[Code of Federal Regulations]
[Title 16, Volume 1]
[Revised as of January 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 16CFR700.10]

[Page 530-531]
 
                     TITLE 16--COMMERCIAL PRACTICES
 
                   CHAPTER I--FEDERAL TRADE COMMISSION
 
PART 700--INTERPRETATIONS OF MAGNUSON-MOSS WARRANTY ACT--Table of Contents
 
Sec. 700.10  Section 102(c).

    (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

[[Page 531]]

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.