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Warranty - Business Law Related Questions

Do you need to know what the main objective of a warranty is? Or, what happens to unexpired warranties if a business closes its operations? A warranty is an important term in the business of buying and selling. In a basic sense, a person selling a product or completing a service provides an implied assurance to make and deliver goods as promised to the buyer. A buyer has the right to claim the warranty in case of any issues. To know more about warranties and its rules, verified Experts can be of help.

Read below where Experts have answered a few questions regarding the warranty law.

What is the main objective of a warranty?

The main objective of a warranty is to repair or replace a product if it were not working properly or faces issues within the stipulated warranty time provided for the product. This basically implies that the consumer should be put into the same position as they were when the unit was purchased or returned/refunded the money spent. If the company is willing to repay the purchase price, the consumer does not face any loss because they are in possession of the money spent on the item.

Is it a breach of warranty if a company is not willing to repair an AC unit during the warranty period and instead are willing to refund its cost?

Case Details: The company states that they do not repair AC’s below 12,000 BTUs though there is no language stating so in the warranty terms.

As per the Magnuson Moss Warranty Act, the manufacturer has the right to repair, replace or refund the purchase price for any defective item or product sold. Since in this case, the manufacturer is willing to refund the purchase price of the unit, they are not in violation of the federal warranty law or the Magnuson Moss Warranty Act. The key behind this is that the customer should be made ‘whole’ again and this can be achieved on refunding the money paid for the AC unit. Usually, manufacturers opt for reimbursement because some repairs could cost more than the entire unit itself. If as a customer one refuses and opt to sue, the company can prove that they were willing to refund the money and this can in turn make the court rule that the customer is liable for attorney’s fees for unnecessarily taking the matter into court.

What rights does a customer have if a product’s engine is not covered under warranty?

Case Details: The main problem lies with the engine being defective in design or manufacture.

In such a situation, what should be highlighted to the company is that the part (engine) is covered under ‘implied warranty.’ This means when a person purchases a product they assume the implied warranty that the parts are fit for the particular work they are meant for. Even if it is not specifically covered under the warranty of the product, implied warranty is applicable as you are not able to utilize it for the need that it was purchased for. This part can be claimed as defective from manufacture so long as the product has been utilized as per instructions and within its regular scope of duty. If the company refuses to provide a new part, the corporate office or state’s Attorney General’s office can be contacted to file a grievance with their consumer protection division. There is also an option to file a suit directly by claiming a products liability concern.

Will a business be responsible for unexpired warranties if they have officially closed operations of the business?

If a business closes operations, those customers who have a warranty from that business can no longer enforce warranty claims against the firm. This is the case, if the business winds up operations properly by completing the formalities required by the state and dissolves or ceases to exist. It entails that if the business was an S-Corp, LLC or C-Corp, a dissolution should be filed with the secretary of state, along with submission of proof of taxes paid and an affidavit that all creditors are paid. Once the secretary issues the articles of dissolution, the business is officially closed. This can be done by the company itself or the secretary of state's office would have the forms for dissolution. In case of an S-Corporation the owner would not be personally liable as long as they have properly wound up the business and closed it. The customers holding these warranties would not have anyone to pursue for the claims and it would essentially become redundant.

Can a painter offering a 2-year warranty on a house come back to claim the amount owed if the job carried out was dissatisfactory?

Case Details: Wrong materials were used resulting in a poor job. The amount due was not paid to the painter since he has not returned to complete the job.

Essentially, the painter has breached the agreement by using the wrong materials for the job and therefore, is required to honor the warranty he has provided for the job. Though he can return and claim he was not paid, the home owner can assert his/her defense and sue or counterclaim for damages of having to rectify or repair the poor original, paint job carried out. Prior to doing so, it would be better to review the warranty and ensure the process of making a claim in writing is complied with.

The above article is very useful in providing important information about warranties and the laws which govern them. This can instill the confidence in you to ask your particular questions regarding warranties. Contact legal Experts online for customized answers, quickly and affordably. 

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