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The United States Magnuson-Moss Warranty Act (MMWA) mandates that, among other things, manufacturers and sellers of consumer products provide consumers with detailed warranty coverage information. Often, original equipment manufacturers (OEMs) and automotive dealers must comply with the MMWA. The MMWA broadly defines “written warranties” as (1) “any written affirmation of fact or written promise made” by a supplier to a buyer relating to the sale of a consumer product and the product’s material or workmanship and “affirms or promises that such material or workmanship is defect free or will meet a specified level of performance over a specified period of time” or (2) “any undertaking in writing in connection with the sale” by a supplier of a consumer product to refund, repair, replace, or take other remedial action with respect to such product in the event that such product fails to meet the specifications set forth in the undertaking, which “becomes part of the basis of the bargain.”
United States courts have held the MMWA definitions can extend even to written advertisements; this may expose dealers and OEMs to significant risk of litigation. The increasing frequency of consumers prioritizing technology in automotive purchases has led to an emphasis on “infotainment” systems. An estimated 30 percent of car buyers listed entertainment systems as very important to their purchasing decision. As a result, consumers are more likely to rely on the statements about the “infotainment” systems by dealers and OEMs which requires that they excercize caution around advertising. Advertising can be construed as a written warranty, and some U.S. court cases have already begun to blur the line. Great specificity could result in an unintended “written warranty” under your jurisdiction’s law.
In order to mitigate exposure to the possible risks associated with advertising perhaps being construed as a warranty, you should consider the following:
- Proceed with caution. Always consider the consequences of your actions, or the tried and true platitude: “Think before you speak.”
- Keep statements general in scope.
- Be open about your limitations (even if it’s in fine print).
Ally Law member firms have attorneys experienced in contract, warranty, advertising and marketing law and regulations. Meet with your Ally Law member firm to ascertain the state of the law in your country, state, or province, and avoid pitfalls that could lead to expensive litigation. For more information about Ally Law member firm services and outstanding lawyers, contact us at team@ally-law.com.
Click here for the original article by Ally Law member Varnum LLP.
