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Finance

What is a Breach of Warranty?

By John Kinsellagh
Updated May 17, 2024
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A breach of warranty occurs when claims or representations made about a particular product, at the time of sale, later prove to be false or erroneous. An express warranty is an explicit representation by a merchant that a certain product will perform in a manner consistent with a buyer’s expectations. A warranty may also be a promise that a product is guaranteed to be free from defects for a specified period of time.

One of the most common instances in which the breach of an express warranty occurs is in connection with the sale of an automobile. In most cases, the manufacturer of the vehicle will warranty, or guarantee, that certain components of the car will operate without defects for a specified number of miles, or for a certain period of time. Should the vehicle fail in this regard during the warranty period, a breach of warranty has occurred and the manufacturer, or more commonly, the car dealer is legally obligated to repair the defects for free.

Implied warranties arise not from the express statements of the seller, but by operation of law. Breach of the implied warranty of merchantability occurs when a product fails to perform in a manner that ordinary buyers of that particular product would expect. Merchantability refers to the reasonable expectations of users of the particular product. For example, the purchase of a ball that fails to bounce correctly, or rapidly deflates, would constitute a breach of the implied warranty of merchantability. In many situations, a seller may disclaim the implied warranty of merchantability at the time of sale by using the phrase, the product is sold “as is.” In some jurisdictions, this type of manufacturer’s disclaimer, on the implied warrantabilty for certain consumer goods, is prohibited.

A breach of the implied warrantability of fitness for a particular purpose occurs when the buyer relies on the merchant to sell him a specific product for a certain need or purpose. For example, a breach of warranty will occur if a buyer asks a merchant for a drill that will bore through concrete, but receives a drill that fails to properly perform this particular task. In some jurisdictions, breach of warranty is a recognized cause of action for a products liability lawsuit. Any personal injuries sustained by a user of a product as a result of a breach of either the implied warranty of merchantability or fitness for a particular purpose are typically legally actionable.

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Discussion Comments

By live2shop — On Aug 18, 2011

One category of products that the idea of an express warranty is fuzzy is anti-aging and anti-wrinkle creams. The wording is kind of ambiguous, so it would be kind of hard to go back to the cosmetic companies and say that your wrinkles didn't go away.

I know that they claim that you will look younger and wrinkles will diminish. I don't know how express warranties work with products like this. I'm quite sure their warranties are worded so that the customer can't make a claim that the cosmetics didn't meet their expectations. Too bad - and these products are so expensive.

By lovealot — On Aug 17, 2011

After some experience buying extended warranties for products I have bought, I have decided it isn't worth it. Even for more expensive products like appliances, TVs,and computer equipment, I have made it my policy not to be persuaded to buy an extended warranty.

These warranties usually only last for the first year. And in most cases, things don't go wrong with products the first year. They happen later on. I'm sure the retail and manufacturing companies make quite a bit on these warranties.

By julies — On Aug 17, 2011

More times than not I have come out ahead when I purchased a warranty on anything. I will only do this with larger ticket items.

I recently bought a new hair dryer and they offered me some kind of extended warranty with it. With small purchases like this, these warranties are easy for me to pass up.

The most common reasons I purchase warranties are for cars and expensive technology items. I don't know anything about fixing either one of them, and like the peace of mind that a warranty gives me.

By SarahSon — On Aug 16, 2011

We purchased a used car that had 45,000 miles on it. The manufacturers warranty expired at 50,000 miles. Even before we reached 50,000 we had some issued with the car, so decided to go ahead and buy the extended warranty.

We had a few minor things go wrong right away, and then went for a long time without having any repairs other than basic maintenance. We pretty much broke even on the warranty, but that was better than worrying about something expensive needing to be replaced.

Sometimes you have the option of paying a little bit more to get a lower deductible when you have to take it in for repairs. We had a $100 deductible each time, but that was better than a huge bill.

By John57 — On Aug 15, 2011

My experience with car warranties, is to spend the extra money for the better coverage. The basic warranty really doesn't cover very much when you start reading the fine print.

It sounds good up front, but when you realize everything that can go wrong with your car, the basic warranty doesn't usually do much good. The one time I had a basic warranty, everything that I needed to have repaired on the car was not covered.

I told myself I would never let that happen again. Even though it can be hard to come up with the extra money for the warranty, I think it is better than being stuck with huge repair bills.

Most companies will also let you make payments after you make a down payment. This way you don't have to pay to full price up front.

By nextcorrea — On Aug 15, 2011

You really have to be careful when you buy a warranty on a used car. A lot of these are sold by third part agencies that use some pretty unscrupulous business practices. In some cases these warranties are worth less than the paper they are printed on.

Unfortunately I know this from experience. I bought a used Toyota a few years back and it came with a 3 month warranty. I was nervous about buying the car but I figured that the warranty would cover me if things went wrong. It was a big reason I bought the car.

Well things did go wrong, quickly and in a big way. The car started overheating and it turned out that the whole coolant system was bad. I took it to a mechanic and showed him the warranty but he refused to accept it. When I asked why he told me that they wouldn't honor his prices. He charges $80 a labor hour and they only reimbursed for $40 a labor hour. No mechanic in the world works for $40 an hour. That means that no mechanic would honor my warranty and it was basically worthless.

That was an expensive mistake. When you get a warranty be sure to look at the terms to confirm that they will cover you when you really need them to. It is way too easy to get tricked.

By jonrss — On Aug 14, 2011

Sometimes its great to have a warranty and other times it is a huge pain the neck.

I had an experience a few years ago with one of the big box retailers. I bought a nice new printer from them and took it home only to find out that it didn't work. I don't know what was wrong but it never printed a single page.

Well I figure since they had sold me a product that never once worked I should get my money back. I went back to the store and spoke to their customer service department and they tried to tell me that I broke it myself! That was the start of a huge argument.

First they didn't want to give me anything and then they only wanted to give me store credit. They offered me a 75% refund but I wasn't having that either. After what felt like an hour of arguing and a whole parade of managers that I spoke to they offered to give me a full cash refund. I got what I deserved but what a hassle. You have to fight for whats right and some of those big stores will fight you right back

By whiteplane — On Aug 13, 2011

I have bought a number of new cars in my life and I always opt for the best warranty that they have available. In my experience you end up saving a lot of money and stress over the life of the car.

No matter what kind of car you get, something is going to go wrong eventually. And on top of that a properly maintained car takes lots of regular servicing. Anyone who has had a brake job or an oil change lately knows that these are not cheap. If you have a quality warranty you never have to worry about a big repair bill poking a hole in your budget. And you can rely on the mechanics at the dealership who tend to be a little more skilled that independent mechanics. I think it provides a lot of peace of mind and is completely worth the cost.

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