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(1) The implied warranty of "merchantability" is a merchant's promise that goods sold will do what they are supposed to do, and that there is nothing significantly wrong with them.
The implied warranty of "fitness for a particular purpose" is a promise that you make when your customer relies on your advice that a product can be used for some specific purpose.
(2) Express warranties, on other hand, are promises that you make (voluntarily) about your product, or about your commitment to remedy defects and malfunctions that some customers may experience. In other words, a satisfaction guarantee of sorts.
For more information and examples of these terms, see The Federal Trade Commission's (FTC's) "Understanding Warranties" article at: http://www.ftc.gov/bcp/conline/pubs/buspubs/warranty/undrstnd.htm
The FTC applies following requirements to businesses who choose to offer a written warranty (but offering one isn't required). There are three rules companies must follow when offering written warranties on consumer products over $10-$15 (the rule being adhered to is dependent upon price of product.)
The FTC's Rule on Pre-Sale Availability of Written Warranty Terms requires that written warranties on consumer products costing more than $15 be available to consumers BEFORE they buy. The rule has provisions that specify what retailers, including mail order (*this category includes Internet purchases*), catalog, and door-to-door sellers, must do to accomplish this. For details see http://www.ftc.gov/bcp/conline/pubs/buspubs/warranty/making.htm
There are NO time limitations on implied warranties, (which are automatically required and enforced by government at point of sale). However, state statutes of limitations for breach of either an express OR implied warranty are generally four years from date of purchase.
This means that buyers have four years in which to discover and seek a remedy for problems that were present in product *at time it was sold.* Obviously, this doesn't cover damage due to misuse, natural wear and tear, etc. It simply states that product must do what it was intended to do for average "life" of product.
If you choose not to offer a written warranty, law in most states allows you to avoid an implied warranty for that product. In order to do that, you need to make it perfectly clear to your customers, (in writing), that you won't be responsible if product malfunctions or is defective. You must *specifically indicate* that you don't warrant "merchantability" (see definition above), or specify that you're selling product "with all faults," or "as is."
TIP: If you offer a written warranty for a product, you MUST also offer implied warranties on product.
A few states have special laws on how you need to phrase an "as is" clause, while other states don't allow sale of "as is" consumer products at all. (For specific information on how your state treats "as is" disclosures, consult your attorney.)
TIP: You can't avoid responsibility for personal injury caused by a defect in your product, even if you sell it "as is." If it proves to be defective or dangerous, causing personal injury to someone, you still may be liable for damages. Selling product "as is" doesn't eliminate THIS liability.
As you can see, there are a lot of things to consider when you're constructing your money-back guarantee -- I'll bet even more than you bargained for. ;-) Just remember importance of offering an ethical, easy to understand, law-abiding guarantee, and you'll surely be rewarded with increased sales!
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