Let us consult the Federal Trade Commission (FTC) about exactly what a manufacturer of a specific product can and cannot get away with. This article is targeted mainly at those Microsoft Xbox 360 owners that have broken hardware and those that are living in fear about their own consoles breaking. Many folks are racing out to purchase extended service agreements for an additional cost before they’re 90-day express warranty expires
I am not a lawyer so I’m not going to try to get all technical and use big words that I do not understand. I’m a consumer that owns an Xbox 360 and I’ve noticed a few people on this site (www.2old2.play.com) have had failed hardware and are in the process of getting new consoles shipped to them from Microsoft Tech Support.
Rather then live in fear about my ‘impending doom’ of my own Xbox 360 dying I’m going to try to prepare myself for if such a time arises (lets hope it does not for anyone including myself). I do not feel I should have to go out and purchase an extended warranty for something that up and dies without any aggravated assault of my own. My console sits on my desk and does not move so if it just dies without warning I do not believe I, the consumer, should be considered at fault. Nor do I plan on footing the bill for repairs on a product that was flawed from its origin of birth.
Let me also state for the record that I do not believe extended warranties are bad in all cases or service contracts that cover more then the limited warranties cover. I do believe they are useless if they offer me nothing more then the Federal Trade Commission enforces in the United States of America. I am not out to wasting my money on services that offer me nothing.
Our test example in this article will be against the Microsoft Xbox 360 and what they have listed as the warranty information here. I shall paraphrase it for you:
The warranty outline ends with the text:
“As to any defects discovered after the Warranty Period, there is no warranty or condition of any kind.”
So what does that mean to the customer? Must we pony up for extended agreements after 90-days have gone by? Does a vendor shipping the Xbox 360 offer a service contract and is it a wise investment?
If you continue to read your warranty information for “fine print” you’ll see:
“You may have greater rights existing under legislation in your jurisdiction. Where any term of this Limited Warranty is prohibited by such laws, it shall be null and void, but the remainder of the Limited Warranty shall remain in full force and effect.”
What does that mean? Well, below you’ll find information about Implied Warranties and “such laws” and you will know exactly what your product warranty means (if you live in the United States anyway). This little snippet allows Microsoft to squeak by untouched in jurisdictions that do not enforce an implied full/limited warranty (in the USA, that’s Louisiana). Note that “jurisdictions” are defined as “The extent of authority or control.” Thus the US jurisdiction (by law) is anything we have authority or control over. If you live in the US I’m pretty sure you’ll fit the bill (even Hawaii and Alaska), but if you’re some province or something… talk to your attorney. I live in one of the fine US States so my research revolves around laws that govern me and my neighbors. As a side note, the Xbox 360 warranty discusses how this is enforced in Canada (read it if you live there so that you can understand your rights).
There are also exclusions that will not be covered in the Implied ‘Limited Warranty’ (which makes it a ‘limited’ rather then a ‘full’ warranty) such as acts of god (power surges, abuse, flooding, hurricanes, etc.), tampering with it, scratching serial numbers, altering it, and repairs done by non-authorized repair centers. Most of this stuff is common sense I believe (or hope).
If you played your Xbox 360 so much that you failed to use the restroom and this results in peeing all over the console then that will cost you money out of your pocket for repairs. This is not “normal behavior” and probably falls under the “misuse” or “acts of god” categories.
Let’s not focus on stupid things that occur to the Xbox 360 console. Let us pretend for a moment that you are the original purchaser of this at a retail outlet like Best Buy and you were simply using your system as it was designed. You also followed the rules for setup and installation. At the time you were in the middle of Madden ’06 your console goes dark… never to return again. Not even a reboot. You get the red lights from hell that symbolizes “hardware failure.” What should you know?
First, you should know your rights and what you are able to get away with. That is where I call on the folks of the FTC because they can talk legal speak and they can translate to common speak.
Microsoft, as stated above, offers a 90-day Express Warranty. If you’re within 90-days from original purchase then Microsoft themselves has volunteered (by written statement) that they will take responsibility for a broken Xbox 360 under normal use from the original purchaser.
