Analysing Three Types of Project Warranties
Project warranties are promises , explicit or implicit , that goods or services will meet predefined standard. The standard may cover reliability , performance of the product , safety, and quality.
Some warranty agreements may promise repair or replacement of products or Services for certain months, years or life.
Typical Example…
In my previous example of Fourth Mouse Consulting as the manufacturer of a new solar car model, it outsourced the project that deals with making of solar panels. The vendor responsible for the project created the solar panels and delivered them within the allotted time and budget.
Fourth Mouse Consulting signed a warranty agreement with the vendor that extends for a year.
The agreement listed all services the vendor may provide in case of any serious defects found in the solar panels.
They even agreed for a replacement of panels of the is found in the solar panel.
They even agreed for a replacement of panels if this defect is found within a month of it’s manufacturing date.
Type of warranties …
As a Project Manager , you may encounter several types of warranties…
#1 Express Warranty
Of the predetermined standard of quality or performance is specified , either in a formal warranty or in the manufacturer’s description of the product, it is considered an Express Warranty.
#2 Warranty of Merchantability
Implied warranty that requires goods to be for for ordinary usage.
Any sale of an item is subject to warranties of Merchantability . The sale of an item for use in a particular project will mean that the item was also subject to warranty of fitness if it can be proven that the seller knew how it will be used.
#3 Warranty of fitness of purpose
These are implied warranties that requires goods to be fit for the usage that was intended for by the buyer.
#4 Implied warranty
If the predetermined standard for quality or performance exists but is not specified , it’s considered an implied warranty. This type of warranty takes effect of the buyer depends on the seller’s expertise when making a purchasing decisions .
If you purchase items that are widely available on the market , it is assumed that you are relying on the seller’s expertise in determining that the goods are merchantable and fit for a particular purpose.
On the other hand, if you are a technical expert and you require an unusual modification to the product or you intend to use the standard product in an unusual way, you won’t be able to claim implied warranties.
Similarly, if you provide detailed product specifications and the seller meets them , you won’t be able to claim that the seller breached an Express Warranty if the goods do not meet your needs.