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No aftermarket part or accessory that is properly installed on your vehicle will entirely void your original vehicle manufacturers warranty. According to the provisions in the Magnuson-Moss Warranty - Federal Trade Commission Improvement Act, It is the dealership's responsibility to prove that your modification directly caused or affected the failure you are trying to resolve. With that said, some dealerships are more performance-oriented than others and are more willing to work with customers.
Warranty-related materials, published by the new vehicle manufacturers, state that the installation of aftermarket parts have no effect on the warranty unless such equipment causes the problem that leads to the warranty claim. Nonetheless, some dealers have improperly denied warranty claims even though the claim had nothing to do with aftermarket parts. I.E., just because you install an exhaust system, your suspension failure warranty claim cannot be denied. If you experience a problem with an uncooperative dealership, point out the provisions of the this "FEDERAL ACT". For more information call your vehicle manufacturer or click on the link above to go directly to the Federal Trade Commission's website to find out more about this law.
Is there even more information available to me?
Yes, SEMA, the Specialty Equipment Market Association, has extensive information about this issue. Check out their information in the following categories:
(1) Warranty Denied?
(2) Unfair Warranty Denial?
SEMA also keeps track of illegal / unethical practices by dealers regarding this area. If you should have to go to court or to arbitration to settle your warranty complaint, contact SEMA with the details.
What else can I do?
In large cities, there are always other dealers you can do business with. It's a good idea to find out about the most cooperative performance-oriented dealer available to you by checking with clubs, local groups, etc.
If you live in smaller communities, make sure that an uncooperative dealer knows that they are giving you plenty of reason to take you business elsewhere.
If you should have to do that, write the "manufacturer" to tell them that their dealer's activities have caused you to buy from another car company!
Authority: Magnuson-Moss Warranty Act, Pub. L. 93–637, 15 U.S.C. 2301.
Source: 42 FR 36114, July 13, 1977, unless otherwise noted.
§ 700.1 Products covered.
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(a) The Act applies to written warranties on tangible personal property which is normally used for personal, family, or household purposes. This definition includes property which is intended to be attached to or installed in any real property without regard to whether it is so attached or installed. This means that a product is a “consumer product” if the use of that type of product is not uncommon. The percentage of sales or the use to which a product is put by any individual buyer is not determinative. For example, products such as automobiles and typewriters which are used for both personal and commercial purposes come within the definition of consumer product. Where it is unclear whether a particular product is covered under the definition of consumer product, any ambiguity will be resolved in favor of coverage.
(b) Agricultural products such as farm machinery, structures and implements used in the business or occupation of farming are not covered by the Act where their personal, family, or household use is uncommon. However, those agricultural products normally used for personal or household gardening (for example, to produce goods for personal consumption, and not for resale) are consumer products under the Act.
(c) The definition of “Consumer product” limits the applicability of the Act to personal property, “including any such property intended to be attached to or installed in any real property without regard to whether it is so attached or installed.” This provision brings under the Act separate items of equipment attached to real property, such as air conditioners, furnaces, and water heaters.
(d) The coverage of separate items of equipment attached to real property includes, but is not limited to, appliances and other thermal, mechanical, and electrical equipment. (It does not extend to the wiring, plumbing, ducts, and other items which are integral component parts of the structure.) State law would classify many such products as fixtures to, and therefore a part of, realty. The statutory definition is designed to bring such products under the Act regardless of whether they may be considered fixtures under state law.
(e) The coverage of building materials which are not separate items of equipment is based on the nature of the purchase transaction. An analysis of the transaction will determine whether the goods are real or personal property. The numerous products which go into the construction of a consumer dwelling are all consumer products when sold “over the counter,” as by hardware and building supply retailers. This is also true where a consumer contracts for the purchase of such materials in connection with the improvement, repair, or modification of a home (for example, paneling, dropped ceilings, siding, roofing, storm windows, remodeling). However, where such products are at the time of sale integrated into the structure of a dwelling they are not consumer products as they cannot be practically distinguished from realty. Thus, for example, the beams, wallboard, wiring, plumbing, windows, roofing, and other structural components of a dwelling are not consumer products when they are sold as part of real estate covered by a written warranty.
