[US] VPS Provider's Guide to Federal Warranty Law (Magnuson-Moss Warranty Act)

Discussion in 'Operating a Hosting Business' started by DomainBop, Aug 11, 2014.

  1. DomainBop

    DomainBop Dormant VPSB Pathogen

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    Just throwing these helpful links out there in case any VPS provider gets the bright idea of guaranteeing their services with a "warranty" so they can familiarize themselves with all the provisions of the Magnuson-Moss Warranty Act :)

    A Businessperson's Guide to Federal Warranty Law: http://www.business.ftc.gov/documents/bus01-businesspersons-guide-federal-warranty-law

    Full text of the law: http://www.law.cornell.edu/uscode/text/15/chapter-50

    the tl;dr summary for those of you who like everything on one 1 page and hate pages even more than you hate paragraphs: http://en.wikipedia.org/wiki/Magnuson%E2%80%93Moss_Warranty_Act

    tl;dr of this post: "Warranty" isn't just a word you can throw into a press release for marketing purposes. Its use comes with a whole set of legal obligations.
     
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  2. concerto49

    concerto49 New Member Verified Provider

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    Virtual goods has a warranty? That's awesome. Don't see how it works.
     
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  3. drmike

    drmike 100% Tier-1 Gogent

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    Well educational:

    "Warrantors cannot require that only branded parts be used with the product in order to retain the warranty. This is commonly referred to as the "tie-in sales" provisions, and is frequently mentioned in the context of third-party computer parts, such as memory and hard drives."

    I still see companies pulling this.  Just had a vendor stirring the warranty pot for using non same brand components (disk and RAID).

    So explain to me, in your opinion how many of these X days refund policies in hosting world might run afould of the Warranty Act?

    Warranty has NEVER been a reason to issue a press release.  It is always part of a bigger bundle of legalese just to be compliant.
     
  4. DomainBop

    DomainBop Dormant VPSB Pathogen

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    Go check the WHT announcements section. :p

    Virtual goods would probably be covered under the warranty law but the US law doesn't apply to services so it would be up to the court to decide if that dedicated server is a virtual good or a service. Adding a "warranty" to a contract is one of those times when you really need to cover your butt by picking the phone and calling your lawyers so they can look over your policy.

    Just about every sale to a consumer though is covered by an implied warranty of merchantability (if the ad says xyz then you need to deliver xyz not abc)
     
  5. drmike

    drmike 100% Tier-1 Gogent

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    Web hosting will meet the legal definition of a service and do so referencing the real estate case law covering leasing/renters almost certainly.  Rental of a home or apartment long ago (1950-1970 depending on locality) was said to be a contract for a basket of services (the physical space along with accessory facilities for services - water, sewage, electric, trash, etc.).  Prior to then common law was applied to renters and renters had little, if any rights even if the roof was raining on them, no hot water and varmint infestation.

    Some stupid 16 year old throwing around dictionary words, Black's Law Dictionary words, randomly and without regard, yeah.  Someone should take the incorporator, the adult to task for such.

    I read that announcement and I want to vomit in his shoes.
     
    DomainBop likes this.
  6. DomainBop

    DomainBop Dormant VPSB Pathogen

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    If the host can convince the court that it's a service (which they shouldn't have any problem doing unless it was RTO, etc) then the warranty act wouldn't apply but there are plenty of other laws someone could use to rip some of those "no refund" polcies to shreds...especially when a host is using their "no refund" policy to essentially rip off consumers by not delivering the service that was promised.
     
  7. William

    William pr0 Verified Provider

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    Again funny and strange US laws.... not surprised.