The Magnuson-Moss Warranty Act (MMWA) regulates the use of warranty and disclaimer provisions by merchants who sell consumer products under warranty. It regulares how you present warranties to purchasers and applies to full and limited warranties on goods (but not repair services).
While there is no requirement for merchants to provide warranties, if a warranty is provided, it must comply with MMWA requirements, so this blog provides an overview of these requirements, along with potential remedies you should be aware of.
The Requirements of the Magnuson-Moss Warranty Act Explained
In order to comply with the FTC’s requirements, merchants who warrant consumer products must disclose the terms and conditions of the warranty in simple and readily understandable language.
When you offer a limited warranty, the disclosure provisions are especially important, since the consumer must understand all the limitations. If you fully warrant a product against defect, you must comply with the following requirements:
- Exercising of Warranty Rights: You may not require a consumer to take any steps to enforce their warranty rights, other than notifying you of a defect or related issue and returning to the shop for repair.
- Repair or Replace: The product must be repaired or replaced without charge within a reasonable period of time. If the product or a component part still has a defect after reasonable efforts have been made to repair it, the consumer can either receive a refund or a free replacement.
- Limitations on Implied Warranties: There is no limitation on the duration of implied warranties.
- Limitations on Damages: The disclaimer of liability for consequential damages must be clearly written on the warranty document if you intend to limit your liability.
- Branded Components: Warranty provisions cannot be tied to the use of branded parts or materials.
The above standards are not required if you can demonstrate that the cause of a defect or malfunction was damage, failure to maintain, or improper use of the product.
Remedies under the Magnuson Moss Warranty Act
A civil action can be brought by the FTC or a private party under the MMWA.
- A FTC action typically seeks an injunction barring a merchant’s practice.
- Private parties can sue for damages in state or federal courts. There must be at least $50,000 in damages in controversy or 100 plaintiffs in a class action in order to file a federal court action. Plaintiffs who prevail may recover actual damages, court costs, and attorneys’ fees.
Additionally, the Act sets forth informal dispute-resolution procedures for resolving warranty disputes and MMWA violations. In the sales contract, you may require arbitration or mediation for disputes regarding full warranties.
Conclusion
Ensuring compliance with federal laws can be challenging, no matter how long you’ve been in business. If you sell warrantied products, having outside counsel makes it easier to ensure compliance and address any related issues that may arise. Get in touch with Aftermarket today to discuss your specific needs and learn how our general counsel services can help.
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