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Chapter 24- Warranties. Warranties . What is a warranty? What is the last thing you bought with a warranty? What is usually included in a warranty? Are they free? If not, what is usually a cost for them?. Warranties.
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Warranties • What is a warranty? • What is the last thing you bought with a warranty? • What is usually included in a warranty? • Are they free? If not, what is usually a cost for them?
Warranties • Warranty: a promise or guarantee made by seller about the quality or performance of goods for sale • When looking at a warranty you should consider… • How long does it last? • What parts are covered and excluded? • What do you get under the warranty?
Express Warranties • Express Warranty: a statement- written, oral, or by demonstration- about the quality or performance of a good that becomes part of the bargain between the parties • Ex: A salesperson tells you that the TV you are thinking about buying wont need any repairs for 5 years. • You purchase a vacuum after watching a demonstration of the vacuum. • http://www.youtube.com/watch?v=mESzmB1kisA
Magnuson-Moss Warranty Act • Requires that written warranties: • Disclose all essential terms and conditions • Be stated in simple, easy to read language • Be made available to the consumer before the sale
Magnuson-Moss Warranty Act • Warranties can be Full or Limited • Under a Full Warranty: • Defective products will be fixed or replaced at no cost • The consumer will not have to do anything unreasonable to get the warranty • The product will be fixed in a reasonable amount of time • If the product cannot be fixed, it will be replaced • The warranty applies to anyone who own the product during the warranty period.
Implied Warranties • Implied Warranty: an unwritten promise, created by law, that a product will do what it is supposed to do • 3 Types: warranty of merchantability, warranty of fitness for a particular purpose, warranty of title
Implied Warranties • Warranty of Merchantability: an unwritten promise that the item sold is of at least average quality for that type of item • Be careful of products labeled “as is” or “final sale” (means no warranty) • Ex: a radio should play, a freezer should keep things frozen
Warranty of Fitness for a Particular Purpose: when a consumer tells a seller before buying an item that it is needed for a specific purpose or will be used in a certain way • Ex: you tell the salesman you need a waterproof watch, the salesman recommends one with the understanding that you need it to be waterproof, and as soon as the customer goes swimming it leaks and stops working
Warranty of Title: a sellers promise that he or she owns the item for sale • Ex: Stolen goods do not have a warranty
Defective Products Remember…… • Strict Liability? • Who is responsible for protecting consumers from faulty products?
Disclaimers • Disclaimer: an attempt to limit the seller’s responsibilities should anything go wrong with a product • Must be easily seen by the consumer • Example: Open item at Best Buy
Warranty Example-Walmart • What defects does the warranty cover? • What is included in the Warranty Protection Program? • Are there any disclaimers? • How much does the 2 year service plan cost?
Is a warrant created in any of the following situations? What type and has it been broken? • Bannor sells Michellee his used car and it breaks. The repair of the car is greater than the cost. • Ashling sells Brooke a stolen diamond ring after telling her it was a gift from an ex boyfriend. • Reggie sells Alexis a camera by telling her it will last for 8 years. It breaks after 8 months
Micheyla buys a new sofa from the store. One of the legs falls off 2 weeks after delivery. • Makenzi orders a hardcover book from Borders for $12.95. When she receives it, it is paperback.
Page 283-A-C • 286 A-B
Closure-Identify 2 of 3 • Warranty of Merchantability • Warranty of Fitness for a Particular Purpose • Warranty of Title.
