If you buy an item that comes with a written warranty and that item is defective, you can file a lawsuit against the "warrantor" (the person or company that made the warranty). But first, you need to “exhaust” your warranty remedies, which means that you must have tried, without success, to take advantage of your remedies, which might include getting a replacement, repair, or refund.
Also, under the federal law that governs consumer product warranties, called the "Magnuson-Moss Warranty Act," the person or company making the warranty can include a provision (a clause) that requires you to try to resolve the dispute informally, like through mediation, before you go to court.
And, after the statute of limitations expires, you can’t file a claim (a lawsuit) in court.
Where to Find Warranty Information for In-Store Sales, Online Sales, and Mail-Order Items
In most cases, merchants display warranties near the products that have them.
In-Store Sales
Sometimes, the merchant will post a sign that says you can look at the warranty if you ask for it. The merchant will then give you the warranty to read.
For example, an appliance store might post an oven warranty on the front of the item or place it inside the oven. If the product is small, such as a watch or cell phone, the merchant might keep the warranties behind the counter and post signs stating that the warranty is available for review. Either method is fine under the law.
Online Sales
To find warranty information for an online product, look for a hyperlink on the webpage that lists the item for sale. The hyperlink will usually take you to a separate site where you can read the complete terms and conditions of the warranty.
If you buy a product online, it’s a good idea to print out a copy of the warranty or save a copy to your computer when you buy the item and keep it for future reference.
Mail-Order Items
If you’re buying an item from a mail-order catalog, the catalog must include the actual warranty or a statement letting you know where to get a copy of the warranty. The warranty information is usually near the product description or, sometimes, on a separate page.
If the warranty is on a separate page, the catalog must give a page reference near the product description so you can easily find the warranty.
What Is Mediation?
"Mediation" involves a neutral third person (the "mediator") who meets with you and the party that made the warranty to help you reach a mutually acceptable resolution to the dispute. Using an informal dispute resolution process like mediation works best when the parties want another person to decide the outcome of their dispute but don’t want the formality, time, and cost of a trial.
Mediation is successful if both parties agree to a solution or settlement. The mediator doesn't have the power to impose a judgment.
If the parties can’t agree, they can escalate the dispute to court or use "arbitration." Arbitration is slightly less formal than going to court, but it’s more expensive than mediation, and importantly, the arbitrator might have the power to impose a resolution, even when one side opposes it.
Whether the disappointed loser can then take the case to court will depend on the wording of the arbitration clause in the warranty agreement and on any limitations imposed by law.
You Have to Comply With the Warranty Requirements
The warranty might require you to try to resolve the matter through a private company-based program or a neutral third party, like the Better Business Bureau (BBB), a private, nonprofit organization that helps settle disputes that involve products.
If the warranty requires an informal dispute settlement procedure, that process must comply with certain requirements. The Federal Trade Commission (FTC) “Rule on Informal Dispute Settlement Procedures” lays out these requirements. (When passing the Magnuson-Moss Warranty Act, Congress directed the FTC to create rules covering the requirements of the Act.)
Requirements Under the FTC Rule
Under the FTC Rule, the dispute settlement process must:
- be adequately funded and staffed
- not charge a fee
- have written procedures (and follow them)
- inform both parties when it receives notice about the dispute
- give each party a chance to present its case, submit supporting materials, and dispute points made by the other party (the process can be oral rather than written, but only if both parties agree)
- investigate, gather, and organize all information needed to resolve the dispute fairly and quickly
- settle the dispute independently, without influence from any of the parties involved
- make the decision and give supporting reasons to the parties within 40 days
- issue a non-binding decision (either party can file a lawsuit later if unhappy with the result), and
- keep a complete record of the dispute.
Where to Complain About a Company's Informal Dispute Resolution Process
If you have a complaint about a company’s informal dispute resolution process, you can file an online complaint at the FTC website. The FTC won’t work out your particular complaint, but it might use the information to help detect patterns of noncompliance with its requirements.
Also, the FTC offers tips for getting your money back if you’re disappointed with a product you bought.
Filing a Suit About a Warranty Issue
If you decide to file a lawsuit, you can handle the action yourself in small claims court. Or, if your warranty issue is complicated or a lot of money is involved, you might want to hire a lawyer to file the suit for you.
Most lawsuits under the Act go through state court because of strict federal jurisdictional requirements—you need to claim at least $50,000 in economic damages to get into federal court. However, cases involving larger amounts and multiple consumers sometimes go to federal court as class action suits.
In addition to federal law, each state has a commercial code, which includes similar laws regulating retail sales and warranty protections for consumers. Some states have enacted separate consumer protection and warranty laws that go beyond the Magnuson-Moss Act and these commercial codes.
How Long Do You Get to File a Suit for a Warranty Issue?
A "statute of limitations" restricts the amount of time you get to file a lawsuit. With a warranty, the statute of limitations generally begins to run when you purchase the item.
If the warranty explicitly extends to the future performance of the goods, the statute of limitations period usually starts when you discover, or should have discovered, the defect. After the statute of limitations passes, you can’t file a suit in court.
The Magnuson-Moss Warranty Act doesn’t have a specific statute of limitations. So, states apply their own time limits. In most cases, the court will use the Uniform Commercial Code (UCC) four-year limitation period. So, you usually have four years after you buy a product to discover a defective product that has a written warranty unless the warranty explicitly extends to the future performance of the item. Then, the statute of limitations period starts when you discover, or should have discovered, the defect.
While most states’ versions of the UCC give you four years to file a breach of warranty lawsuit, certain states have shorter statutes of limitations in these types of cases. Consider contacting a consumer protection lawyer who deals with warranties if you have questions about the statute of limitations in your state.
Talk to a Lawyer
If you’re thinking about filing a breach of warranty suit, consider contacting a consumer protection lawyer who deals with warranties to help you with the case.
