-by-state basis, the FTC adopted the following "boilerplate" disclosure to address this issue. It must be included in every consumer product warranty:This warranty gives you specific legal rights, and you may also have other rights which vary from state to state.
Specific Information Required When Your Warranty Contains Certain Optional Terms and Conditions
