Applicability of the Magnuson-Moss Warranty Act to warranties on roof shingles, insulation, exterior siding…

Applicability of the Magnuson-Moss Warranty Act to warranties on roof shingles, insulation, exterior siding, and underground pipe (Released August 13, 1976).

Opi.n'imt Letter

August 6, 1976

Dear Ms. Guyer:

This is in response to your letter to the Commission requesting an advisory opinion on the application of the Magnuson-Moss Warranty Act, 15 U. C. ~2301 et seq. to warranties on roof shingles, insulation exterior siding, and undergTound pipe. Specifically you ask: 1. Whether these products are "consumer products" within the meaning of the Magnuson-Moss Warranty Act. 2. Assuming such products are not consumer products within the meaning of the Act, whether a written warranty directed to the . Not reproduced herein but available for inspection in the Public Refeloence Branch, Room 130 of the FTC Bldg. Washington, D.

ADVISORY OPINIONS 1011

original retail purchase (i. the homeowner) would be covered by the Act.

3. Assuming sueh products are consumer products, whether a written warranty expressly limited to the party purchasing from Johns-Manville (i. a distributor or building contractor) would be covered by the Act.

Section 101 of the Act defines a consumer product as "any tangible personal property which is distributed in commerce and which is normally used for personal, family or household purposes " 15 C. ~2301(1). The products set forth above are used for personal family or household purposes when they are used in connection with a consumer dwelling. The issue remains whether such products are properly classified as personal property or real property. This depends on the nature of the sales transaction entered into by the consumer. The Commission is of the opinion that such products are consumer products when they are purchased "over the counter" (such as from hardware building supply retailers) or when the consumer contracts for the purchase of such materials in connection with the improvement, repair or modification of a home. However, \\There sueh products are at the time of sale integrated into the structure of a dwelling they are not consumer products, as they cannot be practically distinguished from realty. This analysis would also apply where a consumer contracts for the construction of a home or other realty using such products. To answer your second and third questions, the Act only eovers written warranties which satisfy two requirements: 1. the warranted product is a "consumer product" under the Act and 2. the written warranty is "part of the basis of the bargain between a supplier and a buyer for purposes other than resale of such product." 15 U. C. ~2301(6).

If an item is not a consumer product, the first requirement for coverage is not satisfied. Thus the Act would not apply regardless of the party entitled to enforce the warranty.

If an item satisfies the first requirement, the issue is whether the second requirement is met. Distributors and dealers are not "buyers for purpose other than resale." Warranties expressly limited to distributors or dealers would not be a basis of the bargain for the products between a supplier and a consumer, and are therefore not subject to the Act. By direction of the Commission.

88 F.

Supple' Jlzental Letter of Request

September 24, 1975 Dear Secretary:

On June 13 , 1975, Johns-Manville requested an advisory opinion with respect to its proposed course of action under the Consumer Product Warranty Act. On September 10, 1975, not having received a response from you, I wrote you another letter inquiring as to the status of our request. In response to that letter, Larry Kanter of your staff phoned me on September 23 to indicate that the letter could not be found at the FTC.

are herewith re-submitting a copy of that letter and renew our request for an advisory opinion from the Commission.

Sincerely,
Isl Andrea M. Guyer
Attorney

Letter of Request

June 13, 1975 Dear Secretary:

Johns-Manvme Corporation requests advice from the Federal Trade Commission with respect to its proposed course of action under the Consumer Product Warratlty Act. The course of action hereinafter detailed is not currently being followed by Johns-Manville and is not the subject of a pending investigation or other proceedings by the Commission or any other governmental agency. The Consumer Product Warranty Act defines what is meant by the term "consumer product." This definition when taken in the context of legislative history, statements made by governmental officials, and the stated purpose of the Act leaves the application of the Act to certain products in question. Of particular concern to Johns-Manville is the application of the Act to the following residential products.

1. Roof shingles
2. Insulation
3. Exterior siding
(?:.

ADVISORY OPINIONS 1013

4. Underground pipe leading from a street main to house. D nlike home appliances, for example, these products become an integral part of a house in the same manner as do bricks, structural lumber and concrete driveways. A house erected on the land , by definition, is realty not personal property. These products are normally sold to commercial purchasers, such as building contractors. As a result weare of the opinion that these products are not covered by the Act and that we need not comply with the Act with respect to them. We respectfully request an advisory opinion from the Commission on the following questions:

1. Are these products "consumer products" within the meaning of the Consumer Products Warranty Act? 2. If they are not "consumer products" as defined by the Act would they become coveted by the Act if a warranty is directed to the original retail purchaser the homeowner)? 3. If they are "consumer products" as defined by the Act, do the provisions of the Act apply if the warranty is expressly limited to the party purchasing from Johns- Manville (i. a distributor or

building contractor)?
Sincerely,
Isl Andrea M. Guyer
Attorney