Magnuson-Moss Warranty Act

The Magnuson-Moss Warranty Act (P.L. 93-637) is a United States federal law (15 U.S.C. § 2301 et seq.). Enacted in 1975, it is the federal statute that governs warranties on consumer products.

The Act was sponsored by Senators Warren G. Magnuson of Washington and Frank Moss of Utah, both Democrats.

Purpose Of The Magnuson-Moss Act

According to the Report of the House of Representatives which accompanied the law (House Report No. 93-1197, 93d Cong 2d Sess.) the Magnuson-Moss act was enacted by Congress in response to the widespread misuse by merchants of express warranties and disclaimers.

The legislative history indicates that the purpose of the Act is to make warranties on consumer products more readily understood and enforceable and to provide the Federal Trade Commission with means to better protect consumers (Davis v. Southern Energy Homes, Inc. 305 F.3d 1268 (11th Cir. 2002)).

The statute is remedial in nature and is intended to protect consumers from deceptive warranty practices. Consumer products are not required to have warranties, but if one is given, it must comply with the Magnuson-Moss Act.

Definitions In The Magnuson-Moss Act

The Magnuson-Moss Act contains many definitions:

• A “consumer” is a buyer of consumer goods for personal use. A buyer of consumer products for resale is not a consumer.
• A “supplier” is any person engaged in the business of making a consumer product directly or indirectly available to consumers.
• A “warrantor” is any supplier or other person who gives or offers a written warranty or who has some obligation under an implied warranty.
• A “consumer product” is generally any tangible personal property for sale and that is normally used for personal, family, or household purposes. It is important to note that the determination of whether a good is a consumer product requires a factual finding, on a case-by-case basis. Najran Co. for General Contracting and Trading v. Fleetwood Enterprises, Inc., 659 F. Supp. 1081 (S.D. Ga. 1986).
• A “written warranty” is any written promise made in connection with the sale of a consumer product by a supplier to a consumer that relates to the material and/or workmanship and that affirms that the product is defect-free or will meet a certain standard of performance over a specified time.
• An “implied warranty” is one that is defined in state law. The Magnuson-Moss Act simply provides limitations on disclaimers and provides a remedy for their violation.
• A “full warranty” is one that meets the federal minimum standards for a warranty. Such warranties must be “conspicuously designated” as full warranties.
• A “limited warranty” is one that does not meet the federal minimums. Such warranties must be “conspicuously designated” as limited warranties.
• A “service contract” is different from a warranty because service contracts do not affirm the quality or workmanship of a consumer product. A service contract is a written instrument in which a supplier agrees to perform, over a fixed period of time or for a specified duration, services relating to the maintenance or repair, or both, of a consumer product. Agreements that meet the statutory definition of service contracts, but are sold and regulated under state law as contracts of insurance, do not come under the Act’s provisions.

Requirements of the Magnuson-Moss Act

The Act provides that any warrantor warranting a consumer product to a consumer by means of a written warranty must disclose, fully and conspicuously, in simple and readily understood language, the terms and conditions of the warranty to the extent required by rules of the Federal Trade Commission.

The FTC has enacted regulations governing the disclosure of written consumer product warranty terms and conditions on consumer products actually costing the consumer more than $15. The Rules can be found at 16 C.F.R. Part 700.

Under the terms of the Act, ambiguous statements in a warranty are construed against the drafter of the warranty.

Likewise, service contracts must fully, clearly, and conspicuously disclose their terms and conditions in simple and readily understood language.

Full Warranty Requirements Under a full warranty, in the case of a defect, malfunction, or failure to conform to the written warranty, the warrantor:

• must, as a minimum, remedy the consumer product within a reasonable time and without charge;
• may not impose any limitation on the duration of any implied warranty on the product;
• may not exclude or limit consequential damages for a breach of any written or implied warranty on the product, unless the exclusion or limitation conspicuously appears on the face of the warranty; and
• if the product, or a component part, contains a defect or malfunction, must permit the consumer to elect either a refund or replacement without charge, after a reasonable number of repair attempts.

In addition, the warrantor may not impose any duty, other than notification, upon any consumer, as a condition of securing the repair of any consumer product that malfunctions, is defective, or does not conform to the written warranty. However, the warrantor may require consumers to return a defective item to its place of purchase for repair.

Limitations Of The Magnuson-Moss Act

The Magnuson-Moss Warranty Act does not invalidate or restrict any right or remedy of any consumer under any other federal law, nor does the Act supersede the Federal Trade Commission Act as it pertains to antitrust actions.

The Act does not invalidate or restrict any right or remedy of any consumer under state law.

The Act is not the dominant regulation of consumer product warranties, and while it prescribes certain disclosures and restricts certain limitations on warranties, it leaves other warranty law untouched. Richardson v. Palm Harbor Homes, Inc., 254 F.3d 1321, 45 U.C.C. Rep. Serv. 2d 56 (11th Cir. 2001).

Although the Act covers warranties on repair or replacement parts in consumer products, warranties on services for repairs are not covered.

The federal minimum standards for full warranties are waived if the warrantor can show that the problem associated with a warranted consumer product was caused by damage while in the possession of the consumer, or by unreasonable use, including a failure to provide reasonable and necessary maintenance.

Remedies Under The Magnuson-Moss Act

The Act is meant to provide consumers with access to reasonable and effective remedies where there is a breach of warranty on a consumer product. The Act provides for informal dispute-settlement procedures and for actions brought by the government and by private parties.

The FTC has been mandated by Congress to promulgate rules to encourage the use of alternative dispute resolution, and full warranties may require mediation and/or arbitration as a first step toward settling disputes.

In addition, the federal government has the authority to take injunctive action against a supplier or warrantor who fails to meet the requirements of the act.

Finally, consumers may seek redress in the courts for alleged violations of the Magnuson-Moss Act.

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