Lifetime guarantees for aluminum siding

No. 100. Lifetime guarantees for aluminum siding. A se11er of aluminum siding recently requested the Commission to render an advisory opinion concerning the legality of its proposed 'LIse of a 'I Lifetime Gual'antee" for aluminum siding. The proposed guarantee would represent that the siding wi1 not rust, peel , blister , flake , chip or split under conditions of normal weathering for the lifetime of the original owner. If, after inspection, the se11er determines that a claim is valid under the guarantee the se11er wi1 within three years after insta11ation furnish all materials and labor necessary to repair 0:1' replace af the se11er s option , a11 sid jng at no cost to the owner. For the next seven years, the se11er wi11 furnish a11 materials and labor at a eost to the owner of 8 % of the then current priec for each year or part thereof after the third year. For the next ten years, the seHer wi1 furnish aH materials and labor at a cost to the owner of an additional 3 jt of the then current price for each year or part thereof after the tenth year. Thereafter, the sel1er wi1l furnish only the material necessary to repair or replace , at the seHer s option, at a cost to the seHer of 10;0 of the then cur- ADVISORY OPINION DIGEST 1883 rent price. The owner must assume aJJ other costs, including 90% of the cost of materials and 100;10 of the cost of labor. In addition, the seJJer furnished the results of extensive laboratory and field testing of house siding since 1948 under every type of environment which would lead to the conclusion that no aluminum siding, no matter what its finish, wil last for a lifetime. In fact, the evidence submitted , if accepted as true would establish that the maximum life expectancy of sueh siding under normal conditions wouJd come closer to twenty years and would be considerably less under more extreme circumstances. This is based upon experience indicating that even if does not rust, peeJ , blister, flake, chip or split, the finish wil weather to such an extent as to require repainting within that time.

The Commission made it plain that it has not conducted its own investigation in order to verify the accuraey of this evidence and that the comments set forth in its opinion were based upon the facts as presented and upon the assumption that those facts were correct. On this basis , the Commission advised that it would not be legal for the seJJer to employ a guarantee to represent that the siding wil last for a lifetime 01' for any other period beyond what ean reasonably be expected. The opinion pointed out that both the trade practice rules for the Residential Aluminum Siding Industry and the Commission s Guides Against Deceptive Advertising of Guarantees contain the principle that a guarantee shaJJ not be used which exaggerates the life expectancy of a product. In such a case, the guarantee itself constitutes a misrepresentation of fact even though a11 required disclosures of material terms and conditions might be made in an advertising of the guarantee. This simply recognizes the principle that a guarantee can be used as a representation of an existing fact as well as a guarantee. Viewed in this light, use of this guarantee would constitute an affrmative representation that the siding win last for the lifetime of the owner when the evidence furnished would indicate this is not true. The gravamen of the offense would be the affrmative misrepresentation of the life expectancy of the product and this could not be corrected by a mere disclosure that what is represented to be a fact is not actua11y true. Of equal importance in the Commission s view was the fact that the seller here proposed to couple two basica11y inconsistent provisions in the same guarantee. One was the use of the lifetime representation and the other was the prorated feature. The Commission stated its opinion to be that it is conceptua11y im- 1884 FEDERAL TRADE COMMISSIO" DECISIONS

possible to combine the two in the same guarantee when the proration period virtua11y terminates at the end of twenty years. A guarantee cannot be for a lifetime if it terminates after twenty years. Undoubtedly, many owners wi1 live far beyond that period of time and so the guarantee cannot help but confuse even though a careful reading of its terms might show that it states a11 relevant facts and even though a11 advertisements make the required disclosures.

Litera11y speaking, some benefit may be claimed for the remainder of the owner s life after the expiration of the twenty year period , for the se11er wi11 sti11 assume 10 % of the eost of materials. But this would appear to be more a matter of form than substance. The owner would be given a mere pittance in order to furnish some color of j ustifieation for the claim that the guarantee is for a lifetime. The situation is that the owner must pay more than 907" of a11 costs in order to receive the benefit of the remaining 10 % of the cost of materials, which does not leave him with anything of substantial value to justify the representation of lifetime warranty. In the Commission view, the purchaser must be afforded something of substantial value for his lifetime in order to support the representation and the Commission did not feel that less than 10 % of all costs was of substantial value.

Finally, the Commission noted that the proposed guarantee excludes damages resulting from normal weathering of surfaces. In view of the fact that this appears to be the most prevalent cause for repainting aluminum siding, the Commission also advised that this is a material term or condition which not only should be set forth in the guarantee, for whatever period of time it runs , but also should be elearly and conspicuously set forth in all advertising which mentions the guarantee. (Fi1e !'o. 6737014 , released ::ov. 9, 1966.