The Magnusson-Moss Warranty Act, otherwise known as the Federal Lemon Law, is the federal law that protects consumers from buying consumer goods without a significant guarantee of quality and performance, such as a manufacturer warranty. The Magnusson-Moss Warranty Act was the government’s measure against the widespread abuse of manufacturer express warranties and disclaimers. It was introduced and passed by the Congress in 1975 by Sen. Warren G. Magnuson (Washington) and Sen. John E. Moss (California).
The main purposes behind the Magnusson-Moss Warranty Act include;
- The consumers should be fully informed about warranty terms and conditions before buying a particular consumer good, so that they know what to expect if anything goes wrong with the purchased product.
- The consumers should have the ability to compare different types of warranties and choose the product that satisfies them most in terms of features, price, quality and warranty coverage.
- The Magnusson-Moss Warranty Act was intented to encourage competition between manufacturers on the basis of warranty coverage. By assuring that consumers have complete information on warranty terms and conditions, the manufacturers are supposed to compete by offering different levels of warranty coverage to meet customer preferences.
- The Magnusson-Moss Warranty Act makes it easier for consumers to pursue their rights against manufacturers and receive a remedy for the breach of warranty. It strengthens existing incentives for manufacturers to perform their obligations in a timely and
thorough manner, as well as resolve any disputes with minimum costs to consumers. The Magnusson-Moss Warranty Act can seem a little bit complicated at first sight both from consumer’s and business person’s viewpoint. So in order to better understand the meaning and the framework of the Act, let’s see what the main requirements are and what is not required under the Federal Lemon Law.
Magnusson-Moss Warranty Act Requirements
Requirement I – The Disclosure Rule
According to this rule, the warranty must state specific terms and conditions, including the duration of said warranty and any exclusions, limitations and disclosure of actions that may void the warranty. The warrantor must provide all warranty information in a single, clear and easy-to read document.
Requirement II – The Pre-Sale Availability Rule
The warrantor or seller must make sure that the warranty document is available for review by consumers before purchase, thus making it a part of consideration. As a part of this rule, retailers must provide all manufacturer warranties, including extended warranties for service, at the point of sale. In case of online or mail orders the warranty information must anyway be made available for consumers’ review. These two requirements apply to all written warranties that cover consumer products costing more than $ 15.
Requirement III – The Dispute Resolution Rule
The Act encourages companies to establish easier, non-formal procedures of resolving warranty complaints in order to avoid legal proceedings, which are way more costly and time-consuming. For this reason companies put in action alternative dispute resolution mechanisms, which must meet the requirements stated in the FTC’s Rule on Informal Dispute Settlement Procedures. The Magnusson-Moss Warranty Act allows warrantors to include a special provision that requires customers to try resolving warranty disputes by the means of informal dispute resolation mechanisms before filing a lawsuit.
The Magnusson-Moss Warranty Act states that written warranties must be titled either “FULL” or “LIMITED”. The “Full” warranty in its turn does not limit the duration of implied warranty. This requirement applies to all written warranties of consumer products costing more than $ 10.
What the Magnusson-Moss Warranty Act Does Not Require
It is important to understand that the Magnusson-Moss Warranty Act does not require manufacturers to provide a written warranty. Every manufacturer can decide whether ot not to warrant their products in written form. However, if the manufacturer gives a written warranty it must comply with the Act.
This brings us to another statement, according to which only written warranties are covered by the Magnusson-Moss Warranty Act. It does not apply to any oral warranty. The Act does not apply to service warranties either. Only warranties for consumer products are covered by the Act.
And finally, the Magnusson-Moss Warranty Act doesn not cover warranties for commercial goods and service, it only applies to consumer goods used for personal, family, or household purposes.