Uniform Warranty and Warranty Service System

No. 414. Uniform Warranty and Warranty Service System. The Commission rendered an advisory opinion concerning a “Zip” Warranty and Warranty Service System to be offered farm and industrial machinery manufacturers for use in connection with sales of their equipment.

Under the proposed plan an equipment manufacturer, in warranting his merchandise, would supply (1) a geographically convenient replacement parts depot from which repair and replacements parts would be readily available to dealers and users; (2) a central means for receiving and handling equipment deficiency reports and complaints; (3) an incentive award program for employee-assemblers of individual troublefree equipment; (4) a comprehensive, uniform warranty on all equipment; (5) a cash award program for employeeassemblers based on annual sales of troublefree equipment. The heart of the seventeen (17) page warranty and service plan is a series of cash and other awards intended to encourage purchasers to report equipment deficiencies and to encourage service personnel to strive towards the goal of zero defects.

The Commission advised that use by farm and industrial equipment manufacturers of the submitted warranty plan would be unob- ADVISORY OPINION DIGESTS 1707 jectionable except for the possible adoption by competitors of a warranty common to both. The Commission was of the view that it would be preferable for any participating supplier to establish the terms and conditions of his own warranty program without reference to the terms and conditions of a competitor's warranty program. (File No. 703 7076, released April 13, 1970.)