Law Guarantee

QUESTION: How does a service contract work with a warranty?

ANSWER: A service contract is an optional agreement for product service that customers sometimes buy. It provides additional protection beyond what the warranty offers on the product. Service contracts are similar to warranties in that both concern service for a product. However, there are differences between warranties and service contracts.

Warranties come with a product and are included in the purchase price. In the language of the Magnuson-Moss Warranty Act, warranties are “part of the basis of the bargain.” Service contracts, on the other hand, are agreements that are separate from the contract or sale of the product. They are separate either because they are made some time after the sale of the product, or because they cost the customer a fee beyond the purchase price of the product.

If a manufacturer offers a service contract, the Act requires the manufacturer to conspicuously list all terms and conditions in simple and readily understood language. However, unlike warranties, service contracts are not required to be titled “full” or “limited,’ or to contain the special standard disclosures. In fact, using warranty disclosures in service contracts could confuse customers about whether the agreement is a warranty or a service contract.  

QUESTION: What is an express warranty?

ANSWER: Express warranties, unlike implied warranties, are not “read into” asales contract by state law. Instead, the manufacturer explicitly offers these warranties to the customers in the course of a sales transaction. They are promises and statements that are voluntarily made about the product or about the manufacturer’s commitment to remedy the defects and malfunctions that some customers may experience.
Express warranties can take a variety of forms, ranging from advertising claims to formal certificates. An express warranty can be made either orally or in writing. While oral warranties are important, only written warranties on consumer products are covered by the Magnuson-Moss Warranty Act.

Section 2-313 of the Uniform Commercial Code covers express warranties.