Hey Buddy, Wanna Buy A Warranty?

Hey Buddy, Wanna Buy A Warranty?

By Stephen E. Smith, Esq.

I went to buy a few fish for my pond the other day, and saw an interesting sign in the window. It read: “Goldfish: Lifetime Guarantee.” When I asked if the fish I was buying were guaranteed, the owner said, “Sure, for as long as they live.” Now, I am a little slow, but the point finally sunk in.

Reading the ads for roof products in recent trade publications, I am getting the distinct feeling that hyping guarantees instead of performance has become a sign of our times.

How the Warranty Game Started

There have always been some high-end roofing manufacturers who invest their time and money into developing better roofing solutions. This market segment has been quietly and steadily increasing the useful life of roofing materials for years, thereby increasing customer expectations for longevity.

In reaction to these raised expectations, some manufacturers have decided that it's a lot cheaper and easier to increase the durations of their limited (very limited) warranties than to actually improve the quality of their roofs.

One manufacturer is offering a 30-year "platinum" limited warranty on about a tenth of an inch of waterproofing rubber (ironic that they'd take their inspiration from the credit card hucksters, isn't it?) Keep in mind that the average single ply roof assembly lasts around ten years.

Another touts a limited warranty where you literally check in a block to select a 10, 12, or 15-year term. (Did you get that? Same roof, different warranty; as though checking a block on a piece of paper is somehow going to extend the life of your roof.)

Finally, my personal favorite, the clever marketer who is promoting a roofing product with a non-prorated, no-dollar-limit limited warranty. (You read that correctly. It's right there in black and white: a no-limit limit.)

What is really going on here? When did the mission become buying the longest limited warranty you can afford? Have customers simply given up on the idea of finding a quality roof system? It's all far too confusing for most of us. But maybe that's the way the bargain-basement commodity roofers like it.

Diverting our attention from actual performance to warranted promises conveniently creates the illusion of a level playing field without the necessity of undertaking costly, performance-driven research and development. If manufacturers can create that illusion, with little or no regard for product and service quality, then we as consumers deserve to be disappointed by the results of our poor decisions.

The key to understanding all of these “new and improved” warranties is exactly the same as it has been since the creation of the modern warranty. Just ask yourself two questions:

• What is actually being warranted?
• How many escape hatches have been cut into the sheets of paper (or platinum, as the case may be)?

It's time for a reality check here. Fact: most warranties are an attempt by product manufacturers to limit their obligations to the customer. Don't be misled: It is the rare manufacturer that issues a warranty in a good-hearted attempt to expand its legal responsibilities to the purchasers of its goods.

A Legal Perspective

Under the Uniform Commercial Code, every manufacturer who places goods for sale in the marketplace must “warrant” that the goods are fit for a particular purpose and suitable for their intended use. If these products fail, then the manufacturer is responsible for all reasonable consequences of the failure.

Think about that. The law is on your side, automatically, whenever a manufacturer's products fail to perform to their intended use. And by law, you are automatically entitled not only to replacement, but to compensation for all reasonable consequences of the failure – unless, of course, you've signed away your rights by agreeing to the terms of an explicitly written warranty.

As my canny fish salesman understood clearly, the Uniform Commercial Code obligation can be circumvented by any manufacturer which, through clear and precise language, chooses to limit its obligations. That's the real intent of most warranties: to place limitations on a manufacturer's obligations.

The Carrot

Since the manufacturer's goal is to limit its obligations to its customers, it has to put something on the bargaining table in return. That is how extended-term warranties came into being. Manufacturers offer to fix or repair a defective product for a certain period of time, to make up for the fact that they will not be responsible for the potentially costly consequences of product failures.

Even assuming that every product offered is equal in its expectations of performance, the customer gains nothing from the bargain. Consider:

• If the product is a good one, there won't be anything to fix.
• If the product is a bad one, the Uniform Commercial Code would have obligated the manufacturer to fix it anyway. And, if you'd only left well enough alone, the manufacturer would also have had to be responsible for any damages resulting from the product's failure.

You got that right. If the roof fails, the customer is better off without the manufacturer's explicit warranty — regardless of the term. The issue isn't how long; the issue has always been how limited.

If we're talking about low-ticket commodities like garden hoses or kitchen appliances, perhaps these extended, albeit, limited warranties make some kind of sense. But we're talking about roofing here, where the consequential damages of failure can rapidly rise to six digits and higher.

The Stick

Let there be no mistake. With the majority of today's roofing warranties, if the roof fails – even if you can prove that the failure is the fault of the material provider – and even if the failure causes lots of costly damage – the consequential costs of damage are yours.

Most roofing warranties expressly state that the manufacturer is not responsible for any consequential or incidental damages resulting from the failure of its product. It's right there in writing – read it. The warranty absolves the manufacturer from fulfilling its common law responsibility for the reasonable consequences of its product's failure.

A Better Way

Why should a building owner allow a roofing manufacturer to limit its obligations when and if the product fails to do what it is supposed to do? Here are three ways to protect yourself.

One approach is to simply reject any warranty offered by a manufacturer. If you reject the manufacturer's explicit warranty, your protection will automatically revert to the Uniform Commercial Code. In which case, as explained previously, the manufacturer will be assumed responsible not just for repairing the leak or replacing the membrane — but for all damages arising from the failure of its product. However, this rejection must be done in advance of purchase. The manufacturer has to be aware that it is selling goods without a warranty. I imagine that most will simply refuse to sell you the project.

Another recourse is to create your own warranty; one that requires a manufacturer to stand fully behind its product, establishing definitive performance criteria that meet your particular application requirements. Warranties are contractual agreements that the law will enforce — provided that you can persuade all parties to agree to the terms of your warranty.

The third approach is the easiest of all. As customers, we need to accept the fact that wishing doesn't make things so. The fish I recently purchased is not going to live forever – and neither is your roof.

As free-market consumers, we have an obligation to identify, examine, evaluate, and compare in order to make knowledgeable purchasing decisions. This is particularly true when spending dollars that are not our own, i.e., corporate or public dollars dedicated to capital improvements such as roofing.

Simply stated: There are good roofs and there are bad roofs. There are properly installed roofs and improperly installed roofs. There are well-maintained roofs and neglected roofs.

Your best chance at success is to find an honorable, financially responsible manufacturer of quality roofing systems that is willing and able to accept full responsibility for all three of these critical areas: materials, installation, and maintenance. That done, the warranty will take care of itself.