This basically means that they’re taking responsibility for the screw up and you can safely call them and they’ll give you ‘no hassle’ (if you can prove you purchased it of course) about returning it. This does not mean the support crew is intelligent, understands the product, and gets you the new one on a timely manner. It just means the company assumes responsibility for the problem.
Let us now take a few moments to understand some definitions to the warranties Microsoft is speaking about. This information is taking off the FTC website (http://www.ftc.gov).
Express Warranties
“Express warranties, unlike implied warranties, are not ‘read into’ your sales contracts by state law; rather, you explicitly offer these warranties to your customers in the course of a sales transaction. They are promises and statements that you voluntarily make about your product or about your commitment to remedy the defects and malfunctions that some customers may experience.
Express warranties can take a variety of forms, ranging from advertising claims to formal certificates. An express warranty can be made either orally or in writing. While oral warranties are important, only written warranties on consumer products are covered by the Magnuson-Moss Warranty Act.”
(See more on the Magnuson-Moss Warranty Act below)
The Federal Trade Commission translates this to mean “You cannot avoid implied warranties if you offer a written warranty on a consumer product.” Microsoft supplies a written warranty in their 90-day express warranty. This does not mean that they get out of the implied warranty because they wrote up a nice express one. Microsoft (unlike some companies) makes it clear that there is indeed an implied warranty in the jurisdictions that enforce it which makes me respect them a little more for not leaving you in the dark about the legal rules. They could say nothing about it and let you figure it out for yourself (since its ‘implied’).
Implied Warranties
“Implied warranties are unspoken, unwritten promises, created by state law, that go from you, as a seller or merchant, to your customers. Implied warranties are based upon the common law principle of ‘fair value for money spent.’ There are two types of implied warranties that occur in consumer product transactions. They are the implied warranty of merchantability and the implied warranty of fitness for a particular purpose.”
Please note that Federal Trade Commission states: Section 2-314 of the Uniform Commercial Code, which is law in every state but Louisiana, covers the implied warranty of merchantability.
So if you live in Louisiana I’d checkup to see exactly what your state does about implied warranties given that they’re unique from all other states in the US. The FTC suggests you talk with an attorney in your state (in this case Louisiana) if you are unsure of your rules or rights.
The implied warranties section above is translated by the FTC as stating that “Basically, your product is "merchantable" if it does what it is supposed to do.”
Understanding the Magnuson-Moss Warranty Act
“The Magnuson-Moss Warranty Act is the federal law that governs consumer product warranties. Passed by Congress in 1975, the Act requires manufacturers and sellers of consumer products to provide consumers with detailed information about warranty coverage. In addition, it affects both the rights of consumers and the obligations of warrantors under written warranties.”
My translation: You should have warranty information included with your Xbox 360 or other console system. Microsoft even posts this online which is nice.
The FTC underscores the following points of the fully defined Magnuson-Moss Warranty Act as follows:
Lastly if you scan the Act (cited below) you will see that it clearly states the manufacturer (in this case Microsoft) must clearly state:
Microsoft has followed all of the above rules within their warranty by telling you its limited, it is understandable and it enumerates everything that is not covered (i.e. acts of god), and you can read about the warranty at Best Buy if you request it.
Understanding the Service Contract
“A service contract is an optional agreement for product service that customers sometimes buy. It provides additional protection beyond what the warranty offers on the product. Service contracts are similar to warranties in that both concern service for a product. However, there are differences between warranties and service contracts.”
It is important to note that Service Contract’s do not wipe your implied warranties:
“Sellers of consumer products who make service contracts on their products are prohibited under the Act from disclaiming or limiting implied warranties. (Remember also that sellers who extend written warranties on consumer products cannot disclaim implied warranties, regardless of whether they make service contracts on their products.)”
So if someone offers you a service contract for one year and covers the same information that Microsoft has listed in their Implied Limited Warranty then I’m pretty sure the service contract is a waste of your time for all except convenience (i.e. if you get one through CompUSA that might mean you can return it to the store rather then sending it off to Microsoft. You can decide if that is worth it to you or not).
