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E-Warranty Act Changes Landscape for Consumer Product Warranties

Consumer Product manufacturers that offer warranties should take note of new options available to them under the E-Warranty Act of 2015 (S. 1359, 114th Cong. § 3 (2015)), signed into law by President Obama on September 24, 2015.  The new law amends the Magnuson-Moss Warranty Act of 1975 to allow manufacturers to make their warranties available online rather than on a single printed document on or within the packaging of products.

The E-Warranty Act now permits manufacturers to avoid the requirement of including the warranty terms and conditions on or inside the packaging by directing consumers to their websites to find those terms and conditions.  Product manufacturers who elect to post warranty information online will be required to include the URL where consumers can find warranty terms on the product itself, on the product’s packaging or in the product manual. Manufacturers also will be required to include a phone number, mailing address or other non-web based method of obtaining warranty terms. The law also requires that the manufacturer’s website include warranty terms in a clear and conspicuous manner.

Manufacturers should be mindful that, except for the warranty disclosure rules, other requirements of the Magnuson-Moss Warranty Act remain unchanged. These include, for example, the requirement that manufacturers title their warranties as either full or limited warranties, the requirements regarding what content must be contained in a written warranty and the prohibitions of tie-in sales requirements and disclaimers of implied warranties.

The Federal Trade Commission (FTC) has one year from final enactment of the law to revise its current warranty regulations in accordance with the E-Warranty Act.  Manufacturers should monitor this rulemaking process, as it may provide guidance on issues such as how prominent the warranty terms must be on manufactures’ websites, where the URL must be printed on the packaging and how manufacturers will be permitted to satisfy the point-of-sale disclosure requirement for on-line sales.

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