(f) In the case where a consumer contracts with a builder to construct a home, a substantial addition to a home, or other realty (such as a garage or an in-ground swimming pool) the building materials to be used are not consumer products. Although the materials are separately identifiable at the time the contract is made, it is the intention of the parties to contract for the construction of realty which will integrate the component materials. Of course, as noted above, any separate items of equipment to be attached to such realty are consumer products under the Act.
(g) Certain provisions of the Act apply only to products actually costing the consumer more than a specified amount. Section 103 applies to consumer products actually costing the consumer more than $10, excluding tax. The $10 minimum will be interpreted to include multiple-packaged items which may individually sell for less than $10, but which have been packaged in a manner that does not permit breaking the package to purchase an item or items at a price less than $10. Thus, a written warranty on a dozen items packaged and priced for sale at $12 must be designated, even though identical items may be offered in smaller quantities at under $10. This interpretation applies in the same manner to the minimum dollar limits in section 102 and rules promulgated under that section.
(h) Warranties on replacement parts and components used to repair consumer products are covered; warranties on services are not covered. Therefore, warranties which apply solely to a repairer's workmanship in performing repairs are not subject to the Act. Where a written agreement warrants both the parts provided to effect a repair and the workmanship in making that repair, the warranty must comply with the Act and the rules thereunder.
(i) The Act covers written warranties on consumer products “distributed in commerce” as that term is defined in section 101(3). Thus, by its terms the Act arguably applies to products exported to foreign jurisdictions. However, the public interest would not be served by the use of Commission resources to enforce the Act with respect to such products. Moreover, the legislative intent to apply the requirements of the Act to such products is not sufficiently clear to justify such an extraordinary result. The Commission does not contemplate the enforcement of the Act with respect to consumer products exported to foreign jurisdictions. Products exported for sale at military post exchanges remain subject to the same enforcement standards as products sold within the United States, its territories and possessions.
§ 700.2 Date of manufacture.
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Section 112 of the Act provides that the Act shall apply only to those consumer products manufactured after July 4, 1975. When a consumer purchases repair of a consumer product the date of manufacture of any replacement parts used is the measuring date for determining coverage under the Act. The date of manufacture of the consumer product being repaired is in this instance not relevant. Where a consumer purchases or obtains on an exchange basis a rebuilt consumer product, the date that the rebuilding process is completed determines the Act's applicability.
[42 FR 36114, July 13, 1977; 42 FR 38341, July 28, 1977]
§ 700.3 Written warranty.
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(a) The Act imposes specific duties and liabilities on suppliers who offer written warranties
on consumer products. Certain representations, such as energy efficiency ratings for electrical appliances, care labeling
of wearing apparel, and other product information disclosures may be express warranties under the Uniform Commercial Code.
However, these disclosures alone are not written warranties under this Act. Section 101(6) provides that a written affirmation
of fact or a written promise of a specified level of performance must relate to a specified period of time in order to be
considered a “written warranty.”,1
1 A “written warranty” is also created by a written affirmation of fact or a written promise that the product is defect free, or by a written undertaking of remedial action within the meaning of section 101(6)(B).
(b) Certain terms, or conditions, of sale of a consumer product may not be “written warranties” as that term is defined in section 101(6), and should not be offered or described in a manner that may deceive consumers as to their enforceability under the Act. For example, a seller of consumer products may give consumers an unconditional right to revoke acceptance of goods within a certain number of days after delivery without regard to defects or failure to meet a specified level of performance. Or a seller may permit consumers to return products for any reason for credit toward purchase of another item. Such terms of sale taken alone are not written warranties under the Act. Therefore, suppliers should avoid any characterization of such terms of sale as warranties. The use of such terms as “free trial period” and “trade-in credit policy” in this regard would be appropriate. Furthermore, such terms of sale should be stated separately from any written warranty. Of course, the offering and performance of such terms of sale remain subject to section 5 of the Federal Trade Commission Act, 15 U.S.C. 45.
