What is an express warranty?
What are the different types of express warranties?
What are some of the applicable laws imposing warranties?
In this article, we will break down the notion of express warranties so you know all there is to know about it.
We will look at its definition, the different types of warranties, forms of warranty, how express warranties are created, how they are enforced, applicable laws and more.
Are you ready to find out?
Let’s get started!
Express warranty definition
An express warranty is when one party to a contract, the seller, agrees to provide another party to a contract, the buyer, commitments to repair or replace a defective product or a service.
In other words, the seller guarantees the quality of the sold goods or services to the buyer for a certain period of time.
According to Investopedia, express warranty is defined as follows:
“An express warranty is an agreement by a seller to provide repairs or a replacement for a faulty product, component or service within a specified time period after it was purchased. Buyers rely on these promises or guarantees and sometimes purchase items because of them.”
According to the BusinessDictionary, an express warranty is:
“Spoken or written promise concerning the character, nature, performance, purpose, quality, state, or use of an item, made by a seller while negotiating with a buyer.”
What is an express warranty?
Express warranties are promises or commitments made by a seller as to the good quality of their products and services.
Unless there is a minimum legal requirement, the seller can define the warranty to reflect the scope and nature of the commitment it is willing to make to the buyer.
For example, some companies will offer a “30 days satisfaction guaranteed or your money back”.
That’s an express warranty that if you do not like the product, you have the ability to return it for a full refund within 30 days.
Exaggerated opinions or statements are not considered express warranties.
For example, if a car dealer sells you a car and claims that “it’s faster than a rocket”, a buyer cannot pursue the dealer for claiming the car was not effectively faster than a rocket.
When is an express warranty created?
An express warranty is created in the following scenarios:
- When the seller makes a statement of fact or a promise about the goods sold leading the buyer to expect the goods to conform to the statement or promise
- When a seller describes its products to have certain factual characteristics leading the buyer to expect the goods to conform with such description
- When the seller provides a sample or model of the goods leading a buyer to expect the goods to reflect what was presented in the sample or model
The common thread is that a purchaser is lead to expect a certain level of quality, performance or standard.
What are the different forms of warranty?
There are two forms of express warranties, written or oral.
A written warranty is when a seller or service provider contractually defines or expressly stipulates what is under warranty and how.
An oral warranty or a promise made by spoken words is another form of warranty where the buyer relies on the representations made about a product’s quality, characteristic or fitness for a particular use.
On the other hand, implied warranties do not need to be expressed in writing or verbally as it automatically covers the goods of certain minimum value.
What are the different types of warranty?
There are three forms of warranties:
- Written express warranty
- Verbal express warranty
- Implied warranty
Let’s quickly go over what is an express warranty vs implied warranty.
Written express warranty
An express warranty or “expressed” warranty is when a company makes a specific written or oral promise that the goods sold or services offered will meet a specific standard or level of quality.
The seller guarantees the quality, performance, lifespan or durability of its product.
Express warranties can be quite extensive and interesting for consumers.
It’s important to note that for a seller to be responsible for express warranties, the words “express” or “warranty” does not need to be used for a product or service to be covered by a warranty.
Express warranties are contractual commitments and obligations producing legal effects between the parties and enforceable in court.
Verbal express warranty
A verbal express warranty is when a seller verbally or orally promises a certain quality or performance to the buyer.
Unless written express warranties, it may be challenging to prove the existence of the verbal promise or warranty.
For example, if you purchase used tires for your car from a dealer and they verbally advise you that the tires are good for another 20,000 miles, that is a verbal express warranty.
However, if the tires only last 5,000 miles, you may have the challenge of proving that the dealer had promised you that it will last for at least 20,000 miles.
An implied warranty is when a consumer or buyer expects a standard or level of quality when buying a product or a service.
Express warranty is a specific guarantee offered by the seller whereas implied warranty is a guarantee that a product or service will work as claimed.
This is referred to as the implied warranty of merchantability.
For example, if you buy a laptop computer, you would expect that it operates properly immediately upon purchase.
An implied warranty is a guarantee that is “implied” or “expected” by the buyer of the product.
Under U.S. federal law, merchantable is defined as follows:
- The product conforms to the standard of the trade
- When used normally, the product is fit for its intended purpose
- The product must be uniform in quality and quantity
- The product must be packaged and have a label
- The product must meet the specifications on the label
Implied warranties are not as extensive as express warranties.
They will provide minimum protections expected by consumers in most cases.
What is the scope of an express warranty?
Companies will define the scope of the express warranties they offer their clients.
Generally, companies entice consumers or prospects to buy from them based on express warranty commitments.
For example, a vendor may guarantee a full refund to the client if the product does not work for a certain period of time or does not perform as it was promised.
Essentially, express warranties represent a seller’s promise of product characteristics, nature, performance, purpose, quality, state, or use of an item.
