It can be easy to get into problems if your warranty is not in compliance with federal law — even if you are fulfilling customer claims.

Generally, there are two types of warranty. “Implied” warranties —based on state law — are unwritten promises that say consumers are entitled to get what they have paid for.

“Express” warranties, however, are promises actually stated to the consumer. They could be written, for example, in a contract or in an advertisement, or they could be oral, such as a sales representative's statement to a buyer about how a window will not leak for 10 years.

The Magnuson-Moss Warranty Act is the federal law governing written warranties on consumer products and is overseen by the Federal Trade Commission. The act only applies to warranties on goods, and it only applies to consumer sales.

If you give your customers a written warranty, make sure you comply with the act.

  • Make a copy of the warranty available to your customers before they make a purchase.
  • The warranty coverage should be described in a single, easy-to-understand document. Explain what is and is not covered by the warranty, how long it lasts, and how a claim is made.
  • The warranty must be titled “full” or “limited.” A “full warranty” must meet five tests: it must be freely transferable to later owners of the purchased goods; service calls must be made without any charge to the consumer; if the contractor cannot repair the problem, consumers can choose to get their money back or obtain a complete replacement of the damaged part; to make a claim, the consumer merely has to notify the contractor of the problem and request warranty coverage; and the full warranty must not limit any implied warranties the consumer may also be entitled to under state law.

    • If the warranty is not “full,” then by default it must be labeled “limited.” Of course, you can always consider having some parts of a product under a full warranty (such as glass) and others under a limited warranty (such as a window screen). —D.S. Berenson is the Washington, D.C., managing partner of Johanson Berenson LLP (www.homeimprovementlaw.com), a national law firm specializing in the representation of contractors and the home improvement industry; 703.759.1055 or [email protected]. This article is for informational purposes only and should not be construed as legal advice.