Internet sales, disclaimers of warranties

In the context of Internet sales, disclaimers of warranties should be plainly visible to customers before they make a purchase. Courts may find that the disclaimer of a warranty is conspicuous even if contained within product packaging and not discovered before the purchase of the product. To be on the safe side, the buyer should be made clearly aware of the disclaimer within the contract prior to the purchase, either by contrasting font near the description of the product or in a pop up box relating the details of the disclaimer. A hyperlink to such information is likely not enough. The federal Magnuson-Moss Warranty Act places specific duties and liabilities on suppliers who offer written warranties on consumer products and restricts the power of the parties to disclaim implied warranties. This law does not require sellers to provide consumers with written warranties; nor does it regulate the specific substantive terms of warranties. It does, however, require that manufacturers and sellers provide consumers with detailed information about written warranty coverage.In addition, the statute affects both the rights of consumers and the obligations of warranty providers under any written warranties. If a company offers a written warranty to consumers, the warranty must be clearly and conspicuously designated as either a "Full (Statement of Duration) Warranty" or a "Limited Warranty," depending upon whether the warranty satisfies certain standards set forth in Magnuson-Moss. The designation must appear clearly and conspicuously as a caption, or prominent title, clearly separated from the text of the warranty. The company must clearly and conspicuously disclose written warranties in a single document, and include, in simple and readily understood language, certain items of information, such as: (1) the identities of the parties to whom the warranty is extended; (2) a description of the products and parts covered by the warranty and, where necessary for clarification, a description of what is excluded from coverage; (3) a statement of what the warrantor will do in the event the product fails to conform to the written warranty; and (4) a step-by-step explanation of the procedures which the consumer should follow in order to obtain the performance of any warranty obligation. Magnuson-Moss prohibits any deceptive warranty terms. Written warranties must be displayed in close proximity to the warranted product and must be readily available for examination by the prospective buyer. As an alternative to displaying the warranty, the seller may place signs in prominent locations informing the buyer that copies of the warranty will be furnished upon request prior to the sale. The Federal Trade Commission has issued special guidance for providing information about warranties in internet sales transactions. (See the FTC publication "A Business person's Guide to Federal Warranty Law", online at: http://www.ftc.gov/bcp/conline/pubs/buspubs/warranty.htm.)