Sellers will stipulate their contractual warranties as follows:
- They make an affirmative promise that their product or service will work a certain way or perform a certain way
- They will describe how their product will work in the way they promise
- They will describe the nature of the goods eligible for the warranty
- They’ll define usage scenarios where the warranty may be voided
- They will outline what rights are granted to the buyer such as product replacement, refund or other
- They will outline how long the product is eligible under the warranty
Unless there is a legal requirement or minimum warranty obligations imposed on the vendor, organizations are free to define the scope and nature of the warranties they offer their clients.
Laws imposing warranties
An express warranty is a result of what a buyer and a seller mutually agree and negotiate in their sales contract.
In some situations, the law can impose warranty obligations on a seller, such as:
- Magnuson-Moss Warranty Act
- Uniform Commercial Code
- Consumer protection laws
Magnuson-Moss Warranty Act
Under the Magnus-Moss Warranty Act, the law imposes that organizations provide a written and express warranty to buyers if they sell their products for more than $15.
The Magnuson-Moss Warranty Act was enacted in the United States in 1975 to govern warranties on consumer products.
Under this law, a merchant is not obligated to offer warranties to its clients but if it does it must observe the requirements of the law.
The objective of this law is to prevent manufacturers and vendors from misusing express warranty provisions or disclaimers to a consumer’s detriment.
For example, the Magnus-Moss Warranty Act requires that merchants provide consumers with a written warranty, fully and conspicuously disclosed, drafted in easy-to-understand language and properly describe the terms and conditions of the warranty.
Uniform Commercial Code
The Uniform Commercial Code or UCC applies in all American states except for Louisiana and covers the sale of goods only, not services.
UCC imposes certain warranties on sellers of goods and the rules on how to disclaim such warranties.
When UCC applies to the sale of a good, the law imposes an express warranty on affirmative promises made by a company.
In other words, if a company affirmatively claims that its product is designed to withstand sub-zero temperatures for an extended period of time, that is an express warranty they will be held accountable to provide.
Under UCC, sellers have the ability to disclaim express warranties in certain cases by following specific rules.
Consumer protection laws
In most jurisdictions, under the relevant consumer protection laws, companies can be held accountable for the content of the advertisement of their products and services.
If a company advertises that its products have a certain level of quality and is durable, then consumers buying the product will expect that level of quality and durability.
As a result, the content of a company’s advertisement can have an impact on the warranty obligations imposed on the company.
Enforcing express warranties
When a product or service is sold with express warranties, the expectation is that it meets the expected standard, level of quality and reliability.
If the product does not meet the guarantee about the quality of goods or services made by a seller, the purchaser or buyer can request the product to be fixed, replaced or even refunded.
The seller must legally bound to live up to its promise and guarantee.
If not, the seller will be in breach of its express warranty terms.
Generally, a buyer may exercise any of the following rights when a company did not live up to its promise:
- Buyer cancelling the contract if the nonconformity has a material impact on the contract or benefits to the consumer
- Seller assuming the costs of a substitute product
- Buyer getting monetary compensation for the breach of warranty
- Seller replacing the product for another product
- Seller fixing the defect in the product
- Seller refunding the purchase price
Breach of express warranties
Typically, in every jurisdiction, if consumer protection laws apply or specific laws impose express warranties on the seller, the consumer may exercise a recourse under that law.
Most consumer protection legislation will offer consumers the possibility to lodge a consumer complaint against the vendor in breach of its warranty obligations.
In cases where the breach of warranty is in a purely commercial business-to-business relationship, one contracting party may have legal recourse against the other such as breach of contract claim or request for specific performance.
Express warranty examples
The most notable example of express warranties relates to car manufacturers or sellers of home appliances.
Car manufacturers are notorious for providing express warranties about the quality, safety, performance or other aspects of their vehicles.
For example, a car manufacturer can provide its buyers up to 10 years of warranty for any defects or malfunctioning of its drivetrain.
This means that within 10 years and provided the buyer reasonably used the vehicle, the manufacturer will assume all repair costs for any defect or malfunctioning of the car’s drivetrain.
A car manufacturer may make advertisements about how it consumes less gas per mile travelled.
When a company makes such commitments about its gas consumption, then consumers can expect the car to perform as intended.
Companies selling home appliances are well-known in giving consumers express warranties on their products.
If you buy a washing machine or a dishwasher, you expect that machine to work for a few years.
Manufacturers may offer consumers 1, 3 or 5 years of warranty on their product should it not work as it was stated.
Express warranties are offered by many companies.
It’s important to understand what they are so you can spot them when they are created.
A seller does not have to use the words “warranty” or “express” to commit to express warranties.
If a seller makes a statement of fact or a promise about its product or services, you can expect that to be the expression of a warranty.
We hope this article helped you better understand the express warranty so you are better equipped in dealing with it.