Manufacturing & Distribution Client Alert - October 2016

MANUFACTURERS MAY NOW OFFER CONSUMER PRODUCT WARRANTIES DIGITALLY
By Steve Story

The E-Warranty Act of 2015 amends the Magnuson-Moss Warranty-Federal Trade Commission Improvement Act, to provide manufacturers and sellers of consumer products the option to post written warranties online, rather than on the product or accompanying printed material as is required under the current law. In passing this amendment, Congress explicitly noted that the electronic warranty option would provide additional flexibility to manufacturers in terms of complying with labeling and warranty requirements.

While there are no requirements that manufacturers or sellers of consumer products provide written warranties for their products, if they choose to do so, the Magnuson-Moss Warranty Act and implementing regulations promulgated by the Federal Trade Commission (FTC) require sellers and manufacturers of products costing more than $15 at retail to disclose the full text of the warranty terms to consumers and to make those terms available to consumers prior to sale. Many companies currently print their complete warranty terms on the outside of product packaging, or include the terms on product manuals or on inserts placed inside the packaging.

Under the E-Warranty Act, companies are now permitted to set up a website link that will electronically display the complete written warranty terms clearly and conspicuously and to print the website address for the warranty information on product packaging, on the product itself, in product manuals, or on package inserts. In addition to this website link, the manufacturer will be required to provide information on how consumers can obtain and review the warranty terms (such as by instructing consumers to visit the website link for complete warranty terms), and to print one of the following pieces of information to allow consumers without internet access to obtain the warranty information: the phone number of the manufacturer, the postal mailing address of the manufacturer, or other reasonable non-internet based means of contacting the manufacturer to obtain and review the warranty terms.

The E-Warranty Act does not change the requirement for pre-sale disclosure of warranty terms in physical retail locations, in catalogs, or through door-to-door sales (i.e., FTCs Pre-Sale Availability Rule). That is, manufacturers must still provide a means for retail sellers to provide pre-sale disclosure of the full text of written warranties through electronic or other means at the retail location (or in a print catalog) even if the new option for a printed website link on the package or product is utilized under the new law. The Pre-Sale Availability Rule requires that retail sellers make warranties readily available to prospective buyers, but it does not specify the methods that must be used. Retail sellers may display warranties in close proximity to the products, may provide hard copy versions of the warranty terms upon request, or use kiosks, mobile devices, or other electronic means to allow consumers to access the warranty terms.


SOFTWARE SYSTEM ACQUISITION CHECKLIST
By Bob Smartschan

Replacement of a business software system can constitute a major investment of both dollars and management time and entails the risk of disruption of ongoing processes facilitated by the software it if is not done well and on schedule. For these reasons, advance planning is a "must" for any significant software upgrade. The following checklist is a summary of some of the more important advance planning points that should guide any software acquisition.

  1. If your internal IT resources/personnel are not sufficient, engage a software consultant to help guide you in the acquisition. The right consultant can be invaluable to help ensure both that the software system you are buying is what you need, and that it is installed, integrated and implemented properly.
  2. Determine what you need the software system to do and how well you need it to do it (speed, accuracy, guaranteed uptime, etc.) and from this develop specific requirements based on functionality and performance. These should be the basis for the "specifications" the software vendor will agree to meet.
  3. Assess the environment in which the software system will have to perform, including interfaces to existing equipment and other software and databases you use, and any new equipment needed to optimize performance of the new software. These things will end up being your responsibility rather than the software vendor's, unless you hire the vendor to take care of certain of them. So identifying environmental issues in advance will enable you to work with the software vendor to make everything work together properly.
  4. Identify your specific security and control requirements in order to assure that the software you are buying will meet them, or can be readily modified or augmented to meet them.
  5. Focus on scheduling as early as possible in the process, in order to be sure the software system vendor can meet your timing requirements. It is important to keep scheduling realistic to avoid surprises. There will always be hiccups and delays in any but the simplest software replacement. Realistic scheduling will help moderate their impact.
  6. Determine early on what types and stages of testing you will put the new system through before accepting it, and work out with the new software vendor the schedule and procedures for testing and acceptance.
  7. Plan for essential training by identifying what will be required and which of your personnel will be trained as operators of the software or to provide internal training to other users of the software.
  8. Be sure to focus on the ongoing maintenance to be provided by the software vendor, to be sure it provides what you need. Solid maintenance terms will include such things as guaranteed uptime for the system and response time for handling of software problems.
  9. Spread your payment for the software and services provided by the vendor over the life of the project (delivery, installation, testing and acceptance), both to keep the vendor motivated to perform and to be sure you have leverage throughout the process to keep the project on schedule. If possible, a significant portion of the software vendor's license and other fees should be deferred until, and linked to, successful testing and final acceptance of the installed system.
  10. You will want legal input and guidance not only for contracts and other documentation of your business deal with the software vendor, but also to help assure that the rights you get in the software are sufficient for your purposes and to help spot any lurking intellectual property issues or concerns with the vendor's rights in the software.

K&C's 33RD ANNUAL EMPLOYMENT LAW UPDATE RETURNS

On November 17th the K&C Annual Employment Law Update returns to the Virginia Beach Convention Center for its 33rd year. The full-day seminar will feature members of the K&C Employment Law Team and speakers from several key employment law agencies. Attendees will have the opportunity to have any and all employment law questions answered by these and other expert speakers throughout the day and the speakers will be available in the ever-popular K&C Answer Booth. Seminar topics will include Effective Workplace Harassment Investigations, Hiring the Right People and ObamaCare/Other Benefits Under the New Administration, and more. For more information or to register click here or contact Andrea King at 757-624-3232.


The contents of this publication are intended for general information only and should not be construed as legal advice or a legal opinion on specific facts and circumstances. Copyright 2017.

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