What goes into the nitty gritties of a warranty?

By Jane Wachira

Recently a friend and I were shopping for a fridge at one of the big supermarket outlets in town, we could not help but notice the variance in different warranty years by various fridge producing electronics companies. As the salesman explained the prices behind each fridge mostly attributed to their features, the warranty given by the parent company was also a selling point. This got me thinking, what really goes into ascertaining the period/length of a warranty cover, why would one fridge give a 10-year warranty cover while another gives two? Where do you go after the manufacturer or store from where you bought your goods from refuses to execute a warranty?

A warranty, simply, refers to a written guarantee, issued to the purchaser of an item by its manufacturer, promising to repair or replace it if necessary, within a specified period of time. According to section 2 of the Sales of Goods Act CAP 31, a warranty means an agreement with reference to goods which are the subject of a contract of sale, but collateral to the main purpose of the contract of sale, breach of which gives rise to a claim for damages, but not to a right to reject the goods and treat the contract as repudiated.

Warranties maybe express or implied; express warranties are specific promises made by the seller and include oral representations, written representations, and descriptions of the goods or services, representations in samples and models, and proof of prior quality of the goods or services. Puffing, or the seller’s exaggerated opinion of quality, does not constitute a warranty. For example, if a car salesperson says, “This car will last you a lifetime,” a court is likely to consider such a statement puffing and not an express warranty.

Implied warranties are warranties that courts assume are implied in sales made by merchants. All sales contracts made by merchants contain an implied warranty of merchantability. This is a promise that the goods, as they are described in the contract, pass without objection in the merchant’s trade, are fit for the ordinary purpose for which they are normally used, are adequately contained, packaged, and labeled, and conform to any promises or affirmations of fact made on the container or label.

In Kenya, laws that reflect administration of warranties include the Law of Contract, the Sales of Goods Act, the Consumer Protection Act while bodies regulating implementation of warranties include the Communications Commission of Kenya and the Kenya Bureau of Standards (KEBS).

As defined in Section 3 (1) of Sales of Goods Act, A Contract of sale of goods is one whereby the seller transfers or agrees to transfer the property in goods to the buyer for a money consideration, called the price.  From such a contract arise obligations to both the seller and the buyer (also known as the consumer). The terms of such a contract include warranties, and conditions. It is the duty of the seller to sell goods that are of merchantable quality, the buyer also has a duty, with regard to warranties, to ensure he/she retains warranty documentation and that warranty cards are returned within the stipulated period.

The Consumer Protection Act (CPA) provides for punishment of businesses that knowingly sell sub-standard goods and lie on pricing. It also provides for warranties for damaged or injurious goods. Kenya’s CPA also requires regulators to involve consumers when making major decisions about services and products.

Kenya Bureau of Standards (KEBS) is mandated to facilitate consumer protection through handling of consumer complaints. In 2010, a consumer, Ken, bought a Nokia phone from a store at the renown Luthuli Avenue in Nairobi CBD, after two days of purchase he realized the phone’s camera was not working, the phone had a one year warranty cover. On taking it back to the store, the seller declined liability claiming that the warranty did not cover software malfunctions. Being an informed citizen, he reported the matter to the KEBS who asked him to leave the phone with them so they would assess its condition. After a week, KEBS officials accompanied by a police officer paid a visit to the store. The sellers upon being confronted by KEBS officials offered to have the phone repaired, but KEBS instructed that they issue him with a new phone.

The Communications Commission of Kenya too has its own consumer affairs division mandated to handle complaints related to consumer welfare, rights and protection.

International Best practices

In 2011, Australia enacted a new law; Australian Consumer Law (ACL). Of great significance is its provision that customers may still have a right to return defective goods even if the manufacturer’s warranty period has expired. Like Kenya’s legal provisions, ACL’s section 54 requires that goods be fit for the purposes they are commonly used for, acceptable in appearance and finish, free from defects, safe and durable, all according to the standards of a “reasonable consumer”.

Guarantee period

Sometimes manufacturer’s warranties are only for three, six or 12 months in total, whereas the retailer’s guarantee under the consumer guarantees can sometimes extend beyond that, having regard to the nature of the product and its intended use. In determining what is an appropriate period for a guarantee to apply, the law forces courts to consider the nature of the goods, the price of the goods, and statements made about the goods either on the packaging or by the supplier or manufacturer.

That means a consumer can expect a longer legal guarantee to apply for goods that generally last a long time, are relatively expensive, and where any claims are made about the quality and/or durability of the product by either the salesperson or manufacturer. For example, if consumers generally buy a television with a reasonable expectation for it to last five years, then they may have a statutory guarantee against the retailer that lasts substantially longer than the one-year manufacturer’s warranty. If the TV is a more expensive brand, especially one that makes claims about its quality and durability, it will be held to a higher standard of quality and durability under the ACL than a home brand that is half the price and does not make similar claims.

The UK Sales of Goods Act (which Kenya has heavily borrowed from) states that your goods must be fit for purpose; they must be as described, must be of satisfactory quality, sufficiently durable, and free from any defects. A consumer also has a responsibility regarding handling, care and maintenance of the goods, disregarding the manufacturers’ recommendations weakens a consumer’s case. But if it is well cared for and maintained then for the first four-five weeks a consumer has a right of rejection and can demand a refund. For the next six months one is entitled to a replacement or repair of the goods. It is up to the retailer to prove there was nothing wrong with the item. And then after six months, there is still a duty to replace or repair faulty goods, but the onus is on the consumer to prove that there was something wrong. The key time is six years, that is how long goods may be covered by the Sale of Goods Act UK; and it all depends on what “sufficiently durable means.”

The UK government’s guidelines assert that: “Goods are of satisfactory quality if they reach the standard that a reasonable person would regard as satisfactory, taking into account the price and any description.” The million-dollar question in law, however, has always been what is meant by the term “reasonable”? Who is a reasonable man or what is a reasonable time period?

There is a war being fought between consumers and many of the firms they have to deal with. It is an asymmetric conflict – the little man versus the faceless, bad customer service monoliths. On the little man’s side there are only newspaper consumer pages and a rather handy selection of laws. Most of the consumer rights are infringed upon because the consumer is not aware of the law e.g. how many Kenyans are aware that they can seek the assistance of KEBS or the Communications Authority of Kenya (Consumer Affairs division) to have their warranties executed?

It is important for both buyers and sellers to adhere to their obligations under a contract of sale; for sellers- that goods are of merchantable quality (are fit for purpose) and for buyers (consumers) to ensure they handle goods in the recommended manner by the manufacturer. There’s also a need to harmonize Kenyan legal provisions with international best practice such as Australia’s law whereby a warranty extends even after the guarantee period has lapsed where the durability of the goods allows them. Most importantly, there’s need to create consumer awareness, pertaining to breach of warranty and the role of KEBS and other stakeholders in consumer welfare.