(c) The Magnuson-Moss Warranty Act generally applies to written warranties covering consumer products. Many consumer products are covered by warranties which are neither intended for, nor enforceable by, consumers. A common example is a warranty given by a component supplier to a manufacturer of consumer products. (The manufacturer may, in turn, warrant these components to consumers.) The component supplier's warranty is generally given solely to the product manufacturer, and is neither intended to be conveyed to the consumer nor brought to the consumer's attention in connection with the sale. Such warranties are not subject to the Act, since a written warranty under section 101(6) of the Act must become “part of the basis of the bargain between a supplier and a buyer for purposes other than resale.” However, the Act applies to a component supplier's warranty in writing which is given to the consumer. An example is a supplier's written warranty to the consumer covering a refrigerator that is sold installed in a boat or recreational vehicle. The supplier of the refrigerator relies on the boat or vehicle assembler to convey the written agreement to the consumer. In this case, the supplier's written warranty is to a consumer, and is covered by the Act.
§ 700.4 Parties “actually making” a written warranty.
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Section 110(f) of the Act provides that only the supplier “actually making” a written warranty is liable for purposes of FTC and private enforcement of the Act. A supplier who does no more than distribute or sell a consumer product covered by a written warranty offered by another person or business and which identifies that person or business as the warrantor is not liable for failure of the written warranty to comply with the Act or rules thereunder. However, other actions and written and oral representations of such a supplier in connection with the offer or sale of a warranted product may obligate that supplier under the Act. If under State law the supplier is deemed to have “adopted” the written affirmation of fact, promise, or undertaking, the supplier is also obligated under the Act. Suppliers are advised to consult State law to determine those actions and representations which may make them co-warrantors, and therefore obligated under the warranty of the other person or business.
§ 700.5 Expressions of general policy.
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(a) Under section 103(b), statements or representations of general policy concerning customer satisfaction which are not subject to any specific limitation need not be designated as full or limited warranties, and are exempt from the requirements of sections 102, 103, and 104 of the Act and rules thereunder. However, such statements remain subject to the enforcement provisions of section 110 of the Act, and to section 5 of the Federal Trade Commission Act, 15 U.S.C. 45.
(b) The section 103(b) exemption applies only to general policies, not to those which are limited to specific consumer products manufactured or sold by the supplier offering such a policy. In addition, to qualify for an exemption under section 103(b) such policies may not be subject to any specific limitations. For example, policies which have an express limitation of duration or a limitation of the amount to be refunded are not exempted. This does not preclude the imposition of reasonable limitations based on the circumstances in each instance a consumer seeks to invoke such an agreement. For instance, a warrantor may refuse to honor such an expression of policy where a consumer has used a product for 10 years without previously expressing any dissatisfaction with the product. Such a refusal would not be a specific limitation under this provision.
§ 700.6 Designation of warranties.
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(a) Section 103 of the Act provides that written warranties on consumer products manufactured after July 4, 1975, and actually costing the consumer more than $10, excluding tax, must be designated either “Full (statement of duration) Warranty” or “Limited Warranty”. Warrantors may include a statement of duration in a limited warranty designation. The designation or designations should appear clearly and conspicuously as a caption, or prominent title, clearly separated from the text of the warranty. The full (statement of duration) warranty and limited warranty are the exclusive designations permitted under the Act, unless a specific exception is created by rule.
(b) Section 104(b)(4) states that “the duties under subsection (a) (of section 104) extend from the warrantor to each person who is a consumer with respect to the consumer product.” Section 101(3) defines a consumer as “a buyer (other than for purposes of resale) of any consumer product, any person to whom such product is transferred during the duration of an implied or written warranty (or service contract) applicable to the product. * * *.” Therefore, a full warranty may not expressly restrict the warranty rights of a transferee during its stated duration. However, where the duration of a full warranty is defined solely in terms of first purchaser ownership there can be no violation of section 104(b)(4), since the duration of the warranty expires, by definition, at the time of transfer. No rights of a subsequent transferee are cut off as there is no transfer of ownership “during the duration of (any) warranty.” Thus, these provisions do not preclude the offering of a full warranty with its duration determined exclusively by the period during which the first purchaser owns the product, or uses it in conjunction with another product. For example, an automotive battery or muffler warranty may be designated as “full warranty for as long as you own your car.” Because this type of warranty leads the consumer to believe that proof of purchase is not needed so long as he or she owns the product a duty to furnish documentary proof may not be reasonably imposed on the consumer under this type of warranty. The burden is on the warrantor to prove that a particular claimant under this type of warranty is not the original purchaser or owner of the product. Warrantors or their designated agents may, however, ask consumers to state or affirm that they are the first purchaser of the product.
§ 700.7 Use of warranty registration cards.
