Product Warranties & Service Contracts  

When you buy a new product, it may come with an express warranty. An express warranty guarantees the product is of a certain quality. It also guarantees the product will work in a certain way for a certain amount of time. A warranty can be oral or in writing. Sometimes written warranties are in the advertising about the product. Sometimes they are in signs posted in the seller’s business. Opinions about the product or service are generally not considered warranties. 

A federal law called the Magnuson-Moss Warranty Act covers written warranties. It applies to written warranties on consumer products that cost more than $15.00. You have a right to read the warranty before you buy the product. The warranty must be clear, easy to read, and contain certain information. The warranty will tell you what your rights are if the product does not work properly. It will state whether you get a refund, repair or replacement of the product if it is defective. 

The written warranty must describe which parts and what types of repairs it covers. If it is not stated in the written warranty, it is probably not covered. Some warranties may require you to pay for labor charges for repairs. Most warranties will not cover any incidental expenses, like shipping. They also will not cover damages caused by a non-working product. So if you lose $1000 worth of food from a non-working refrigerator, the warranty will not cover it. 

The warranty must also tell you how long the warranty covers the product. The time generally runs from the date you bought the product or service. The warranty must state whether certain conduct will void the warranty.  For example, selling or transferring the product may void the warranty. Having an unauthorized dealer try to repair the product may void the warranty. Using the product in the wrong way may also void the warranty. You should make sure you understand these terms and do not do anything to void your warranty. 

To protect yourself and avoid problems, you should do the following: 

• Read the warranty carefully before you buy the product; 
• Save your receipt and keep it with the warranty; 
• Perform all suggested maintenance on the product; and 
• Use the product only according to the manufacturer’s instructions. 

When you buy certain products, you may be able to buy a separate service contract. Service contract are usually available for vehicles, large electronics and appliance. Service contracts provide repair and maintenance of the product. They do not cover problems caused by misuse of the product or failing to maintain it properly. Also, service contracts cover only certain parts or certain types of repairs. If the service contract does not mention a part or repair, you should assume it is not covered. You have to notify the seller within a certain amount of time under the service contract. So make sure you understand those time limits as well. 

There also may be a deductible in your service contract. This is a dollar amount you must pay before the service contract will cover the repairs. Compare the amount of the deductible to the value of the product and likely cost of repairs. The service contract may not be worth what you pay for it.  It may be cheaper to replace the product if it breaks.  

Make sure you understand what the warranty covers before you buy a service contract. You may be buying protection that you don’t actually need. It may be better to wait until your warranty expires and then buy a service contract. You do not have to buy the service contract when you buy the product.  

Legal Editors: Mark Grossman, Esq. and C. Jaye Berger, Esq., May 2018