The only thing I could not find in the FTC document was an exact restriction on “time” for a warranty. I did a little search on Nolo.com to see if they could give more information (it’s a free do-it-yourself legal advice page) and all I could find was:
“In most states, an implied warranty lasts forever. In a few states, however, the implied warranty lasts only as long as any express warranty that comes with a product.”
I believe the only place where implied warranties last as long as the express warranty is Louisiana because Louisiana doesn’t seem to recognize implied warranties. Since Microsoft has volunteered us 90-days of warranty that covers any legal issues for those in Louisiana. I suggest an extended warranty if you live in LA or are planning to buy one in that state (I wonder how the warranty works if you purchase an Xbox 360 online in Louisiana).
To buy or not to buy extended services
This is a personal preference. I did not purchase one because I can put my Xbox 360 on a surge protector or UPS and I do not move it. If I drop the thing or misuse it I feel it’s my responsibility to work out my personal issues.
The only advantage I’d see to a Service Agreement is that I can walk into the place I bought my merchandise and bring it to the service desk and say “me brokie, you fixie” and the problem is solved for me. For me this comes down to how mobile my expensive electronic device is and how gentle you must be with it. Agreement for my Xbox 360: no chance, iPod Nano: sure thing!
Sites of interest (and cited info):
Nolo: talks about your rights and warranties.
CNET: Should you pay for an extended warranty?
A Businessperson's Guide to Federal Warranty Law- Federal Trade Commission
Hopefully this little document will bring down some of the concern of your Xbox 360 dying seven months into its use. If anything it can give you a little piece of mind that we have laws to protect you from faulty products and shady manufacturers. Overall Microsoft seems to have their act together [pun intended] and supplies enough information (if you read it) to tell you what exactly your rights are regarding their game console.
If there is additional information lawyers would like to provide as a comment to this document then please do so. We, the consumers, could use your free advice!
CodeMonkey
Rather then live in fear about my ‘impending doom’ of my own Xbox 360 dying I’m going to try to prepare myself for if such a time arises (lets hope it does not for anyone including myself). I do not feel I should have to go out and purchase an extended warranty for something that up and dies without any aggravated assault of my own. My console sits on my desk and does not move so if it just dies without warning I do not believe I, the consumer, should be considered at fault. Nor do I plan on footing the bill for repairs on a product that was flawed from its origin of birth.
Let me also state for the record that I do not believe extended warranties are bad in all cases or service contracts that cover more then the limited warranties cover. I do believe they are useless if they offer me nothing more then the Federal Trade Commission enforces in the United States of America. I am not out to wasting my money on services that offer me nothing.
Our test example in this article will be against the Microsoft Xbox 360 and what they have listed as the warranty information here. I shall paraphrase it for you:
- 90-Day Express Warranty. Subject to the terms and conditions of this Limited Warranty, Microsoft warrants to you only (the original purchaser), that under normal use and service the Xbox Product will substantially conform with the accompanying printed user instruction materials for a period of 90 days starting as of the date of your sales receipt (the "Warranty Period").
- Implied Warranty. You may also have an implied warranty and/or condition under the laws of some jurisdictions, which is hereby limited to the duration of the Warranty Period. Some jurisdictions do not allow limitations on how long an implied warranty or condition lasts, so the foregoing limitation may not apply to you.
The warranty outline ends with the text:
“As to any defects discovered after the Warranty Period, there is no warranty or condition of any kind.”
So what does that mean to the customer? Must we pony up for extended agreements after 90-days have gone by? Does a vendor shipping the Xbox 360 offer a service contract and is it a wise investment?
If you continue to read your warranty information for “fine print” you’ll see:
“You may have greater rights existing under legislation in your jurisdiction. Where any term of this Limited Warranty is prohibited by such laws, it shall be null and void, but the remainder of the Limited Warranty shall remain in full force and effect.”
