Invoking a Warranty
According to the Federal Acquisition Regulation (FAR) 46.7, “the use of a warranty is compulsory is not mandatory”. Nonetheless, if the benefits to be derived from the warranty are proportionate to the warranty cost, the contracting officer can then consider including that factor in the agreement. To determine whether the warranty can be invoked whenever any discrepancy occurs, such as a defect, fraud or gross mistake in the supplied goods or services, the following conditions are provided under FAR section 46.703 (Arnavas & Ruberry, 2001). The contractor has to consider the nature and the utility of the goods or services, the cost of the goods or services, the administration and enforcement, the complexity of identifying defects prior to acceptance, storage period of the product, state of the art and the level of development among other things.
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Whenever there is gross mistake, or fraud of a defect in commodity provided, the warranty can be invoked as per specific conditions. First, if the product fails to perform the intended use. A warranty is invoked whenever the product of the services provided indicate the defects as defined in the FAR section 46.703 with regard to the products and services delivered in the contract. The government may require that the supplier inspects or assesses and then take actions necessary to correct the defect, or replace the product, or any other form of compensation to reimburse in case of a fraud. All these should be done at no additional cost on the materials, labor, and transport expenses or otherwise. The government may also need the contractor or the supplier to provide all the instruction based on the complexity of use, state of art, level of development etc necessary to correct the defect or all accomplishment of the intended use at reasonable cost as long as such action will correct the defect.
The reason for invoking a warranty has to be included in the agreement. As a matter of fact, the main reason why the warranty has to be issued in a government contract is to ensure that the rights and obligations of the contractor and the state are well defined with regard to defective products and services. As such, a warranty helps to foster quality performance on the side of the service and products supplier. A warranty provides a contractual right for the correction of the defects in spite of other requirements of the contract regarding the acceptance of the supplies (Arnavas & Ruberry, 2001). It also gives the period to be covered and the benefits of the warranty.
Express Warranty and Implied Warranty
The use of warranties was popularized by national retailers and the car dealers over the past five decades. They are either offer written or implied warranties to show their customers that their products are reliable. Most of the states require that the manufacturers give warranties for the products or services provided by suppliers. To the least of their ability, they have to offer implied warranty or some sort of guarantee that the said product or service will be in good working condition and offer the expected service or outcome once it is put into use, (Management Concepts Press, 2012).
The consumer law has provisions that clearly describe the requirements for invoking a warranty and when the government can benefit from its invocation. An express warranty is directly concerned with the quality and standards of the supplied products or services provided. A warranty also addresses the stages to engage in order to fix the defect on the goods or services (Feldman, 2012).
The express warranties will provide the government a better chance to claim protection against defective product since the warranty is explicit and if is made voluntarily by the seller and in agreement with the government that the said product or service will perfume as per the specification of the users expectation (Feldman, 2012). The express warranty additionally clearly spells out the particular correctional actions to be undertaken in case the product is defective or the product does not meet the expected outcome. The express warranties are mostly written and hence more binding as opposed to the implied warranties which are unspoken and unwritten promises that the seller makes to the government when selling their products. However, implied warranty is covered under common law under the doctrine of fair value for money (Feldman, 2012). These specifications are outlined under Uniform commercial code (UCC). UCC section 2-314 is law in each state in US except Louisiana.
The government can invoke the express warranty as long as it is able to fulfill the burden of proof to show that the defect of the product is as a result of poor workmanship, defective raw materials, or by any other means prove that the problem was due to manufacturer’s failure to offer quality, (Federal Acquisition Regulations, 2003). Once this is accomplished, the burden is shifted to the supplier or manufacturer to show that either the defect was not his/her responsibility of there are in fact no said defect to the product. In case breach of warranty is proven, the contractor of supplier has to compensate the government. If the express warranty is not honored, the defect is still covered under implied warranty. Thus the government is protected by the law when an express warranty is in place.
Arnavas, D., & Ruberry, W.J. (2001). Government Contract Guidebook. Washington DC: Federal Publications.
Federal Acquisition Regulations. (2003). Subpart 46.7 – Warranties. Web.
Feldman, S. W. (2012). Government Contract Guidebook 2011 – 2012 (4th Ed.). Eagan, MN: Westlaw.
Management Concepts Press. (2012). Federal Acquisition Regulation, eBook Version. 2012. Tysons Corner, VA: Management Concepts Press.