Contrary to popular belief, a warranty is NOT a guarantee that a product is in perfect condition. Rather, a warranty is a promise that if a product becomes defective, the merchant will fix it in accordance with his or her obligations under the warranty. In other words, a warranty is not breached just because a product is defective, a warranty is breached because the seller failed to remedy the defect.

Types of Warranties

There are primarily three types warranties that a seller can give on a product: (1) a full warranty, (2) a limited warranty, and (3) an extended warranty (also known as a “service contract”). There are also express and implied warranties which may apply as well; however these warranties are provided by law, not by the seller. Keep in mind that no seller is “required” to give a warranty on a product. It’s true however that many consumers won’t consider purchasing a product unless it has a warranty.

A full warranty is a warranty which meets the minimum warranty standards established by federal law. A merchant who offers a full warranty is confident about its product’s quality and is willing to “go the extra mile” in standing behind it.

By contrast, a limited warranty is essentially any warranty which is NOT a full warranty. Limited warranties are not bad warranties, they just usually come packed with conditions and restrictions which would not exist under a full warranty. By law, warranties must be designated as “full” or “limited” so consumers know what they are getting. If a merchant fails to make any designation at all, the law assumes the warranty is “full.” As a result, sellers who put restrictions on undesignated warranties often do so in violation of federal law, usually without even knowing it.

An extended warranty (or service contract) is not really a warranty at all. This is because a true warranty comes with the product and requires no additional payment. A service contract on the other hand is purchased separately from the item it is designed to cover. Also, a service contract will never be subject to the federal minimum standards that mark the characteristics of a full warranty. Thus, apart from paying a separate price, there is almost no distinction between a service contract and a limited warranty.

The Importance of Warranties

As stated above, the mere fact you have a warranty does not guarantee the performance of your product. Consumer warranty claims most often arise, NOT because a product fails to conform to the warranty, but because a merchant, after several attempts, fails to “cure” the defect. Warranty claims are particularly advantageous to consumers because they are governed by federal law, which permits the recovery of attorney’s fees to the successful consumer. By contrast, most state law warranty claims do not permit the recovery of attorney’s fees, which often means going with representation since the cost of an attorney will usually exceed the value of your claim. As long as there is some warranty, even a bad one, you will almost always be better off than with no warranty at all.