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Consumer Sourcebook

Preface | User's Guide | Table of Contents | Print Sourcebook Adobe Acrobat Reader Symbol

Warranties

A warranty is a promise by a maker, distributor, or seller of a product that the product will have specific characteristics or will suit specific uses. Warranties can be either written or oral, although written warranties are more common. Consumers usually receive written warranties with the purchase of new cars, televisions, appliances, and electronic equipment. Some sales contracts may already incorporate a warranty.

An express warranty arises out of an agreement between the seller and buyer and can be either written or oral. An incorporated or implied warranty is never in writing. An implied warranty is imposed by law.

You are entitled to protection under Federal and state laws when you purchase certain goods. The primary statutes governing warranties are the Uniform Commercial Code (UCC) RSA 382-A:2-316 and RSA 382-A:2-329 and the federal Magnuson-Moss Warranty Act.

The Law

The Uniform Commercial Code is a "model" law governing numerous commercial transactions. All fifty states have enacted versions of the UCC, with some variations from one state to another. New Hampshire's version of the UCC is codified at RSA 382-A. Article 2 of the UCC governs the sale of "goods" and is the part of the UCC most often involved in consumer sales.

The UCC defines a warranty as a promise or affirmation made by the seller to the buyer of goods that is relied on by the buyer in making a decision to buy a product, and so becomes part of the sales contract between the buyer and seller. Under both the UCC and common business practice, warranties can be either express or implied.

Express Warranties

In a sales transaction, consumers should carefully read all documents provided with the merchandise to see whether there is an express written warranty.

Example: Polly Pasta goes to her local StupendoMart and buys an aluminum saucepan set made by the HotStuff Manufacturing Company. Polly takes the pans home and immediately cooks all her favorite dishes in them. To her amazement and horror, the handles of all the pans break, through no fault of hers. She looks at the box in which the pans were packed and finds a "limited warranty" which promises that the company will replace defective pans at no cost. Polly has the right to replacement pans in accordance with the terms of the written express warranty.

Express warranties can also be oral, where a seller's oral statement to a buyer concerning the sale of a particular good can trigger an express warranty. This is, however, difficult to prove. For an oral express warranty to arise out of a sales transaction, the seller will have had to include in the sale pitch statements such as promises or factual statements about a particular product's ability to satisfy certain requirements.

Example: Sammy Smallton purchases a used car from Swifty's Used Cars. During the sales pitch, Mr. Swifty tells Sammy that the oil spot under the transmission was "nothing to worry about" and that Swifty's would fix the leak "if it becomes a problem." After 100 miles, the car will not stay in gear, and Mr. Swifty refuses to fix it. Mr. Swifty's oral statements could be construed as an express warranty to repair that transmission problem. On the other hand, had Mr. Swifty merely stated to Sammy that the car "was a beaut" or that he thought the car was a "great bargain," it is unlikely that any warranty was created.

For an oral express warranty to take effect, it requires neither the seller's use of explicit words such as "warranty" or "guarantee" nor the seller's intent to make a warranty. On the other hand, was the seller to merely state an opinion about a particular good to the buyer, this alone would not trigger an express warranty. The same is true of standard sales embellishments.

The UCC (RSA 382-A:2-329) requires that manufacturers who provide an express warranty also provide warranty services if the consumer goods have a retail value greater than $100. The services must include:

  • An address or toll-free number for information on warranty service
  • "Adequate" direct factory service
  • At least one service representative in New Hampshire to provide services or repairs under the terms of the express warranty.

When a manufacturer designates a service representative, it must make parts available to the service representative within 30 days of receiving an order (some exceptions apply) and must pay the service representative the amount for parts and labor that the representative normally and reasonably charges for like service and repairs. A court may order persons or companies failing to comply with this law to provide warranty service, to pay a civil penalty of $25 for each day of noncompliance, or to replace the item under warranty.

Implied Warranties

Some warranties are "implied" by law. An implied warranty is a promise that the good will have characteristics or uses that the maker, distributor, or seller do not expressly state. An implied warranty assumes that the product is fit, safe and will perform the function for which it was purchased. For example, if you rely on a seller's skill or judgment to select a suitable product and the seller knows your purpose for buying the product, then there is an implied warranty that the product sold will suit the intended purpose.

The implied warranty most useful to consumers is the "implied warranty of merchantability." It requires that goods be of "fair-average quality," and adequately packaged. Moreover, the goods must conform to promises or statements of fact made on the container or label, and must suit their intended use.

