Do You Know What Warranties You are Making?

on May 13, 2014 by John Tenaglia

Businesses regularly send employees out to find new business opportunities.  Often new business is rewarded.  But an employee can bind a company with oral warranties far in excess of those offered by the company.  So long as the employee is engaging in sales, they have the power, as a matter of law, to create an express warranty, even without the employer’s specific consent.  In other words, an express warranty can arise when the sales clerk opines that a specific type of nail is appropriate for the job in question.

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As a result, it is important to educate employees what warranties the company actually does offer to its customers  and, just as important, what warranties it does not offer.  Under New York law, express oral warranties are created by any “affirmation of fact or promise, description, or sample or model relating to the product which is made a part of the basis of the bargain.”  But not every statement of a product’s quality is a warranty – “mere puffing” does not create a warranty.  For example, a statement that the product is one of the finest in the industry does not create a warranty.  However, a statement that the product will last ten years is likely an oral warranty.

Another common instance where express warranties can unexpectedly arise is in advertisements, e-mails, product guides, or other literature distributed to the general public.  In order for these warranties to be enforceable, however, the buyer must have actually known about the warranty and relied on it in making the purchase.  Note, however, that written information has to be readily available to the public and relate to the specific product at issue.  An overarching promise that the customer will be satisfied is not enough to be considered a warranty.

In making a warranty, the salesperson does not have to use the term warranty, guarantee, or promise for it to be enforceable.  In fact, the salesperson does not even have to intend for a warranty to be made.  To make matters worse, unlike advertisement or literature warranties, the buyer does not, necessarily, have to rely on the words creating the warranty for it to be enforceable.

But businesses are not without recourse.  Perhaps the best way to protect against warranty claims is for a strongly worded disclaimer of oral warranties in the written contract between the parties.  By incorporating an oral warranty disclaimer in the written contract, the business can make oral warranty claims substantially more difficult to pursue.

The legal team at Slater, Tenaglia, Fritz & Hunt, P.A. consists of experienced attorneys and dedicated staff. We use advanced technology to benefit our clients. We are committed to providing aggressive representation of our clients’ rights while delivering first-class customer service. We can be contacted by phone at (201) 820-6001 in New Jersey or (212) 692-0200 in New York. We can also be found on the Internet, Facebook, LinkedIn, Twitter, Google+ and YouTube. And remember, all initial consultations are complimentary.