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(a) Under section 104(b)(1) of the Act a warrantor offering a full warranty may not impose on consumers any duty other than notification of a defect as a condition of securing remedy of the defect or malfunction, unless such additional duty can be demonstrated by the warrantor to be reasonable. Warrantors have in the past stipulated the return of a “warranty registration” or similar card. By “warranty registration card” the Commission means a card which must be returned by the consumer shortly after purchase of the product and which is stipulated or implied in the warranty to be a condition precedent to warranty coverage and performance.
(b) A requirement that the consumer return a warranty registration card or a similar notice as a condition of performance under a full warranty is an unreasonable duty. Thus, a provision such as, “This warranty is void unless the warranty registration card is returned to the warrantor” is not permissible in a full warranty, nor is it permissible to imply such a condition in a full warranty.
(c) This does not prohibit the use of such registration cards where a warrantor suggests use of the card as one possible means of proof of the date the product was purchased. For example, it is permissible to provide in a full warranty that a consumer may fill out and return a card to place on file proof of the date the product was purchased. Any such suggestion to the consumer must include notice that failure to return the card will not affect rights under the warranty, so long as the consumer can show in a reasonable manner the date the product was purchased. Nor does this interpretation prohibit a seller from obtaining from purchasers at the time of sale information requested by the warrantor.
§ 700.8 Warrantor's decision as final.
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A warrantor shall not indicate in any written warranty or service contract either directly or indirectly that the decision of the warrantor, service contractor, or any designated third party is final or binding in any dispute concerning the warranty or service contract. Nor shall a warrantor or service contractor state that it alone shall determine what is a defect under the agreement. Such statements are deceptive since section 110(d) of the Act gives state and federal courts jurisdiction over suits for breach of warranty and service contract.
§ 700.9 Duty to install under a full warranty.
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Under section 104(a)(1) of the Act, the remedy under a full warranty must be provided to the consumer without charge. If the warranted product has utility only when installed, a full warranty must provide such installation without charge regardless of whether or not the consumer originally paid for installation by the warrantor or his agent. However, this does not preclude the warrantor from imposing on the consumer a duty to remove, return, or reinstall where such duty can be demonstrated by the warrantor to meet the standard of reasonableness under section 104(b)(1).
§ 700.10 Section 102(c).
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(a) Section 102(c) prohibits tying arrangements that condition coverage under a written warranty on the consumer's use of an article or service identified by brand, trade, or corporate name unless that article or service is provided without charge to the consumer.
(b) Under a limited warranty that provides only for replacement of defective parts and no portion of labor charges, section 102(c) prohibits a condition that the consumer use only service (labor) identified by the warrantor to install the replacement parts. A warrantor or his designated representative may not provide parts under the warranty in a manner which impedes or precludes the choice by the consumer of the person or business to perform necessary labor to install such parts.
(c) No warrantor may condition the continued validity of a warranty on the use of only authorized repair service and/or authorized replacement parts for non-warranty service and maintenance. For example, provisions such as, “This warranty is void if service is performed by anyone other than an authorized ‘ABC’ dealer and all replacement parts must be genuine ‘ABC’ parts,” and the like, are prohibited where the service or parts are not covered by the warranty. These provisions violate the Act in two ways. First, they violate the section 102 (c) ban against tying arrangements. Second, such provisions are deceptive under section 110 of the Act, because a warrantor cannot, as a matter of law, avoid liability under a written warranty where a defect is unrelated to the use by a consumer of “unauthorized” articles or service. This does not preclude a warrantor from expressly excluding liability for defects or damage caused by such “unauthorized” articles or service; nor does it preclude the warrantor from denying liability where the warrantor can demonstrate that the defect or damage was so caused.
§ 700.11 Written warranty, service contract, and insurance distinguished for purposes of compliance under the Act.
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(a) The Act recognizes two types of agreements which may provide similar coverage of consumer products, the written warranty, and the service contract. In addition, other agreements may meet the statutory definitions of either “written warranty” or “service contract,” but are sold and regulated under state law as contracts of insurance. One example is the automobile breakdown insurance policies sold in many jurisdictions and regulated by the state as a form of casualty insurance. The McCarran-Ferguson Act, 15 U.S.C. 1011 et seq., precludes jurisdiction under federal law over “the business of insurance” to the extent an agreement is regulated by state law as insurance. Thus, such agreements are subject to the Magnuson-Moss Warranty Act only to the extent they are not regulated in a particular state as the business of insurance.
