Opinion ID: 1826077
Heading Depth: 2
Heading Rank: 2

Heading: Magnuson-Moss Act

Text: The Magnuson-Moss Act was enacted for three basic purposes: [i]n order to improve the adequacy of information available to consumers, prevent deception, and improve competition in the marketing of consumer products. 15 U.S.C. § 2302(a). This section of the Magnuson-Moss Act consequently requires that a warrantor who provides a warranty shall, to the extent required by the rules of the [Federal Trade] Commission, fully and conspicuously disclose in simple and readily understood language the terms and conditions of such warranty. Id. This language establishes that a warrantor need not disclose every conceivable term or condition of the warranty, but only those that the rules of the Federal Trade Commission (the FTC) require it to make known. The Magnuson-Moss Act delegated to the FTC the authority to require warrantors to include various terms and conditions within written warranties. To that end, Congress suggested in the Magnuson-Moss Act various terms the FTC might choose to require. Among the 13 suggested terms or conditions, Congress recommended that the FTC require warrantors to disclose [i]nformation respecting the availability of any informal dispute settlement procedure offered by the warrantor. 15 U.S.C. § 2302(a)(8). The FTC obliged Congress by including within its rules and regulations a provision requiring that warrantors clearly and conspicuously disclose in a single document ... [i]nformation respecting the availability of any informal dispute settlement mechanism elected by the warrantor. 16 C.F.R. § 701.3(a)(6). (Emphasis added.) Section 701.3(a) is colloquially referred to as the single-document rule because of its requirement that certain information be disclosed within a single document, i.e., the written warranty. Besides recommending that the FTC require warrantors to disclose the availability of any informal dispute settlement procedure, 15 U.S.C. § 2302(a)(8), Congress also charged the FTC with prescribing rules for such a procedure. 15 U.S.C. § 2310(a). An informal dispute-settlement procedure, or as Congress chose alternatively to designate it at one point (15 U.S.C. § 2310(a)(1)) and as the FTC likewise chose to characterize it, an informal dispute-settlement mechanism, [1] would serve as a means by which customers dissatisfied with the warrantor's performance of its obligations could seek redress, yet it would spare a warrantor the burden of immediately litigating a dispute concerning its performance of warranty obligations. Congress explicitly stated that if a warrantor establishes a conforming informal dispute-settlement mechanism, the consumer may not commence a civil action ... unless he initially resorts to such procedure. 15 U.S.C. § 2310(a)(3). (Emphasis added.) Congress's use of the word unless demonstrates that a consumer may nevertheless pursue an action after resorting to the dispute-settlement mechanism; thus, the outcome of the mechanism is nonbinding in character.