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The New E-Warranty Act: Manufacturers Move Further Into the Digital Age

“But why do they put the warranty on the box?” Undeniably, Tommy Boy had a “good” salesman’s answer to this question. Legally and historically, however, the reason manufacturers print their warranties on the box has been to comply with the long-standing rules under the Magnuson-Moss Warranty Act, the Federal law that regulates warranties on consumer products. Now, the E-Warranty Act of 2015 has changed the game.

On September 24, 2015, President Obama signed the E-Warranty Act of 2015 (“Act”) amending the Magnuson-Moss Warranty Act and the rules governing warranties on consumer products. Under the Act, manufacturers have the right to provide warranty information on their website instead of in printed form, which is good news for companies looking to move towards paperless business in an effort to eliminate the substantial cost and environmental waste associated with print.

Under the Act, manufacturers who want to provide warranty information online must do the following:

  • Make warranty terms accessible on the manufacturer’s website in a “clear and conspicuous” manner; and
  • Print on either the product, product packaging, or in the product manual:
    • the full website address where the warranty can be obtained; and
    • a “reasonable non-internet based means” of contacting the manufacturer to obtain and review warranty terms (e.g. phone number or mailing address)
Furthermore, the Act does not eliminate any requirements mandating that warranty terms be made available to prospective consumers prior to sale in applicable transactions. Traditionally, retailers would maintain an instore file with written manufacturers’ warranties (when such was not provided on the outer packaging). Under the Act, manufacturers can meet the prior to sale requirement by ensuring their retailers provide onsite internet access to warranties via a tablet, computer, or other electronic device.

 

Although your company may be eager to jump into the digital warranty age, the Federal Trade Commission (“FTC”) now has one year to revise the warranty rules under the Magnusson-Moss Warranty Act to align with the new rules under the E-Warranty Act. Therefore, it may be wise to delay implementing online warranties until the FTC publishes its revisions, as it is likely that they will further define online warranty rules, and/or impose additional requirements, that will govern the manner in which manufacturers can provide online warranties.

 

This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance.

 

If you need assistance with a related matter, contact us.

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