COR - Types of Warranties (Lesson)

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Types of Warranties

Introduction

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When you make a purchase do you expect the product you purchase to work and operate efficiently or to serve the purpose for which you bought it? Of course you do. At the same time the seller of goods generally wants to exhibit confidence in their products. Companies do this by offering a warranty guaranteeing that the condition of the product is a certain quality. In this microlesson we will take a brief look at the types of warranties.

Types of Warranties

Warranties for the purchases we make are covered under the law of warranties through the Uniform Commercial Code (UCC) – including, for example, household goods, purchases made at restaurants, new computer equipment, etc. The UCC generally applies to the sale of goods that involve a merchant. A warranty is another name for a guarantee. There are two main types of warranties: express and implied. Each are described below, as well as extended warranties:

Express Warranties

  • An oral or written statement, promise, or other representation about the quality, ability, or performance of a product
  • Applies to goods that are sold or leased
  • Express warranties are conveyed in three ways, including:
    • By a statement of fact or a promise made by the seller
    • By a description of the goods
    • By the use of a sample or model

Implied Warranties

- A guarantee of quality imposed by law

- An implied warranty is not in writing.

- Under the UCC, only applies to goods sold (does not cover services)

Below are types of implied warranties

  • Implied warranty of fitness for a particular purpose.
    • (Made when a seller selects goods for a particular purpose for the consumer.)
  • Implied warrant of merchantability
    • Requires that minimum standards of quality be met by the products (and their containers) or services
    • Products must be fit for the general purposes for which they are sold
    • The product must be what all labeling and seller statements say it is

Extended Warranties

A manufacturer, dealer, or a third party may offer extended warranties for such products as vehicles, household appliances, electronic systems, and much more.

Be cautious in buying extended warranties:

  • They are often unnecessary because they duplicate current warranty coverage.
  • If you wish to purchase a service contract you are allowed by law to do so up until 30 days from the regular warranty’s expiration date.
  • Stores that claim at “now or never” policy are being deceptive.

Let's Review!

Take a moment to participate in the following activity to practice your understanding of the topics in this module.  Reach out to your instructor if you have any questions.

Final Thoughts

As consumers, we should feel safe with the purchases we make for our daily needs as well as our wants. Warranties outlined by the Uniform Commercial Code (UCC) help to ensure the products we buy are good and fit for the purpose for which they were bought. There are two primary types of warranties – express warranties and implied warranties. An express warranty is one that is clearly stated (or “expressed”), either verbally or in writing. An implied warranty automatically covers most consumer goods valued over a certain amount but only provides a base level of protection for consumers.

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