Most of the students misunderstand the meaning and essence of insurance and warranties. While we are young and restless, we don’t see a point in paying for insurance or purchasing a warranty when buying a smart device or car. In this brief overview, we tried to answer some of the commonly met questions regarding this issue. Have you got the warranty for that brand new bike?
A warranty is one of the contract’s elements which refers to a guarantee that provides legal confidence by one party to another that certain circumstances will occur. According to the Federal Acquisition Regulation, any warranty should outline the rights of the Government and the contractor and foster quality performance. Which of the parties, the contractor or the Government, should receive more benefits from the warranty issue?
Two Types of Warranties
Two types of warranties are generally accepted by the Government. Those are express and implied warranties. The primary difference is that in case of implied warranty, it is provided to every potential customer while an express warranty is not set automatically. A customer has to purchase the good or service to be assigned to the express warranty. Any product comes with the already involved implied warranty (or merchantability). It is an obligation of any manufacturer to guarantee good’s quality, capacity, and expiration date.
As it is said in the Magnuson-Moss Warranty Act, the consumer’s rights are not limited by the state law. Express warranty may be received from the sale after signing the contract.
It is offered in the shape of a written content promising “All jackets are 100% leather” or “We will repair any damaged or defective parts caused by inappropriate workmanship”. While implied warranty stands for the impeccable product serving only when a consumer uses it appropriately, an express warranty assumes repairs due to the various reasons.
From my point of view, express warranties have more advantages for the contractor. Because the remedies of a consumer are not limited, he can insist on any sort of compensation as a repair, replacement, or refunding. This type of warranty does not allow manufacturers to produce goods of poor quality with impunity. A threat of legal responsibility makes only high-quality products enter the official market. To my mind, this type of warranty plays in hand of the customer.
From the other side, if a consumer does not agree to the terms set by the Government, he or she should not use a particular product or service. In some situations, a government should be allowed to use disclaimers as a means to avoid the implied warranty of the adequacy. It is important that every consumer understands what for a particular good is created and use it with corresponding intentions.
Who Is Responsible for the Damages?
According to 46.703 of FAR, in case of product’s damages, it’s up to the contractor to prove there was a potential harm to the health or wealth caused by the manufacturing defects, unexpected end use, complexity in usage (i.e., inadequate user’s manual). To win on a warranty issue, as stated in 46.706, the Government has to prove the defects were not caused by another party, specify the design of the end item and its measurements, demonstrate the duration of warranty is already over, point that the warranty clause is not consistent.
To conclude, both express and implied types of warranty are important to keep the contractor’s and the Government’s remedies and rights in balance.
Federal Acquisition Regulation, 46 C.F.R. § 46.7-1 (2005).
Magnuson-Moss Warranty Act, Pub. L. 93-637, 15 U.S.C. 2301 The Act (15 U.S.C.A. § 2301 et seq.)
Schaefer, David T. (1996). Attorney's Fees for Consumers in Warranty Actions –
An Expanding Role for the UCC? Indiana LawJournals, 61 (summer).