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Think About Your Warranties

Posted by Zehra Mahid | Jul 11, 2019 | 0 Comments

Warranties are an important area for small business owners to think through before they (or their advertisers) put things in writing. Your warranties are your promise that you'll make things right if they happen to go wrong. Warranties set customer expectations around the costs you are willing to assume for repairs, replacements and returns. The last thing you want to do is put things in writing that you can't actually pay for. 

There are two types of warranties: express warranties and implied warranties. Express warranties are specific warranties that you give your customer. An automobile parts seller may provide a 180 day warranty on a non-moving part. Implied warranties are not expressly stated but they can be reasonably assumed. For example, when a customer orders noodles at a restaurant, those noodles come with an implied warranty that they are safe to eat. 

When your warranties are breached, expect to be on the hook for costs. 

If you have a contract with your customer, make sure you include language that places reasonable limits around your warranties. Most states have laws about warranties for the sale of goods. The most common warranties are the implied warranty for merchantability (your product works the way it is supposed to), fitness for a particular purpose (your product will do something specific such as hold a certain amount of weight), title (you have clear title to sell your product), and non infringement (either your product is made up of original work or you have already obtained all necessary IP rights to be able to sell that product without infringing on somebody else's rights). All of these warranties can be waived through the use of waiver clauses. 

Good warranties can help avoid a lot of costs and legal headaches. You want to provide your customers with warranties that give them enough comfort to do business with you without creating unanticipated or unmanageable costs. Pay attention to your promises so you can stick to them.

About the Author

Zehra Mahid

I am the owner of the Mahid Law Firm, a privacy and cybersecurity law firm. I graduated from the University of Maryland School of Law in 2002. I began my legal career with the American Bar Association in Washington DC. I then went on to spend the majority of my legal career working for Humana I...

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