Warranty Period Of Consumer Product And Services Amidst Covid-19

While most of the consumer goods come with a warranty period ranging between 6 months to even 10 years, or at times even more. The glad tidings is, most of the Automobile and manufacturing companies as a gesture of goodwill, have drawn-out their support to their customers, by extending the warranty and service period of those products which expired during the lockdown, by further extending it for an additional 30 to 90 days starting from the date of the lockdown. In such consequence, the unfortunate consumer yet again becomes fortunate. But, the issue arises only when the manufacturer or retailer, post lockdown repudiates to provide any kind of warranty and services to the consumers, whose warranty/service contract already lapsed during the period of lockdown. In that case, will such amount to unfair trade practice?

Theory of Warranty

Warranty as for a common man, under the knowledge a dictionary would mean, "A written promise from a company to repair or replace a product that develops a fault within a particular period of time, or to do a piece of work again if it is not satisfactory"

The Sale of Goods Act, 1930, under section 12 (3), defines warranty as 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.

Besides, section 12 (4) of the said Act, prominently defines that, whether a stipulation in a contract of sale is a condition or a warranty depends in each case on the construction of the contract. A stipulation may be a condition, though called a warranty in the contract. Section 12 of the Sale of Goods Act, 1930 is stated as follows:

12. Condition and warranty.—(1) A stipulation in a contract of sale with reference to goods which are the subject thereof may be a condition or a warranty.

(2) A condition is a stipulation essential to the main purpose of the contract, the breach of which gives rise to a right to treat the contract as repudiated.

(3) 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.

(4) Whether a stipulation in a contract of sale is a condition or a warranty depends in each case on the construction of the contract. A stipulation may be a condition, though called a warranty in the contract.

Whether it is Unfair Trade Practice on part of the manufacturer or retailer?

The Consumer Protection Act, 2019 under section 47 describes Unfair Trade Practice as "a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, adopts any unfair method or unfair or deceptive practice".

Further, sub section (h) of sec 47 of the said Act enumerates, where under the trade practice a representation to the public is made, which purports to be - (A) A warranty or guarantee of a product or of any goods or services; or (B) a promise to replace, maintain or repair an article or any part thereof or to repeat or continue a service until it has achieved a specified result, if such purported warranty or guarantee or promise is materially misleading or if there is no reasonable prospect that such warranty, guarantee or promise will be carried out.

The Consumer protection Act, 2019, additionally does not provide any exceptions to the above discussed provision. Thus, u/sec 47 (h) of the above Act, it could be said that a manufacturer or retailer after having made a promise to the consumer, that under the warranty of the product sold, the consumer is eligible for a replacement, repair or maintenance and further while the circumstances arises to be so, does not prospect to fulfil such promise. Such would amount to Unfair Trade Practice.

Remedies available for the Consumers

Both the Sale of Goods Act, 1930 and Consumers Protection Act, 2019 provides adequate remedies to the consumers. One of the foremost objective and purpose of the Consumer Protection Bill, 1986 was to protect the consumer against unfair trade practices and their right to seek redressal against any unfair trade practices or unscrupulous exploitation. Both of which has been implemented as under "Consumer Rights" in section 9 (ii) and section 9 (v) of the Consumers Protection Act, 2019. The amended Consumer protection Act of 2019 further makes it easier for consumer to file their complaints vide electronic filing under the proviso to sub-section (1) of section 35 of the Act.

On the other hand, The Sale of Goods Act, 1930, under section 59, provides remedy for breach of warranty to the buyers. The said section 59 states as follows:

59. Remedy for breach of warranty.—(1) Where there is a breach of warranty by file seller, or where the buyer elects or is compelled to treat any breach of a condition on the part of the seller as a breach of warranty, the buyer is not by reason only of such breach of warranty entitled to reject the goods; but he may—

(a) set up against the seller the breach of warranty in diminution or extinction of the price; or

(b) sue the seller for damages for breach of warranty.

(2) The fact that a buyer has set up a breach of warranty in diminution or extinction of the price does not prevent him from suing for the same breach of warranty if he has suffered further damage.

Conclusion

While the outbreak of the pandemic was much unanticipated and the existing laws although well laid-out, are not adaptive enough to deal with the present state of affairs. It is plausible that, although none of the parties are at fault for the present situation. It is significant for the commissions or the higher courts to examine, that the manufacturer or retailer shall not take advantage of the lockdown period for their unfair business gains or trade practices. In such case the buyers or consumers shall have their rights vested under the law to approach the Commission with their complaints against the seller, and is most likely to get a relief in their favour. Likewise, a blanket order from the Supreme Court or the High Courts would also make things at ease for the consumers, and such is to be seen in the near future.

Views Are Personal Only.

References

1. The Sale of Goods Act, 1930
2. The Consumers Protection Act, 2019
3. https://dictionary.cambridge.org
4. https://www.business-standard.com/article/technology/electronics-phone-makers-extend-warranty-period-amid-coronavirus-lockdown-120040300628_1.html