What does that mean? Well, below you’ll find information about Implied Warranties and “such laws” and you will know exactly what your product warranty means (if you live in the United States anyway). This little snippet allows Microsoft to squeak by untouched in jurisdictions that do not enforce an implied full/limited warranty (in the USA, that’s Louisiana). Note that “jurisdictions” are defined as “The extent of authority or control.” Thus the US jurisdiction (by law) is anything we have authority or control over. If you live in the US I’m pretty sure you’ll fit the bill (even Hawaii and Alaska), but if you’re some province or something… talk to your attorney. I live in one of the fine US States so my research revolves around laws that govern me and my neighbors. As a side note, the Xbox 360 warranty discusses how this is enforced in Canada (read it if you live there so that you can understand your rights).
There are also exclusions that will not be covered in the Implied ‘Limited Warranty’ (which makes it a ‘limited’ rather then a ‘full’ warranty) such as acts of god (power surges, abuse, flooding, hurricanes, etc.), tampering with it, scratching serial numbers, altering it, and repairs done by non-authorized repair centers. Most of this stuff is common sense I believe (or hope).
If you played your Xbox 360 so much that you failed to use the restroom and this results in peeing all over the console then that will cost you money out of your pocket for repairs. This is not “normal behavior” and probably falls under the “misuse” or “acts of god” categories.
Let’s not focus on stupid things that occur to the Xbox 360 console. Let us pretend for a moment that you are the original purchaser of this at a retail outlet like Best Buy and you were simply using your system as it was designed. You also followed the rules for setup and installation. At the time you were in the middle of Madden ’06 your console goes dark… never to return again. Not even a reboot. You get the red lights from hell that symbolizes “hardware failure.” What should you know?
First, you should know your rights and what you are able to get away with. That is where I call on the folks of the FTC because they can talk legal speak and they can translate to common speak.
Microsoft, as stated above, offers a 90-day Express Warranty. If you’re within 90-days from original purchase then Microsoft themselves has volunteered (by written statement) that they will take responsibility for a broken Xbox 360 under normal use from the original purchaser.
This basically means that they’re taking responsibility for the screw up and you can safely call them and they’ll give you ‘no hassle’ (if you can prove you purchased it of course) about returning it. This does not mean the support crew is intelligent, understands the product, and gets you the new one on a timely manner. It just means the company assumes responsibility for the problem.
Let us now take a few moments to understand some definitions to the warranties Microsoft is speaking about. This information is taking off the FTC website (http://www.ftc.gov).
Express Warranties
“Express warranties, unlike implied warranties, are not ‘read into’ your sales contracts by state law; rather, you explicitly offer these warranties to your customers in the course of a sales transaction. They are promises and statements that you voluntarily make about your product or about your commitment to remedy the defects and malfunctions that some customers may experience.
Express warranties can take a variety of forms, ranging from advertising claims to formal certificates. An express warranty can be made either orally or in writing. While oral warranties are important, only written warranties on consumer products are covered by the Magnuson-Moss Warranty Act.”
(See more on the Magnuson-Moss Warranty Act below)
The Federal Trade Commission translates this to mean “You cannot avoid implied warranties if you offer a written warranty on a consumer product.” Microsoft supplies a written warranty in their 90-day express warranty. This does not mean that they get out of the implied warranty because they wrote up a nice express one. Microsoft (unlike some companies) makes it clear that there is indeed an implied warranty in the jurisdictions that enforce it which makes me respect them a little more for not leaving you in the dark about the legal rules. They could say nothing about it and let you figure it out for yourself (since its ‘implied’).
Implied Warranties
“Implied warranties are unspoken, unwritten promises, created by state law, that go from you, as a seller or merchant, to your customers. Implied warranties are based upon the common law principle of ‘fair value for money spent.’ There are two types of implied warranties that occur in consumer product transactions. They are the implied warranty of merchantability and the implied warranty of fitness for a particular purpose.”
Please note that Federal Trade Commission states: Section 2-314 of the Uniform Commercial Code, which is law in every state but Louisiana, covers the implied warranty of merchantability.
So if you live in Louisiana I’d checkup to see exactly what your state does about implied warranties given that they’re unique from all other states in the US. The FTC suggests you talk with an attorney in your state (in this case Louisiana) if you are unsure of your rules or rights.
The implied warranties section above is translated by the FTC as stating that “Basically, your product is "merchantable" if it does what it is supposed to do.”