Example: Polly Pasta buys a Miraco Food Mixer. She unpacks the mixer from its box when she gets it home and tries it out; the mixer, however, will not mix food. In addition to any express warranties made by the manufacturer or seller of the mixer, Poly can rely on the implied warranty of merchantability. This warranty may become important in cases where the manufacturer or seller of the product makes no express warranties and unsuccessfully tries to disclaim implied warranties.

A seller, distributor, or manufacturer will often try to "disclaim" a warranty to modify or limit its protection. In New Hampshire, the UCC (RSA 382-A:2-316) provides that a merchant who sells a consumer good may not disclaim the warranty of merchantability or fitness unless the merchant gives the buyer a "conspicuous writing" disclaiming the warranty. Furthermore, the written disclaimer must disclose:

  • That the goods are sold "as is" or "with all faults"
  • The buyer assumes the entire risk as to the goods' quality and performance
  • If the goods prove defective after purchase, the buyer, not the manufacturer, distributor or retailer, must assume all service or repair costs

Example: Sammy Smallton purchases a used car from Swifty's Used Cars. During the sales pitch, Mr. Swifty tells Sammy that the oil spot under the transmission is "nothing to worry about" and that Swifty's would fix the leak "if it becomes a problem." After 100 miles, the car will not stay in gear, and Mr. Swifty refuses to fix it. The bill of sale says "As Is As Shown" on it face, but does not contain the other statements required by RSA 382-A:2-316. The disclaimer of warranty is probably ineffective, and Sammy may persuade a court to order Swifty's Used Cars to repair the car. Also, as stated before, Mr. Swifty's oral statements could be construed as an express warranty to repair transmission problems.

Finally, the buyer must sign the disclaimer document. This statute can be particularly important in the sale, and purchase, of used cars. (For more information about used cars, refer to the section entitled Autos: Used.)

Magnuson-Moss Warranty Act

The Magnuson-Moss Warranty Act (MMWA), a federal law passed by Congress in 1975, standardized written express warranties to prevent consumers from being confused or misled about what consumer product warranties cover. MMWA is essentially a disclosure act requiring sellers of goods to clearly disclose the terms of any written warranties provided to consumers.

Under MMWA, a written warranty is either a "full" or a "limited" warranty. A full warranty must guarantee that during a specified period of time any defective parts will be repaired at no charge. If the defect cannot be repaired, the manufacturer must replace the item or give the consumer a refund. On the other hand, if the warranty contains any "exclusions" or parts not covered, then the warranty is a limited warranty. Most consumer product warranties are limited warranties.

Whether full or limited, each warranty must provide the following information in plain language:

  • A description of what the warranty does and does not cover
  • A step-by-step procedure the consumer must follow to obtain services
  • A description of what repairs or replacements will be made if the product is faulty
  • A description of what expenses the consumer, and the manufacturer, will pay on a faulty product

Points To Remember

  • Read a warranty carefully to find out what is, and is not, covered.
  • Comparison shop for warranties as you would for products because warranties vary widely in what they cover.

To compare warranties, ask the following questions:

  • Is there a parts manual for do-it-yourself repairs and are parts available locally?

Warranty service requirements are important:

  • Does the product have to be packaged in its original materials?
  • Is there a local repair shop?
  • If not, where will the product have to be shipped?
  • How long will the repair servicing take?

Warranties may not be transferable to other owners, so make sure you know who is covered. (For example, if you want to sell your lawn mower that is still covered under its manufacturer's warranty, the warranty would extend to the next owner only if allowed by the warranty.)

Where To Go If You Have A Problem

If you have a problem with a product, check to see if its warranty is still in effect. Next, call the store where you purchased the product to see if it will either replace or repair the item for you. If the store is unable to assist you, contact the manufacturer (ask the retailer or look on the warranty card for the address or telephone number). The manufacturer may refer you to an authorized service center. (For information on negotiating for repairs, refer to Remedies: Effective Negotiation) If you are unsuccessful in getting your problem addressed, the following agencies may be of assistance:

Contact the NH Consumer Protection & Antitrust Bureau:

NH Consumer Protection & Antitrust Bureau
33 Capitol Street
Concord, NH 03301-6397
603-271-3641

If a warranty does not follow the guidelines stipulated by the Magnuson-Moss Warranty Act, contact the Federal Trade Commission:

Federal Trade Commission
600 Pennsylvania Avenue, NW
Washington, DC 20580
1-877-FTC-HELP or 1-877-382-4357 (toll-free)

Contact the Better Business Bureau of New Hampshire.

Better Business Bureau
25 Hall Street, Suite 102
Concord, NH 03301
224-1991, 228-3789, or 228-3844

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New Hampshire Department of Justice | 33 Capitol Street | Concord, NH | 03301
Telephone: 603-271-3658