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BASIC CONSUMER LAW IN GEORGIA - WARRANTIES

This document tells you the following:

• What is a warranty?
• What is an implied warranty?
• What is a warranty of merchantability?
• What is a warranty of fitness?
• What is a warranty of title?
• How do you waive an implied warranty?
• What is an express warranty?
• What is the difference between a full warranty and a limited warranty?
• What to do if a warranty is broken?

CONSUMER LAW

Long before there was any law protecting consumers, the doctrine of caveat emptor ("let the buyer beware") prevailed. In other words, the best protection for a consumer is to be very careful:

• Be careful about the person or firm selling the goods or services.
• Be careful about the quality of goods or services.
• Be careful about the price and terms of payment.

In this century, the first major bill to protect consumers was called the Pure Food and Drug Act. Passed by Congress in 1906, it prohibited the mislabeling of the contents of food, liquor, and medicine containers. About this time, many states, including Georgia, also passed laws to protect the public against unwholesome food and harmful ingredients in drugs. Since then, numerous consumer-protection laws have been passed.

Why has there been an increase in consumer laws?

One reason is that we live in an age of mass production. Buyers and makers of goods usually don't know each other. When people bought shoes from the village cobbler, they could complain when the shoes were not well made. Now people buy shoes made in other states or countries. Getting satisfaction for poorly made shoes or other products can be almost impossible.

This disconnection between buyers and sellers means also that more and more goods travel through interstate commerce.

Regulating interstate commerce is one of the powers given by the Constitution to Congress. This power has enabled Congress to pass consumer-protection laws.

In the U.S. economy, most dealings between consumers and sellers or lenders are relatively free of government control.

Generally, laws regulating sellers or lenders are passed only when the practices of sellers have seemed deceptive, harsh, unfair, or misleading. Some fields of consumer law have required more regulation than others.

Regulating Product Quality (Warranties)

When you buy something at a store?be it a stereo cassette or a tennis racket?you expect that it will work. You also expect it to last for some period of time. What if it doesn't? What rights do you have as a buyer?

Warranties are a consumer's major safeguard of product quality. A warranty is the seller's legal promise or guarantee as to the quality of the goods. There are two kinds of warranties: implied (or statutory) and express (or contractual).

Implied (Statutory) Warranties

Implied (or statutory) warranties are imposed on products by law. Nearly every state in the United States has adopted a set of laws called the Uniform Commercial Code (UCC). Among these laws is a law providing that goods purchased from a merchant are assumed to have certain warranties. A merchant deals in goods of a particular kind. A large store like Wal-Mart is a merchant of many different kinds of goods. These warranties are said to be implied because they do not have to be formally stated by the merchant. However, implied warranties can be waived (or given up) by the consumer.

There are three implied, or statutory, warranties: (1) warranty of merchantability, (2) warranty of fitness, and (3) warranty of title.

1.  Warranty of merchantability. Merchantable goods are goods that are fit to be sold. The warranty of merchantability means that the goods are fit for the ordinary purpose for which such goods are sold. It can also mean they are as described on the package or label and that the goods are of fair or average quality. However, it is not a guarantee that the goods are of superior or outstanding quality. Does this warranty exist in the following situation?

SITUATION 9 Betty buys an electric fan. She takes it home, and it doesn't work. Clerks at the store refuse to take it back or exchange it. They say they never guaranteed the fan would work. There is no bill of sale beyond a cash register receipt.

Does the store have any obligation?

The warranty of merchantability exists whether or not the seller states it in words. In situation 9, there is no evidence that Betty waived any part of this warranty. Therefore, the store has a legal duty to sell her a fan that works. The result might be different if Betty found that the fan was not as quiet as she might have liked. In that case, the warranty might not apply.

2. Warranty of fitness.

SITUATION 10 Mr. Green needs something to kill a specific weed that is attacking his crop of beans. He asks the farm supply store owner what he would recommend. The store owner says he has just the thing. Mr. Green buys a large amount of the chemical recommended. It doesn't work.

Has the warranty been broken?

If the seller knows that the goods are to be used for a particular purpose, there is also an implied warranty that the goods are fit for that purpose. This assumption is particularly true if the buyer is relying on the judgment of the seller in selecting the goods. This warranty would apply in situation 10.

3. Warranty of title.

SITUATION 11 At Will's garage sale, Carol buys a handsome television set. When she takes it home, Ann, Will's cousin, appears at her door. Ann says that the television is hers and that Will had no right to sell it. She shows Carol her bill of sale. Carol calls Will. He admits the television was not his but refuses to return Carol's money.

What are Carol's legal rights?

The implied warranty of title means that a buyer has the right to assume, unless told otherwise, that a seller owns the property he or she is selling. It means the seller has the right to sell it. Buyers also can assume that they will be the sole owners of whatever they buy, unless told otherwise. In situation 11, Carol would have a legal right to the return of her money.

Waiving implied warranties.

SITUATION 12 Gerry decides to buy a used car from Tom. She looks it over carefully and test-drives it. The car seems okay to her. When she gives Tom the check, Tom gives her a bill of sale. It states that the car is sold "as is." Gerry signs the bill. A few days later, the transmission goes out on the car.

