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Publication Date

7-1976

Document Type

Special Contribution

Abstract

The Magnuson-Moss Warranty-Federal Trade Commission Improvement Act addresses the warranty problems of the consumer in the market place. Recent discussions of consumer problems with warranties have focused on three areas. First, the length and complexity of a typical consumer product warranty makes it too confusing for the average consumer. This is particularly true in light of the consumer's ignorance of the existence of implied warranties. Second, the "warranty," which is expressly made to the consumer, customarily disclaims all implied warranties under the Uniform Commercial Code and, consequently, takes away a great deal more than it gives. Third, a consumer warranty is frequently difficult or impossible to enforce, particularly against a recalcitrant seller. The amount involved is seldom sufficient to justify the pursuit of legal remedies and the consumer usually feels that no other effective remedies are available. The problem is made more severe by the growth of the use of consumer products, the growth in the amount of spending for them, and the expanded use of the warranty as a competitive sales device. As a result, the consumer feels misled, or even cheated when confronted with warranty problems which arise from the purchase of almost everything he buys. In addition, the consumer's weak bargaining position prevents him from bargaining for more meaningful warranty protection, even if he desires to do SO.

On January 4, 1975, the Magnuson-Moss Warranty-Federal Trade Commission Improvements Act of 1975 [hereinafter the Act] was signed into law, becoming effective six months from that date. It applies to goods manufactured after the effective date. The Act, as passed, contained provisions that were essentially similar to bills passed by the Senate in two previous Congresses, neither of which had been passed by the House. The legislative history indicates a continuing desire on the part of the Senate to provide some relief for the consumer problems addressed by this bill., The Act authorizes and requires the Federal Trade Commission to make rules in the areas of disclosure, pre-sale availability of warranties and dispute settlement mechanisms on or before January 4, 1976. As discussed below, proposed rules were issued on July 15, 1975 and final rules were issued on December 31, 1975.

This article will first present an overview of the Act and the rules which provisions of the Act with the provisions of the Uniform Commercial Code (UCC) dealing with coverage, disclaimer, and remedies in consumer warranties. The UCC comparison will focus primarily on specific code sections and individual cases will be cited only where they substantially change application of the UCC. The three rules adopted December 31, 1975 will also be discussed.

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