(b) “Written warranty” and “service contract” are defined in sections 101(6) and 101(8) of the Act, respectively. A written warranty must be “part of the basis of the bargain.” This means that it must be conveyed at the time of sale of the consumer product and the consumer must not give any consideration beyond the purchase price of the consumer product in order to benefit from the agreement. It is not a requirement of the Act that an agreement obligate a supplier of the consumer product to a written warranty, but merely that it be part of the basis of the bargain between a supplier and a consumer. This contemplates written warranties by third-party non-suppliers.
(c) A service contract under the Act must meet the definitions of section 101(8). An agreement which would meet the definition of written warranty in section 101(6) (A) or (B) but for its failure to satisfy the basis of the bargain test is a service contract. For example, an agreement which calls for some consideration in addition to the purchase price of the consumer product, or which is entered into at some date after the purchase of the consumer product to which it applies, is a service contract. An agreement which relates only to the performance of maintenance and/or inspection services and which is not an undertaking, promise, or affirmation with respect to a specified level of performance, or that the product is free of defects in materials or workmanship, is a service contract. An agreement to perform periodic cleaning and inspection of a product over a specified period of time, even when offered at the time of sale and without charge to the consumer, is an example of such a service contract.
§ 700.12 Effective date of 16 CFR parts 701 and 702.
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The Statement of Basis and Purpose of the final rules promulgated on December 31, 1975, provides that parts 701 and 702 of this chapter will become effective one year after the date of promulgation, December 31, 1976. The Commission intends this to mean that these rules apply only to written warranties on products manufactured after December 31, 1976.
According to the Report of the House of Representatives which accompanied the law (House Report No. 93-1197, 93d Cong 2d Sess.) the Magnuson-Moss act was enacted by Congress in response to the widespread misuse by merchants of express warranties and disclaimers. The legislative history indicates that the purpose of the Act is to make warranties on consumer products more readily understood and enforceable and to provide the Federal Trade Commission with means to better protect consumers (Davis v. Southern Energy Homes, Inc. 305 F.3d 1268 (11th Cir. 2002)).
The statute is remedial in nature and is intended to protect consumers from deceptive warranty practices. Consumer products are not required to have warranties, but if one is given, it must comply with the Magnuson-Moss Act.
[edit] Definitions used
The Magnuson-Moss Act contains many definitions:
- A "consumer" is a buyer of consumer goods for personal use. A buyer of consumer products for resale is not a consumer.
- A "supplier" is any person engaged in the business of making a consumer product directly or indirectly available to consumers.
- A "warrantor" is any supplier or other person who gives or offers a written warranty or who has some obligation under an implied warranty.
- A "consumer product" is generally any tangible personal property for sale and that is normally used for personal, family, or household purposes. It is important to note that the determination whether a good is a consumer product requires a factual finding, on a case-by-case basis. Najran Co. for General Contracting and Trading v. Fleetwood Enterprises, Inc., 659 F. Supp. 1081 (S.D. Ga. 1986).
- A "written warranty" (also called an express warranty) is any written promise made in connection with the sale of a consumer product by a supplier to a consumer that relates to the material and/or workmanship and that affirms that the product is defect-free or will meet a certain standard of performance over a specified time.
- An "implied warranty" is defined in state law. The Magnuson-Moss Act simply provides limitations on disclaimers and provides a remedy for their violation.
- Designations:
- A "full warranty" is one that meets the federal minimum standards for a warranty. Such warranties must be "conspicuously designated" as full warranties. If each of the following five statements is true about your warranty's terms and conditions,
it is a "full" warranty:
- You do not limit the duration of implied warranties.
- You provide warranty service to anyone who owns the product during the warranty period; that is, you do not limit coverage to first purchasers.
- You provide warranty service free of charge, including such costs as returning the product or removing and reinstalling the product when necessary.
- You provide, at the consumer's choice, either a replacement or a full refund if, after a reasonable number of tries, you are unable to repair the product.
- You do not require consumers to perform any duty as a precondition for receiving service, except notifying you that service is needed, unless you can demonstrate that the duty is reasonable.
- A "limited warranty" is one that does not meet the federal minimums. Such warranties must be "conspicuously designated" as limited warranties.