Can Gerry get any money back from Tom?

The implied warranties of merchantability and of fitness for a particular purpose may be waived by the buyer. Often, this waiver occurs when goods are accepted "as is," "in present condition," or words to that effect. To be effective, these types of phrases must be prominent and conspicuous.

Used cars are frequently sold "as is," which means that the seller does not warrant their condition. If they break down, the loss is the responsibility of the buyer. By signing a bill of sale that stated that the car was being sold as is, Gerry (in situation 12) gave up the implied warranties of merchantability and fitness. She therefore probably cannot recover her money from Tom.

SITUATION 13 Wanda buys a dress at a shop. A sign over the cash register reads "No Refunds or Exchanges." When she gets home, she notices a bad stain in the skirt. She had not seen it when she hastily tried on the dress.

Can she get her money back?

A store that does not give refunds or exchanges is, in effect, selling goods "as is." It is making its customers give up the warranties of merchantability and fitness. However, customers must know about the policy. To be valid, the policy may have to be in writing and conspicuous to the buyer. In situation 13, the store policy was clearly posted on signs. For these reasons, Wanda probably would not be able to get her money back.

Express (Contractual) Warranties

Express (or contractual) warranties are created by certain actions of the seller or manufacturer. You are probably most familiar with written warranties that accompany goods. These warranties usually make some guarantee about the material, workmanship, and performance of a product. They usually state what the manufacturer or seller will do if a product does not perform well.

Express warranties can also be created by the seller by:

1. Making a specific promise or affirming a fact. Suppose a saleswoman says the store will make any necessary repairs on a computer free of charge for a year. She is creating an express warranty.

2. A written description of the goods. If a mail order catalog describes a tent as waterproof, an express warranty is created.

3. Showing a sample or model to the buyer. In doing so, the seller is promising that the item actually sold to the buyer will be like the model shown prior to the sale. Suppose a shop owner demonstrates a color television, and you buy an identical model. You should expect it to perform the same way. The owner has created an express warranty.

An express warranty may also take the form of a bill of sale that a buyer must sign. However, the bill of sale may limit or disclaim the seller's responsibility for defects in the product. It may ask the buyer to give up implied or even express warranties. Be sure to read documents you are required to sign at the time of a purchase.

Warranties can be full or limited. A full warranty assures the buyer that the goods are totally free from defects at the time of the sale. It may include an obligation that the seller repair the goods within some time limit if they do not work properly.

SITUATION 14 Selina buys a sewing machine. With it is a written statement that the machine has a full warranty. The next week, the machine's motor breaks down. Selina takes it back to the store. The manager tells her the full warranty is only on the paint on the cabinet. He says that the warranty on the working parts is limited to labor only. She will have to pay $250 for a new motor, but labor will be free.

Can she sue? On what basis?

In the case of products that have more than one part, some parts may be under full warranty; other parts may be under limited warranty. A limited or partial warranty is, as the name implies, something less than a full warranty. Whether Selina can sue would depend on what the written statement actually says. Like other contracts, warranties should be read carefully. You should note that "full" warranties are the exception rather than the rule.

If a Warranty Is Broken

What can you do if a seller doesn't meet a warranty? If you have a complaint:

• Identify the problem.  Shoddy or broken merchandise?  False advertising?  Worthless guarantee?
• Decide what you want. Refund?  Payment for damages?  Repairs?  Replacement?
• Prepare your complaint.  Photocopy records of your purchase.  Keep original records yourself.  Make notes of talks about the problem with the company representatives.
• Present your complaint. First to the SALESPERSON who sold you the goods.  If that person does not help you, go to the MANAGER.  If the manager is uncooperative take the matter to the COMPANY PRESIDENT.  If the problem is with a national company, write a letter.  Include full information, such as what you bought (enclose copies of documents concerning the purchase), when and where you bought it, what the problem is, what you want done about it, and provide a time limit for action.  Keep a copy of your letter.
• Seek outside help. If you still get no satisfaction, explain your problem to a CONSUMER HELP agency.  LEGAL ACTION should be your last recourse.

An important law passed in 1975, the Magnuson-Moss Warranty Act, provides additional protection. The act requires that written warranties be clearly expressed so that consumers know what they are getting. It covers the different aspects of warranties such as materials, workmanship, performance, and actions that will be taken if a product does not work well. The act says that if a seller gives an express warranty, the consumer cannot lose any implied warranties.

Under the Magnuson-Moss Warranty Act, a seller who violates the terms of a warranty or service contract can be sued by a purchaser with a claim of more than $25.

* Excerpted from An Introduction to Law in Georgia, Fourth Edition, published by the Carl Vinson Institute of Government, 1998 (updated 2004).  The Vinson Institute is not responsible for errors in the online text.  Content is for information only; in no way should the information in the book be considered legal advice to anyone on any matter for which there are legal implications.  Any such matter should be specifically addressed with an attorney. The book is available for purchase at www.cviog.uga.edu or by contacting the Publications Program, Carl Vinson Institute of Government, University of Georgia, 201 M. Milledge Avenue, Athens, GA 30602; telephone 706-542-6377; fax 706-542-6239.