Warranty

In business law, a warranty is a promise that something sold is in good condition. A warranty may be express or implied. A breach of warranty occurs when the promise is broken, i.e., a product is defective or not as should be expected by a reasonable buyer. A warranty deed is a promise that the buyer's title to a parcel of land will be defended.

Breach of warranty

A warranty is violated when the promise is broken. When goods are not as should be expected, at the time the sale occurs, whether or not the defect is apparent. The seller should honor the warranty by making a refund, repair, or replacement. The sale starts the time under the statute of limitations for starting a court complaint for breach of warranty if the seller refuses to honor the warranty. This period is often overlooked where there is an "extended warranty" in which a seller or manufacturer contracts to provide the additional service of replacing or repairing goods that fail within the extended period. However, if the goods were defective at the time of sale, and the relevant statute of limitations has not expired, then existence or duration of any "extended warranty" is secondary: there was a breach of a primary warranty for which the seller may be liable. It could be an unfair and deceptive business practice (a statutory type of fraud) to attempt to avoid liability for breach of a primary warranty by claiming expiration of the irrelevant extended warranty.

Related Topics:
Statute of limitations - Unfair and deceptive business practice - Fraud

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For example, a consumer buys an item that was discovered to be broken or missing pieces before it was even taken out of the package. This is a defective product and can be returned to the seller for refund or replacement, regardless of what the seller's "returns policy" might state (with limited exceptions for second-hand or "as is" sales), even if the problem wasn't discovered until after the "extended warranty" expired. Similarly, if the product fails prematurely, it may have been defective when it was sold and could then be returned for a refund or replacement. If the seller dishonors the warranty, then a contract claim can be started in court.

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:See also product liability where liability for a defect causing a personal injury may go well beyond a warranty period, based upon negligent design or manufacture, or even strict liability.

Related Topics:
Product liability - Strict liability

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