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United States federal law governing warranties on consumer products

The Magnuson–Moss Warranty Act (P. L. 93 637) is a United States federal law ( et seq.). Enacted in 1975, the federal statute governs warranties on consumer products. The law does not require any product to have a warranty (it may be sold "as is"), but if it does have a warranty, the warranty must comply with this law. The law was created to fix problems as a result of manufacturers using disclaimers on warranties in an unfair or misleading manner.

According to the report from the House of Representatives which accompanied the law (House Report No. 93 1197, 93d Cong 2d Sess. ), the Magnuson Moss act was enacted by Congress in response to merchants' widespread misuse of express warranties and disclaimers. The legislative history indicates that the purpose of the act is to make warranties on consumer products more readily understood and enforceable and to provide the Federal Trade Commission with means to better protect consumers. The act was sponsored by Senator Warren G. Magnuson of Washington and U. S. Representative John E. Moss of California, both Democrats, as well as Senator Frank Moss of Utah, who co sponsored it with Magnuson. The statute is remedial and is intended to protect consumers from deceptive warranty practices. Consumer products are not required to have warranties, but if one is given, it must comply with the Magnuson Moss Act.

Any warrantor warranting a consumer product to a consumer by means of a written warranty must disclose, fully and conspicuously, in simple and readily understood language, the terms and conditions of the warranty to the extent required by rules of the Federal Trade Commission. The FTC has enacted regulations governing the disclosure of written consumer product warranty terms and conditions on consumer products actually costing the consumer more than $15. The Rules can be found at 16 C. F. R. Part 701. Under the terms of the Act, ambiguous statements in a warranty are construed against the drafter of the warranty. Likewise, service contracts must fully, clearly, and conspicuously disclose their terms and conditions in simple and readily understood language. Warrantors cannot require that only branded parts be used with the product in order to retain the warranty. This is commonly referred to as the "tie in sales" provisions and is frequently mentioned in the context of third party computer parts, such as memory and hard drives.

The Magnuson–Moss Warranty Act does not invalidate or restrict any right or remedy of any consumer under any other federal law, nor does the act supersede the Federal Trade Commission Act as it pertains to antitrust actions. The act does not invalidate or restrict any right or remedy of any consumer under state law. The act is not the dominant regulation of consumer product warranties, and while it prescribes certain disclosures and restricts certain limitations on warranties, it leaves other warranty law untouched. Although the act covers warranties on repair or replacement parts in consumer products, warranties on services for repairs are not covered. The federal minimum standards for full warranties are waived if the warrantor can show that the problem associated with a warranted consumer product was caused by damage while in the possession of the consumer, or by unreasonable use, including a failure to provide reasonable and necessary maintenance.

The act is meant to provide consumers with access to reasonable and effective remedies where there is a breach of warranty on a consumer product. The act provides for informal dispute settlement procedures and for actions brought by the government and by private parties. The FTC has been mandated by Congress to promulgate rules to encourage the use of alternative dispute resolution, and full warranties may require mediation and/or arbitration as a first step toward settling disputes. According to the United States Court of Appeals for the Ninth Circuit, though, in the 2011 case Kolev v. Porsche Cars North America, pre dispute mandatory arbitration agreements are banned under Magnuson Moss, citing the MMWA's enactment after the Federal Arbitration Act and the FTC's actions against pre dispute arbitration agreements. However, the Ninth Circuit withdrew that decision on April 11, 2012, stating, its 2011 decision "may not be cited as precedent by or to this court or any district court of the Ninth Circuit." See Kolev v. Euromotors W./The Auto Gallery, 676 F.3d 867 (9th Cir. 2012). In addition, the federal government has the authority to take injunctive action against a supplier or warrantor who fails to meet the requirements of the act. Finally, consumers may seek redress in the courts for alleged violations of the Magnuson–Moss Act. A consumer who has been injured by a supplier's noncompliance may bring an action in federal court if the amount in controversy is over $50,000 or a class action if the number of class plaintiffs is greater than 100. If the jurisdictional amount, or number of plaintiffs, does not meet these thresholds, an action under the act may be brought only in state court. Moreover, one of the key aids to the effectiveness of the act is that a prevailing plaintiff may recover reasonable costs of suit, including attorney fees.

Recent developments have enhanced the applicability and relevance of the Magnuson–Moss Warranty Act, ensuring its effectiveness in the modern consumer landscape. In 2018, the Federal Trade Commission (FTC) conducted public workshops to solicit insights on contemporary warranty issues and potential improvements to the Act. Recommendations emerging from these workshops included the proposal to mandate warrantors to notify consumers about the transferability of warranties to secondary owners. This proposed enhancement aimed to enhance transparency and consumer awareness. Furthermore, the FTC clarified that Internet connected smart home devices are subject to the provisions of the Magnuson–Moss Act. This clarification ensures that consumers retain the right to repair these devices independently or through third party repair services without voiding their warranties. The clarification of this aspect has provided significant support to the "right to repair" movement, which advocates for consumer device repair rights, with the Magnuson–Moss Act serving as a key legal foundation. The FTC's commitment to adapting its enforcement of the Magnuson–Moss Act continues to address emerging challenges posed by new technologies and questionable practices employed by certain manufacturers. These developments underscore the adaptability and enduring relevance of the Magnuson–Moss Act in safeguarding consumer interests in evolving consumer purchasing environments.