Looking to develop written warranties for your precast products? Here’s what you need to know.
By Bridget McCrea
Even if your customers know you’ll correct any issues that they experience with your products, it pays to have a warranty program in place for assurance and to address any challenges that may come up at a later date. Much like you’d expect a new car, laptop or headphones to come with some type of guarantee, your customers will appreciate knowing that your workmanship is covered for a certain period of time.
Precast manufacturers who do not offer warranties are missing out on an opportunity to let the world know that they stand behind their work. This approach not only gives customers a good feeling about working with you, it also helps them rest easier knowing that you’ll rectify any issues quickly – typically at no charge to them – should they arise.
A warranty includes terms under which the manufacturer will repair the product (or make an exchange) in the event that it doesn’t function as originally described or intended.
“A properly drafted manufacturer’s warranty should let the customer know that a manufacturer stands behind the product as the customer uses it,” said David Reischer, Esq., a business law attorney at LegalAdvice.com. “In the warranty, the manufacturer should also represent that there are no defects and that the product is safe for customer use.”
Warranties can be either express or implied. Express warranties explicitly set out the terms of the promise. Implied warranties are promises that, although not explicitly included in the contract, say that the manufacturer will stand behind its product.
An express warranty is a written warranty that includes specific language, while an implied warranty is a warranty that exists under the law. The most typical implied warranty is called warranty of fitness for a particular purpose. With this warranty type, a customer, client or owner can sue for breach of contract if a product fails within a certain timeframe. The manufacturer can be sued both for negligence (e.g., building a poor product) and for breach of the implied warranty of fitness for a particular purpose.
“It’s kind of like playing soccer with three balls,” said J. Robert Keena, attorney at law with Hellmuth & Johnson in Minneapolis. “The plaintiff only has to win under one of those theories.
According to Reischer, express warranties come in different varieties and depend on the product being manufactured and the promises that sellers typically offer. A “power surge warranty” can be used to warrant against damage from an unexpected power surge, for instance, while a “food loss warranty” may promise to offer consumers compensation for spoiled food when a refrigeration product fails.
In most cases, warranties come with time limits and exclude certain things. For precasters, some common exclusions include damage caused by improper installation, the labor required to reinstall the product (in the case of a warranty claim) or product damage that occurs during storage or shipping.
“If, for example, you store products on-site during construction and they get hit or damaged, your warranty should exclude those problems,” said Keena, who tells precasters to include time parameters and filing instructions in their warranties. For example, you might require a certified letter outlining the problem within 30 days of discovering it.
Manufacturer warranties typically cover the product for an initial time period and are included at no cost to the customer. The manufacturer should use past experience to fold the warranty cost into the overall product cost. An extended warranty, on the other hand, will promise to make repairs for product failures even after the original manufacturer warranty expires. These extended warranties can be purchased by the customer, similar to how consumers can buy an extended warranty for a new household electronic or a vehicle.
How to write your warranty
When developing your product warranty, set forth the length of time that your company is going to stand behind the product. This should typically be at least one year. Many manufacturing warranties establish that there is coverage only if the customer maintains or uses the product as directed.
“It’s important to note that a warranty does not absolve a manufacturer of legal liability if a purchaser or other third party is injured or killed while using the product,” Reischer noted.
While you can draft your warranty language yourself, Reischer advises working with your legal department and/or an outside consultant who has experience in this area. Involve other departments, such as production, shipping and installation to ensure that the language reflects both the operational and financial considerations that go into repairing and replacing defective products.
Be sure to factor in any disclaimers that belong in the text. Disclaimers are a denial or disavowal of legal claim that help set parameters around what will and won’t be covered in the event of a problem. However, they don’t absolve companies from responsibility in the case of a legal claim.
The dos and don’ts of warranty development
Phil Nicolosi of Phil Nicolosi Law, P.C., in Rockford, Ill., said putting your warranty in writing allows the manufacturer to disclaim any implied warranties in many instances while also more clearly spelling out what is and isn’t covered in the event of a problem. This puts customers at ease and gives both parties a guide when handling claims. It sets limitations that attorneys and judges can use when making decisions during legal action.
“With express warranties, you can limit someone’s ability to file a lawsuit and/or the arguments behind their case,” Nicolosi said. “Unless there’s a federal or state requirement stating that you have to make a specific warranty for a certain duration, it’s going to be difficult for someone to make an argument when there’s a written warranty in place.”
From his experience, Nicolosi said it’s best when the manufacturer drafts the warranty language first and then passes the language along to an attorney to review and amend as needed.
“The manufacturer should at least take a stab at it first because they know their products, materials and parts better than anyone else does,” Nicolosi said.
The exception is any manufacturer that operates with in-house counsel. In this case, the company’s internal team likely possesses the appropriate level of organizational and industry expertise.
Regardless of who you pick to draft the warranty language, Nicolosi noted the focus should be on limiting liability in a very clear, detailed manner. Using a warranty template and then adding a 1-year warranty for workmanship and parts on top may satisfy your customers, but it won’t protect your company very well in the event of a lawsuit.
“If your warranty is generic and just four or five lines long, you’re doing yourself a huge disservice,” Nicolosi warned. “Check with your state, the uniform commercial code (UCC) and warranty provisions; determine how they apply to your products; and then reread your language to make sure nothing is unclear or deceptive. Make sure you’re going to do everything you say you’re going to do within the warranty – it’s that simple.”
Good customer service
According to Keena, warranties both protect your company in the event of a lawsuit and spread goodwill among customers who know they’re getting a quality product that someone is willing to stand behind.
“At least if something goes wrong with the product, your customers know there’s going to be a simpler remedy than a lawsuit,” Keena said.
Time limits are also important. The time limits for express warranties are contained within the warranties themselves, are established by the precaster and are based on the anticipated service life for which the product is designed. For example, if a particular precast product is designed for a service life of approximately 100 years, then even offering a 5-to-10-year warranty against defects and failures could set a plant apart from competitors that only offer a 1-year warranty or no warranty at all.
A solid express warranty also ensures that customers are taken care of while giving them a remedy in case something goes wrong.
“It’s good customer service,” said Keena, who tells companies to focus their warranty-developing effort solely on their own activities and responsibilities versus trying to include situations that often can’t be controlled, such as an installer’s negligence. “You only want to be responsible for your own manufacturing process.” PI
Bridget McCrea is a freelance writer who covers manufacturing, industry and technology. She is a winner of the Florida Magazine Association’s Gold Award for best trade-technical feature statewide.