Tuesday, July 30, 2013

Lifetime Warranty

By Mike Dorf

I recently purchased a $7 cell-phone charger to plug into the cigarette outlet of my car.  The packaging boasted that it came with a "lifetime warranty."  I wondered to myself what that might mean.  Here was a phrase I had seen numerous times before but upon reflection I couldn't come up with a meaning that made any sense.

A longstanding regulation promulgated by the Federal Trade Commission provides the following helpful guidance:
If an advertisement uses “lifetime,” “life,” or similar representations to describe the duration of a warranty or guarantee, then the advertisement should disclose, with such clarity and prominence as will be noticed and understood by prospective purchasers, the life to which the representation refers.
But what if the advertisement or product packaging does not specify the life that the warranty references?  Let's consider a few possibilities:

(1) The product is guaranteed for the lifetime of the purchaser.  That's absurd.  Why should the duration of the guarantee depend on how much longer the purchaser lives?  Should I give the charger as a gift to one of my daughters and then ask her to loan it to me to use during my lifetime, on the theory that then the warranty will last longer?  Preposterous.

(2) The product is guaranteed for its own lifetime.  That's even more absurd.  If the product breaks immediately, then it's dead, and so it's lifetime is over, and so the manufacturer is not in breach of the warranty.  And yet despite that absurdity, I've been told by someone more knowledgeable than I am about contracts law that some courts have interpreted "lifetime warranty" to mean just that, at least in other contexts.

(3) The product is guaranteed for the lifetime of some other product with which it is sold or intended to be used.  This seems like the natural meaning if, say, the tires on a new car come with their own separate "lifetime warranty."  Presumably the warranty is good so long as the rest of the car works.  The FTC reg I quoted above comes with two illustrations both involving such examples: a muffler sold with a car and a battery sold with a car.  In those illustrations the advertisements specify that the car's lifetime provides the measuring rod, but I suppose one might infer that even in the absence of such specifications, a "lifetime warranty" for a part of a car is guaranteed for the life of the car.

But how would that principle apply to a car-charger for a cell phone?  One end plugs into a car and the other end plugs into a cell phone.  Is the charger guaranteed for the life of the cell phone or the life of the car?  And really, why would the guarantee be linked to any particular car or particular cellphone when the charger is sold separately?

(4) The product is guaranteed for the expected lifetime of the product.  This begins to make a little bit of sense and it is the meaning ascribed to the phrase by a website I found, but the sparse case law I discovered by tooling around in the state case database did not generally adhere to this definition--and for good reason.  What is the "expected lifetime" of the product?  Doesn't that depend on how well made the product is?  What if the product is a piece of junk, so that its expected lifetime is substantially shorter than the expected lifetime of comparable products manufactured by leading competitors?  I suppose if I were a judge writing on a clean slate, I would hold that reasonable consumers treat "lifetime warranty" as itself a signal of quality, so that "lifetime warranty" means that the product is warranted for the reasonable expected lifetime of a well-made or at least average product of its class.

(5) The website linked above also noted that while "reasonable expected lifetime" is the most common meaning, there is no generally accepted meaning of "lifetime warranty."  But it turns out that doesn't really matter because in nearly all of the reported cases I looked at, contractual language gave more specific meaning to the term anyway.  And that was true of my charger too--well, kind of.  The charger came packaged in one of those hard plastic shells that can only be opened with a knife scissors and so I had no way of knowing what "lifetime warranty" meant before purchase.  The outside of the package referred to the manufacturer's website for "further details" but I later looked on the website and the term wasn't defined there either, so even if I had wanted to look up the meaning of lifetime warranty before purchasing--presumably on my mobile phone while standing in the store, if I had a charged mobile phone, which I didn't, which is why I was buying the charger, but I digress--I couldn't have.  However, once I got the charger home and cut through the packaging, I found a paper insert which included language spelling out the terms of my warranty.

What were those terms?  Well, first of all, the insert described the warranty as a "limited lifetime warranty" even though the word "limited" did not appear on the outside packaging.  Then, it said that the manufacturer would repair or replace the product if it proved defective, so long as it was not damaged by being mishandled or misused.  It has been over a quarter century since I took contracts in law school but I remember enough to realize this much: the limited lifetime warranty that the manufacturer appeared to give me no more than the implied warranty of merchantability that accompanies products even absent any express warranty.

To my great surprise, however, the insert did not disclaim all consequential damages.  It provided that if the charger is defective in a way that results in damage to my phone, the charger manufacturer will repair or replace my cell phone too.  Now maybe that's also the default rule in most jurisdictions.  After all, damage to the cellphone from a defective cellphone charger is the sort of foreseeable consequential damage that the rule of Hadley v. Baxendale makes recoverable.  The charger manufacturer is not offering to pay all consequential damages.  E.g., if the charger fries my phone and as a consequence I miss a call from a Hollywood director offering to cast me in the next Star Wars movie, with the result that someone else gets the part, the maker of the charger isn't going to pay me for the royalties I would have earned.  But still, I would have imagined that the charger manufacturer would try to disclaim all liability for consequential damages.  What it offered instead was a pretty good deal.  So far as I could tell from the packaging, the deal was good in another way too: the insert contained no choice-of-law clause specifying some particular jurisdiction's law as governing any disputes; it contained no arbitration clause or any clause waiving the right of the purchaser to join a class action either.

The bottom line is that the manufacturer of a product probably could mislead customers with the promise of a generous-sounding "lifetime warranty",  only to provide less than the default rule in the fine print.  The manufacturer of the particular item I bought didn't do that, which is at least a little surprising and made me feel good about my purchase.  What's more, I've now had the charger for nearly a week and it hasn't broken yet.  On the downside, I haven't heard a peep from George Lucas or JJ Abrams.


Rounds said...

What about ownership lifetime - however long the original owner (or recipient if given as a new gift) owns the product? - if sold or given away after a period of use then the warranty would lapse.

JoelKatz said...

You missed what I think is the most common meaning, at least in the computer industry -- the expected lifetime of the product in the market. A product is still within its expected lifetime if there's still a consumer market for comparable products.

Andareed said...

Computer memory (RAM) is often sold with a lifetime warranty or guarantee. In practice it means that if it stops working, it's covered under warranty. I personally had some RAM go bad and the manufacturer mailed me a check for the original cost because they didn't make it any more.

Jonathan said...

My assumption is that a lifetime warranty is for the lifetime of the universe, so long as you have a receipt and the company still exists.

Red Sphynx said...

I thought it was twice the radioactive half-life of the purchase.

Lionel Hutz said...


I think your assumption might be more appropriate if a company says the product is guaranteed "forever," rather than for a "lifetime." (See, e.g., http://www.cutco.com/customer/guarantee.jsp)

Aaron Eidinger said...

What about the lifetime of the person/company who created/built the product? I kept waiting to see this in the list and didn't.

jmass said...

I always thought it was referring to the Lifetime TV network.

Bryan Steffler said...

In my opinion lifetime should mean 25 years.

Janice said...

Extended warranty has so many benefits as it saves your repair and maintenance cost which may occur in the future and the best time to purchase extended warranty is when your company warranty is going to expire.

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