What can be done when a product, despite being good, fails before the warranty period?

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warranty period

Before buying any product, people compare the prices, style, durability, etc of the product with the products of other brand. One more important characteristic of the product which people take into consideration before buying is the warranty period. Warranty is a kind of promise made by the seller regarding the durability of the product. It is very important to check this feature and read the terms of the warranty before buying the product.

Types of warranties

There are two types of warranties express and implied warranty.  Express warranty can be classified as spoken/oral and written warranties.

Spoken warranties-

These warranties are the promises made orally by the seller at the time of purchase of the product. The oral promises generally cannot be enforced or the consumer cannot demand the fulfillment of these promises.

Written warranties-

These are the warranties which are in the written form and are included in the terms and conditions of the purchase. People generally purchase the product after making the comparisons of the written warranties only. Generally following are included in written warranty:

  • Period of warranty.
  • Steps which will be taken by the seller if the product fails.
  • The kind of problems in the product are covered under the warranty.
  • Conditions of warranty, for example if the product gets damaged or stops working because of negligence of the consumer then the no repair services or replacement will be provided by the company.
  • Whether it covers the “consequential damage” or not i.e. the loss which occurs due to the problem in the product.

Implied warranties-

Implied warranties are the warranties which are not made by the seller at the time of purchase but these are created by the laws. Sections 14 and 16 of the Sale of Goods Act, 1930, talk about implied warranty. Section 14 states as follows:

“In a contract of sale, unless the circumstances of the contract are such as to show a different intention there is—

(a) an implied condition on the part of the seller that, in the case of a sale, he has a right to sell the goods and that, in the case of an agreement to sell, he will have a right to sell the goods at the time when the property is to pass;

(b) an implied warranty that the buyer shall have and enjoy quiet possession of the goods;

(c) an implied warranty that the goods shall be free from any charge or encumbrance in favour of any third party not declared or known to the buyer before or at the time when the contract is made.”

This implies that there is an implied warrantee for every product and if the seller or buyer wants to exclude implied warranty then they have to expressly mention this.

Section 16 states as follows:

” Implied conditions as to quality or fitness.— Subject to the provisions of this Act and of any other law for the time being in force, there is no implied warranty or condition as to the quality or fitness for any particular purpose of goods supplied under a contract of sale, except as follows:—

(1) Where the buyer, expressly or by implication, makes known to the seller the particular purpose for which the goods are required, so as to show that the buyer relies on the seller’s skill or judgment, and the goods are of a description which it is in the course of the seller’s business to supply (whether he is the manufacturer or producer or not), there is an implied condition that the goods shall be reasonably fit for such purpose: Provided that, in the case of a contract for the sale of a specified article under its patent or other trade name, there is no implied condition as to its fitness for any particular purpose.

(2) Where goods are bought by description from a seller who deals in goods of that description (whether he is the manufacturer or producer or not), there is an implied condition that the goods shall be of merchantable quality: Provided that, if the buyer has examined the goods, there shall be no implied condition as regards defects which such examination ought to have revealed.

(3) An implied warranty or condition as to quality or fitness for a particular purpose may be annexed by the usage of trade.

(4) An express warranty or condition does not negative a warranty or condition implied by this Act unless inconsistent therewith.”

Implied warranties as inferred from Sections 14 and 16 are as follows:

  • Undisturbed possession- Section 14 gives the warranty of undisturbed possession to the buyer of the goods. This means that after the purchase of the product, there is an implied warranty that the buyer will get the quiet possession of the goods.
  • Free from encumbrances- It is also an implied warranty that the product is free from any charge or encumbrance from any third party.
  • Reasonably fit products- The products should be reasonable fit for the purpose for which they have been bought.
  • Merchantable quality- There is an implied warranty that the goods should be of merchantable quality i.e. they are suitable for sale purposes.

Breach of warranty and The Sale of Goods Act, 1930

Section 12 of the Sale of Goods Act, 1930 defines warranty as, “A warranty is a stipulation collateral to the main purpose of the contract, the 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.” Therefore the buyer has no right to repudiate the contract. Further Section 59 of the Act highlights the remedy for breach of warranty. It lays down that in case of breach of warranty, the contract cannot be repudiated but the buyer has following two remedies:

  • buyer can ask for diminiution or extinction of the price;
  • sue the seller for damages of breach of warranty.

In Svenska Handlesbanken v. Indian Charge Chrome[i], it was held that the prayer of plaintiff in the plaint was in accordance with Section 12(3) and Section 59 of the Sale of Goods Act, 1930 as after the breach of warranty, the plaintiff had not repudiated the contract but asked for diminution of price of power plant.

Resolving dispute in case the product fails before warranty period

The steps which can be taken by the consumer in case the product stops working or does not work according to the warranty are as follows:

  • The consumer should read the instructions and conditions regarding warranty first. Many a times, the product stops working because of the breach of conditions of use of the product. So it is better to know if the problem has arisen because of the carelessness of the consumer himself.
  • The consumers can contact the seller if the product is in warranty period and there is no negligence on the part of consumer. If the seller agrees to replace or fix the product then it is the easiest way in which the problem could be solved.
  • Filing case under Consumer Protection Act, 2019 is another way. If the seller does not repair or replace the defective product which is within the warranty period then, consumer can file case under COPRA, 2019. Consumer Protection Act has been formed with the sole purpose to redress the consumer complaints and providing the relief when they face exploitation from the sellers. Following is the three tier system of Consumer Protection Act, 2019, consumers can approach:
  • District Commission for disputes upto Rs. 1 crore in accordance with Section 34 of the Act;
  • State Commission for disputes of Rs.1 crore to 10 crores as per Section 47 of the Act;
  • National Commission for disputes of more than 10 crores according to Section 58 of the Act.

In Indochem Electronic & Anr. v. Addl. Collector of Customs, A.P., a telephone system was sold by the appellants to the respondent which stopped working properly within a  month of its installation. The respondents or buyer demanded for the repair of the system but its poor performance continued even after some requests of repair were attended by the appellants. The State Commission ordered to refund a sum of Rs. 1,87, 559/- with interest @12% to the respondents. The appellants contended in the Supreme Court that the warranty period of 1 year was over so appellants have no obligation to repair or refund. But the SC held that the appellants stated that they would attend to the complaints of respondent even after the expiration of warranty period so this representation has led to the obligation on the part of appellants.

In Jindlal Dealing And Industries v. Indocon Engineers Pvt. Ltd.[ii], the complainant bought a nitrogen generator from the opposite party but the equipment failed to give performance upto the committed level and demanded refund. The opposite party contended that the complainant was not a “consumer” within the definition of Section 2(1)(d) of the COPRA, 1986. Also they are not obligated to provide services to the complainant after the supply and erection of the equipment. National Commission in this case held that there was fault in the product when it was in warranty period so the complainant is a “consumer” under COPRA, 1986 and the opposite party failed to redress the complaints for repair within the warranty period so opposite party was ordered to pay Rs.30, 29, 477.

It is very essential to read the terms of warranty before purchasing the product. Taking action immediately when the product stops working is very important. Generally, repair or replacement of the product is done in case it stops before the expiration of warranty period. A consumer should have the knowledge about the express and implied warranty so that he/she is able to get the justice. When the seller does not pay heed towards the complaint of the consumer then consumer can file case under Consumer Protection Act, 2019.

Edited by Pragash Boopal

Approved & Published – Sakshi Raje

Reference

[i] 1994 SCC (1) 502

[ii] 3 (2006) CPJ 264 NC