- A "full warranty" is one that meets the federal minimum standards for a warranty. Such warranties must be "conspicuously designated" as full warranties. If each of the following five statements is true about your warranty's terms and conditions,
it is a "full" warranty:
- A "multiple warranty",is part full and part limited.
- A "service contract" is different from a warranty because service contracts do not affirm the quality or workmanship of a consumer product. A service contract is a written instrument in which a supplier agrees to perform, over a fixed period of time or for a specified duration, services relating to the maintenance or repair, or both, of a consumer product. Agreements that meet the statutory definition of service contracts, but are sold and regulated under state law as contracts of insurance, do not come under the Act's provisions.
[edit] Requirements
The Act provides that any warrantor warranting a consumer product to a consumer by means of a written warranty must disclose, fully and conspicuously, in simple and readily understood language, the terms and conditions of the warranty to the extent required by rules of the Federal Trade Commission. The FTC has enacted regulations governing the disclosure of written consumer product warranty terms and conditions on consumer products actually costing the consumer more than $15. The Rules can be found at 16 C.F.R. Part 700.
Under the terms of the Act, ambiguous statements in a warranty are construed against the drafter of the warranty.
Likewise, service contracts must fully, clearly, and conspicuously disclose their terms and conditions in simple and readily understood language.
Warrantors cannot require that only branded parts be used with the product in order to retain the warranty.[1] This is commonly referred to as the "tie-in sales" provisions[2], and is frequently mentioned in the context of third-party computer parts, such as memory and hard drives.
[edit] Full Warranty Requirements
Under a full warranty, in the case of a defect, malfunction, or failure to conform with the written warranty, the warrantor:
- must, as a minimum, remedy the consumer product within a reasonable time and without charge;
- may not impose any limitation on the duration of any implied warranty on the product;
- may not exclude or limit consequential damages for a breach of any written or implied warranty on the product, unless the exclusion or limitation conspicuously appears on the face of the warranty; and
- if the product, or a component part, contains a defect or malfunction, must permit the consumer to elect either a refund or replacement without charge, after a reasonable number of repair attempts.
In addition, the warrantor may not impose any duty, other than notification, upon any consumer, as a condition of securing the repair of any consumer product that malfunctions, is defective, or does not conform to the written warranty. However, the warrantor may require consumers to return a defective item to its place of purchase for repair.
[edit] Limitations
The Magnuson-Moss Warranty Act does not invalidate or restrict any right or remedy of any consumer under any other federal law, nor does the Act supersede the Federal Trade Commission Act as it pertains to antitrust actions.
The Act does not invalidate or restrict any right or remedy of any consumer under state law. The Act is not the dominant regulation of consumer product warranties, and while it prescribes certain disclosures and restricts certain limitations on warranties, it leaves other warranty law untouched. Richardson v. Palm Harbor Homes, Inc., 254 F.3d 1321, 45 U.C.C. Rep. Serv. 2d 56 (11th Cir. 2001).
Although the Act covers warranties on repair or replacement parts in consumer products, warranties on services for repairs are not covered.
The federal minimum standards for full warranties are waived if the warrantor can show that the problem associated with a warranted consumer product was caused by damage while in the possession of the consumer, or by unreasonable use, including a failure to provide reasonable and necessary maintenance.
[edit] Remedies under the Act
The Act is meant to provide consumers with access to reasonable and effective remedies where there is a breach of warranty on a consumer product. The Act provides for informal dispute-settlement procedures and for actions brought by the government and by private parties.
The FTC has been mandated by Congress to promulgate rules to encourage the use of alternative dispute resolution, and full warranties may require mediation and/or arbitration as a first step toward settling disputes.
In addition, the federal government has the authority to take injunctive action against a supplier or warrantor who fails to meet the requirements of the act.
Finally, consumers may seek redress in the courts for alleged violations of the Magnuson-Moss Act. A consumer who has been injured by the noncompliance of a supplier may bring an action in state court if the amount in controversy is between $25 and $50,000, or a class action in state court if the number of class plaintiffs is less than 100. If the jurisdictional amount, or number of plaintiffs, exceed these limits, such an action may be brought in federal district court.[3] Moreover, one of the key aids to the effectiveness of the Act is that a prevailing plaintiff may recover reasonable costs of suit, including attorney fees.[4]
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