Forums: Discussions for entrepreneurs and small business.

I am in the planning stages of offering an annual warranty that covers equipment defects.  I am looking for templates or forms with adequate verbiage for inclusions and exclusions.  I am trying to draft a warranty (service) contract that I can forward to my lawyer for review and approval.  I can save hundreds if I do the legwork.  Any suggestions on the websites or books that provide quality information?

Here's my 2 cents. I sell equipment I manufacture and my warranty contract is simple. (Maybe too simple.)

INCLUSIONS

I go with the principle that the customer wants to take care of the EXPENSIVE equipment they just bought from me (which costs from $300, $500 and up to $1200 apiece).  And I want them to have a good feeling dealing with me, and using my equipment, especially when that expensive equipment breaks down. (they're already under a lot of stress, can't use my equipment for their work/with their client, losing money due to downtime, etc. I don't want to make life harder for them.)

My "warranty" is if the equipment/gear they bought from me breaks down, email me and tell me the problem. Sometimes it's an easy fix that they can do on their end (if they're technically capable) and don't need to send the unit back!  If not, I tell them to just send it in and I'll repair it. They just need to cover shipping both ways. Most of the time, the fix is easy and just takes a couple of seconds of diagnosing, and couple of minutes fixing.  If all the part that can break down breaks, it only costs me under $10 to replace all those parts. The rest of the parts don't break down, or unlikely to break down, and all parts I use are of the highest quality!

EXCLUSION

The only caveat I tell my customers is I'll do warranty repair at no charge, as long as they did not ABUSE the equipment!  i.e. pour water on it, poured beer on it, threw it against the wall, run over it with a car (though my equipment can withstand that!), plug a 110V version to a 220V outlet and burned it out.

In my years of offering this kind of warranty, very few... maybe 3-4 out of 1000+ units sold get returned due to a defect. And usually, it's a defect that is caused by a marginal  component not within it's spec that fail after a week, or not performing to specs.

Nobody has abused my "warranty" offer and customers have peace of mind buying my equipment.  And since my "warranty" offer is unbelievable, they know I stand behind the quality of my products.

(Kinda like Hyundai offering 10-year/100K miles warranty, and Ford offering only 3 year/36K miles warranty.... which do you think stand more behind their product and their quality?)

So that's my thought...

OR... you can go with the principle that your customers want to rip you off, so you'll draft an iron-clad warranty that closes any loopholes and is full of lawyer speak that CYA (cover your *ss).

But what would your customers think of your product/company if you have a warranty offer like that?

Thanks for the tips!  My situation absolutely needs exclusions because of the nature of my business.  If my product fails, fixing or replacing it is not that costly.  The damage it could cause to the surrounding area would have to be covered under a seperate insurance policy.  Also, I must exclude acts of vandelism, flood, fire, electrical, etc.  I need to make sure that I stand behind my products but don't get left "holding the bag" in many instances.  Any ideas on where to get templates for contracts?