Understanding the Magnuson-Moss Warranty Act
“The Magnuson-Moss Warranty Act is the federal law that governs consumer product warranties. Passed by Congress in 1975, the Act requires manufacturers and sellers of consumer products to provide consumers with detailed information about warranty coverage. In addition, it affects both the rights of consumers and the obligations of warrantors under written warranties.”
My translation: You should have warranty information included with your Xbox 360 or other console system. Microsoft even posts this online which is nice.
The FTC underscores the following points of the fully defined Magnuson-Moss Warranty Act as follows:
- The Act improves consumers' access to warranty information.
- The Act enables consumers to comparison shop for warranties.
- The Act encourages warranty competition.
- The Act promotes timely and complete performance of warranty obligations.
Lastly if you scan the Act (cited below) you will see that it clearly states the manufacturer (in this case Microsoft) must clearly state:
- As a warrantor, you must designate, or title, your written warranty as either "full" or "limited."
- As a warrantor, you must state certain specified information about the coverage of your warranty in a single, clear, and easy-to-read document.
- As a warrantor or a seller, you must ensure that warranties are available where your warranted consumer products are sold so that consumers can read them before buying.
Microsoft has followed all of the above rules within their warranty by telling you its limited, it is understandable and it enumerates everything that is not covered (i.e. acts of god), and you can read about the warranty at Best Buy if you request it.
Understanding the Service Contract
“A service contract is an optional agreement for product service that customers sometimes buy. It provides additional protection beyond what the warranty offers on the product. Service contracts are similar to warranties in that both concern service for a product. However, there are differences between warranties and service contracts.”
It is important to note that Service Contract’s do not wipe your implied warranties:
“Sellers of consumer products who make service contracts on their products are prohibited under the Act from disclaiming or limiting implied warranties. (Remember also that sellers who extend written warranties on consumer products cannot disclaim implied warranties, regardless of whether they make service contracts on their products.)”
So if someone offers you a service contract for one year and covers the same information that Microsoft has listed in their Implied Limited Warranty then I’m pretty sure the service contract is a waste of your time for all except convenience (i.e. if you get one through CompUSA that might mean you can return it to the store rather then sending it off to Microsoft. You can decide if that is worth it to you or not).
The only thing I could not find in the FTC document was an exact restriction on “time” for a warranty. I did a little search on Nolo.com to see if they could give more information (it’s a free do-it-yourself legal advice page) and all I could find was:
“In most states, an implied warranty lasts forever. In a few states, however, the implied warranty lasts only as long as any express warranty that comes with a product.”
I believe the only place where implied warranties last as long as the express warranty is Louisiana because Louisiana doesn’t seem to recognize implied warranties. Since Microsoft has volunteered us 90-days of warranty that covers any legal issues for those in Louisiana. I suggest an extended warranty if you live in LA or are planning to buy one in that state (I wonder how the warranty works if you purchase an Xbox 360 online in Louisiana).
To buy or not to buy extended services
This is a personal preference. I did not purchase one because I can put my Xbox 360 on a surge protector or UPS and I do not move it. If I drop the thing or misuse it I feel it’s my responsibility to work out my personal issues.
The only advantage I’d see to a Service Agreement is that I can walk into the place I bought my merchandise and bring it to the service desk and say “me brokie, you fixie” and the problem is solved for me. For me this comes down to how mobile my expensive electronic device is and how gentle you must be with it. Agreement for my Xbox 360: no chance, iPod Nano: sure thing!
Sites of interest (and cited info):
Nolo: talks about your rights and warranties.
CNET: Should you pay for an extended warranty?
A Businessperson's Guide to Federal Warranty Law- Federal Trade Commission
Hopefully this little document will bring down some of the concern of your Xbox 360 dying seven months into its use. If anything it can give you a little piece of mind that we have laws to protect you from faulty products and shady manufacturers. Overall Microsoft seems to have their act together [pun intended] and supplies enough information (if you read it) to tell you what exactly your rights are regarding their game console.
If there is additional information lawyers would like to provide as a comment to this document then please do so. We, the consumers, could use your free advice!
CodeMonkey
