If you’re like most small ecommerce businesses, you’ll write your own product/service descriptions. In doing so, you will encounter a legal pitfall unknown to most… you may be creating unintended warranties that could result in substantial liability.
How can this be? How can you unwittingly create a warranty for which you will be held legally liable?
Uniform Commercial Code Warranties
The Uniform Commercial Code (UCC) is a collection of state laws that are relatively “uniform” from state to state. These laws govern the sale of goods, among other things.
In order to understand how you may create an unintended warranty under the UCC, first you need to understand that there are 2 basic kinds of warranties:
* implied warranties; and
* express warranties.
Implied warranties are created under state law. They are unwritten promises that a product will, at the time it is sold, meet certain minimum conditions, such as:
* be fit for a particular purpose; and
* be generally of merchantable quality.
Express warranties are promises that are explicitly offered to a purchaser, whether they appear in advertising, a formal contract or certificate, or some other form.
So, the lesson regarding warranties is that your objective should be to limit all warranties to express warranties where you control the terms and conditions by your carefully worded clauses. Important points to cover with express warranties include:
* the warranty period – how long does the warranty last (start with 90 days from purchase and work from there);
* specify the standards for performance (these should be objective, such as conformity with the user manual); and
* what is the remedy for warranty breach? (repair or replace, at your option).
“EXCEPT AS MAY BE PROVIDED IN ANY SEPARATE WRITTEN AGREEMENT SIGNED BY THE PARTIES OR SEPARATE AGREEMENT ORIGINATING FROM T HIS SITE, THIS SITE AND ITS LICENSORS SPECIFICALLY DISCLAIM, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL WARRANTIES, EXPRESS OR IMPLIED, RELATING TO THIS SITE OR PRODUCTS, SERVICES AND/OR CONTENT ACQUIRED FROM THIS SITE, INCLUDING BUT NOT LIMITED TO, IMPLIED WARRANTIES OF MERCHANTABILITY, COMPLETENESS, TIMELINESS, CORRECTNESS, NON-INFRINGEMENT, OR FITNESS FOR ANY PARTICULAR PURPOSE.”
We all like surprises from time to time… but not with unintended warranties. Unintended warranties can result in substantial liability for your website business, but they can be avoided altogether if you take the proper precautions.