Tuesday, 16 October 2012

Understanding warranties

Many a time, when a product is bought, the buyer is told that it is under warranty.  This is a selling point as it gives a sense of assurance and comfort to the buyer.  However, such a statement in general terms could be meaningless unless the scope and effect of the warranty is clearly stated.

There has been a complaint published in a local daily, about a handphone buyer expressing his disappointment with a cellphone company because even though his handphone purchase was accompanied by a one-year warranty, the company refused to repair it even though he had problems with it after two weeks.

Apart from the fact that his complaint was not attended to speedily, he was upset to receive a message, several days later, saying that his cellphone was beyond repair and that he should take it back.

The word "warranty" is used in different situations to mean different things, with different implications and consequences.  However, in the context of the above situation, it refers to a promise by a manufacturer to repair goods that are faulty when used.

While it may appear that the complainant has been unfairly treated, one needs to consider whether it is a case of a phone that was faulty and if that fault is the result of a short-coming in the manufacturing process.

According to the same report, the cellphone company says that when the housing of the cellphone was opened, the components were damp and damaged.  Sand was found inside the keypad and the housing, causing the company to believe that the phone had fallen into a body of water.

If what the company said was true, the problem would have arisen not because of a manufacturing defect or the inability of the product to function for a specified period, but was caused by an act of the complainant, for which he was responsible.

Based on the general principles of liability, it would neither be fair nor reasonable to make the manufacturer liable without any qualification.  But in any event, if the fine print of any warranty is examined, it is likely to state that the warranty is in respect of manufacturing defects or with regards to a specific representation made.

In some cases, the warranty may also state that it only covers the replacement of parts and not the workmanship or costs of collecting or delivering the product in connection with the repairs.  In other cases, the warranty could be for the cost of carrying out repairs, with the consumer having to bear the costs of purchase of any parts that have to be replaced.

It is therefore necessary for the consumer to familiarise himself with the terms and conditions as well as the scope and restrictions contained in the warranty.  One would be misguiding oneself if one merely took the word "warranty" to mean an unqualified assurance of all and any shortcomings or defects whenever or however these came about.

In the instant case, if the consumer has reason to disagree with the company, the onus will be on him to pursue the matter.  If he denies that the phone had ever fallen into any water, then the only inference that can be drawn is that either the company is not telling the truth or it must have fallen into the water when the phone was in the custody of and entrusted to the company.

The company is likely to deny any such contention.  However, if it be the former, i.e. that the problem is not due to a manufacturing defect, then the consumer can challenge this by taking it to an independent party which is in a position to say that the cause of the phone not functioning is not because of the water and the sand but within the scope of the warranty.

If the independent party can show that the reason given by the company is not supported by facts, then it will be possible for the buyer to sue the company to recover the expenses incurred in going through the entire exercise.

On the other hand, if the allegation is that the handphone fell into the water when it was in the custody of the company, then if the matter goes to court, there is likely to be conflicting testimony.  The outcome will depend on whyo the court believes, after having considered all the evidence.

In reality, a consumer will not have the resources to pursue the matter in court because of the cost in terms of money, time and effort involved.  The person can pursue the matter in the Consumer Claims Tribunal, but this will also require effort and time.

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