[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: 16CFR700.3]

[Page 527-528]
 
                     TITLE 16--COMMERCIAL PRACTICES
 
                   CHAPTER I--FEDERAL TRADE COMMISSION
 
PART 700--INTERPRETATIONS OF MAGNUSON-MOSS WARRANTY ACT--Table of Contents
 
Sec. 700.3  Written warranty.

    (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

[[Page 528]]

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\ A product information disclosure 
without a specified time period to which the disclosure relates is 
therefore not a written warranty. In addition, section 111(d) exempts 
from the Act (except section 102(c)) any written warranty the making or 
content of which is required by federal law. The Commission encourages 
the disclosure of product information which is not deceptive and which 
may benefit consumers, and will not construe the Act to impede 
information disclosure in product advertising or labeling.
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    \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).
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    (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.