Hey everyone, made a mistake, I forgot there were some additional things that I wanted to cover this week on warranties.  So the discussion on disclaimers will follow next week. Anyway, let’s get to it.

Magnuson-Moss Act

The Magnuson-Moss Act is a federal law that covers written warranties in the situation of consumer goods (personal, household use items) that cost more than $10. It does NOT require you to produce a written warranty, it only requires certain things if you do decide to have one. It only applies to written and not oral warranties. Lastly, it does not apply to service warranties, unless you are providing the parts and workmanship in doing a repair, then it does.

The Basics

The Federal Trade Commission is responsible for administering this law. There are three basic requirements that you as a warrantor or seller must do in your written warranties:

  1. You must state whether the warranty is “full” or “limited” (to be explained later);
  2. As a warrantor, you must state specified information (listed later) about the warranty coverage and it must be in plain language (no legalese!);
  3. You must ensure that the warranty is available to read BEFORE purchase by the consumer.

 Full vs. Limited Warranties

A full warranty is a promise that the good will be repaired or replaced for free during a warranty period.  It functions like a Lemon Law. To have a full warranty you must do the following:

  • You do not limit the duration of implied warranties.
  • You provide warranty service to anyone who owns the product during the warranty period; that is, you do not limit coverage to first purchasers.
  • You provide warranty service free of charge, including such costs as returning the product or removing and reinstalling the product when necessary.
  • You provide, at the consumer’s choice, either a replacement or a full refund if, after a reasonable number of tries, you are unable to repair the product.
  • You do not require consumers to perform any duty as a precondition for receiving service, except notifying you that service is needed, unless you can demonstrate that the duty is reasonable.

Anything short of that, you will have a limited warranty.  Some retailers like to offer a full warranty of their own above what the manufacturer offers as a competitive edge.

A limited warranty is the one you see more often, and it is probably one that is favored by starting businesses, as it is less costly. As you would expect, it is limited in what it covers, which is usually only parts and rarely the cost of labor beyond the first month.  Some expensive items manufacturers may offer limited warranties for a longer period of time due to the relative cost of the item.

The Specified Information

In plain language you must state the following in your written warranty:

  1. Name and address of the company making the warranty;
  2. The product or parts covered;
  3. Whether the warranty promises to replace, repair, or refund, and any expenses that the consumer has to pay associated with those actions;
  4. The length of the warranty;
  5. If the warranty does not cover certain legal damages beyond the cost of the product;
  6. What the consumer has to do if something goes wrong;
  7. If the company requires that the consumer waive certain rights in dispute or go through arbitration, then a statement on that must be included;
  8. Finally, a brief description of the consumers’ legal rights.

There are a lot more issues with warranties, that would probably require a discussion with an attorney or a more in-depth analysis than one post would take. So that will be it for this week on warranties.

Come back next week where I will discuss disclaimers, and I am sure many of you already know the big one from buying things on Craigslist and Ebay. So see you then and also don’t forget to “Subscribe” to this blawg!

*Disclaimer:  This post discusses general legal issues, but does not constitute legal advice in any respect.  No reader should act or refrain from acting based on information contained herein without seeking the advice of counsel in the relevant jurisdiction.  Ryan K. Hew, Attorney At Law, LLLC expressly disclaims all liability in respect to any actions taken or not taken based on the contents of this post.

Last post was about creating a Social Media Policy with respect to the employer-employee relationship.  The idea is to minimize potential suits between the employee and employer.  Issues like prohibiting certain behaviors, such as posting negative comments or former employees taking company information should be the concern with an internal policy.

However, many businesses are coming to realize the potential power of blogs, Twitter, and Facebook and readily use social media as a marketing and advertising tool.  And why not?  It is free, relatively easy to set-up, and allows you a good amount of control over content.  However, just like internal disputes you can quickly wind up with external disputes with other companies, commenters, and the like over issues of intellectual property infringement and defamation.

Advertising Statements: Puffing Yourself Up and Tearing Down the Competition

FTC and Endorsements: Disclose Your Relationship

Generally, marketing, advertising, and public relations specialists are comfortable with using mere words of puffery.  They also know that it has been the law that if an ad features an endorser who’s a relative or employee of the marketer or if that endorse has been give something of value in exchange for praise of the marketer’s product or service the ad must disclose the connection.  The point is that knowing about the connection helps the reader or watcher evaluate the quality of the endorsement.

This attitude comes into play when using social media as well.  Specifically, the FTC has issued guidelines about how bloggers, and social media specialists talk about a company’s product or services.  This includes your employees, as well as any marketer, advertiser, or in generally someone speaking on your behalf and you give them something expecting endorsements.

Say you have a new delicious musubi (rice ball) that you want people in Honolulu to know about.  One of your employees is a well-known food blogger.  You give her a sample of the product with the intention that she is to eat it and then rave about it on her blog.  If she does not state that she is your an employee you would be violating the FTC guidelines.

Defamation: Don’t Start Ugly Rumors

On the flip side is going after the competition.  If you or your employees typically engage in discussions via Twitter, Facebook, or comments on your company’s blog you may sometimes start joking with one another.  It is easy to see that this leads to making fun of the competition’s products and services.  However, going too far may mean making false statements that damages their reputation.  In this situation, you may be slapped with a defamation suit.

The general better policy in a situation like this is to remind people to be positive in their postings rather than taking the low road.  Above all do not engage in the rumor mill thinking that the amount of information going out there will protect you.  Once something gets sent out onto the Internet it is almost impossible to take back.  Just look at some of our politicians and celebrities to realize the truth of that fact.

Intellectual Property: Using Other Works

Many people love to share images or quotes on their Facebook posts, Twitter feeds, or blogs.  Generally, they search the web for a cute image and slap it on their post and think they are done.  While, they think that is ok, what they are unaware is that they are infringing on the person who took or made that image’s intellectual property (IP) rights.  When it comes to business the stakes are higher because the owner believes you are using their working to make a profit.

Copyright and Trademark Infringement

In general, when using images and phrases the best policy is to create your own or license it out.  Do not take images and words from another’s website and slap it on your own trying to claim it as your own.  For a prime example of this you can look at my own blog.  Many of the images I use are stock photos,  if I were to go to another law firm’s website and start taking their images and pdf files and posting them here, and claiming them as my own those would be violations of the firm’s intellectual property rights.  While, there may be a  “fair use” exemption it is less likely you will get to use it for your money-making company blog, Twitter, or Facebook page.

Best policies are to create or license the images you want to use, be sure to use attribution links and short quotes from another site.  The last thing in the social mediaverse is you want to be known as a thief of people’s IP.  Always clear use of photos, music, works, etc . . . if you don’t know where they come from.

By the way, remember that people do have publicity rights this includes their image, likeness, and name much like a company controls their trademarks and copyrights, celebrities and people control their image.

Last Words

Next week, I will wrap-up this section with some general tips of crafting a policy and what to think about and some other miscellany.  In general, if you are concerned or feel that your company and employees need a re-training or updating on social media and the laws talk to an expert and have an attorney review and draft your policies.

Don’t forget if you enjoy this series or any of the other series on my blawg feel free to subscribe in the right-hand corner of this page to receive e-mail updates on posts.  If you are on Facebook be sure to “Like” “Ryan K. Hew” to get updates there as well.

See you next time!


*Disclaimer:  This post discusses general legal issues, but does not constitute legal advice in any respect.   No reader should act or refrain from acting based on information contained herein without seeking the advice of counsel in the relevant jurisdiction.   Ryan K. Hew, Attorney At Law, LLLC expressly disclaims all liability in respect to any actions taken or not taken based on the contents of this post.