BLOG POST

Tech & Sourcing @ Morgan Lewis

TECHNOLOGY, OUTSOURCING, AND COMMERCIAL TRANSACTIONS
NEWS FOR LAWYERS AND SOURCING PROFESSIONALS

The US Congress almost unanimously passed the E-Warranty Act of 2015 (E-Warranty Act), which President Barack Obama recently signed into law. Under the E-Warranty Act, manufacturers and distributors can post product warranties online instead of providing hard-copy warranty information to consumers.

The E-Warranty Act amends section 102(b) of the Magnuson-Moss Warranty-Federal Trade Commission Improvements Act (Magnuson-Moss Act). Congress cited several benefits of the amendment, including expanded consumer access to pertinent information, reduced environmental impact, and greater manufacturer flexibility and competitiveness. The E-Warranty Act includes the following requirements:

  • The warranty terms must be in an accessible digital format on the website of the consumer product’s manufacturer in a clear and conspicuous manner.
  • Information about how to obtain and review warranty terms must be provided on the product, on its packaging, or in its manual.
  • Consumers, including prospective purchasers, must be given a reasonable non-Internet based means of contacting the manufacturer to obtain and review the warranty terms.
  • For applicable transactions where the product warranty terms must be made available to the consumer prior to sale, the seller must make the warranty terms available to the potential purchaser, through electronic or other means, at the location of the sale before the purchase.

The E-Warranty Act gives the Federal Trade Commission (FTC) one year to revise its Magnuson-Moss Act regulations regarding the availability of written warranties on consumer products, including the Pre-Sale Availability Rule, which requires the seller of a consumer product with a written warranty to make a text of the warranty readily available for examination by a prospective buyer prior to sale. Before changing distribution and sale procedures, manufacturers and retailers may decide to wait for the new FTC regulations to ensure that all specific requirements of warranty disclosure and availability are met.