A limited lifetime warranty is a guarantee provided by a manufacturer or seller that covers specific defects or issues in a product for the duration of the product's natural life. This warranty often includes certain conditions and exclusions, meaning it may cover only particular parts or types of damage and might require proof of purchase or maintenance.
The Company does offer a 30-day return policy from the date of shipment. The Company also provides a limited lifetime warranty on its products. Due to a limited history of returns, the Company does not maintain a warranty reserve.
Over 90% of our warranty liability relates to our Wholesale reportable segment as we generally warrant our products against defects for one to three years on fabric and leather, from one to ten years on cushions and padding, and provide a limited lifetime warranty on certain mechanisms and frames, unless otherwise noted in the warranty. Additionally, our Wholesale segment warranties cover labor costs relating to our parts for one year. We provide a limited lifetime warranty against defects on a majority of Joybird products, which are a part of our Corporate and Other results. For all our manufacturer warranties, the warranty period begins when the consumer receives our product. We use considerable judgment in making our estimates, and we record differences between our actual and estimated costs when the differences are known.
The Company offers a limited lifetime warranty for manufacturing defects only on product sold. Due to sales recently occurring, the Company is unable to reasonably estimate future costs that will be incurred under its lifetime warranty program on revenue recognized as of June 30, 2020. However, the Company anticipates the amounts associated with revenues recognized as of June 30, 2020 to be immaterial to the financial statements.
Effective February 1, 2014 the Company modified its warranty to a limited lifetime warranty. The warranty was effective February 1, 2014, is not anticipated to have a significant effect on warranty expense. Effective January 1, 2017, the Company modified the standard warranty offered on products sold after January 1, 2017 to provide specific warranty periods by product component, with no warranty period longer than ten years. The Company’s warranty is not a guarantee of service life, which depends upon events outside the Company’s control and may be different from the warranty period. The Company accrues an estimate of its exposure to warranty claims based upon both product sales data and an analysis of actual warranty claims incurred.
The Company provides a warranty against all substantial defects in material and workmanship. The standard warranty offered on products sold through January 31, 2013 is ten years. Effective February 1, 2014 the Company modified its warranty to a limited lifetime warranty. The warranty was effective February 1, 2014, is not anticipated to have a significant effect on warranty expense. Effective January 1, 2017, the Company modified the standard warranty offered on products sold after January 1, 2017 to provide specific warranty periods by product component, with no warranty period longer than ten years. The Company’s warranty is not a guarantee of service life, which depends upon events outside the Company’s control and may be different from the warranty period. The Company accrues an estimate of its exposure to warranty claims based upon both product sales data and an analysis of actual warranty claims incurred.
We warrant our products against certain defects in material and workmanship when used as designed on the vehicle on which it was originally installed. We offer a limited lifetime warranty on most of our products. Our standard warranty limits the end-user’s remedy to the repair or replacement of the part that is defective.
Warranty Reserve. The standard warranty periods we provide for our products typically range from one to five years. The majority of products acquired through the acquisition of the TN Companies carry a limited lifetime warranty, which requires us to repair or replace a defective product, or offer a refund of a portion of the purchase price based on a depreciated value at our option. We establish reserves for estimated product warranty costs at the time revenue is recognized based upon our historical warranty experience, and for any known or anticipated product warranty issues.
Guarantees and Product Warranties The majority of the Company’s hardware products are shipped with either a one-year warranty or a limited lifetime warranty, and software products receive a 90-day warranty. Upon shipment of products to its customers, the Company estimates expenses for the cost to repair or replace products that may be returned under warranty and accrues a liability in cost of product revenues for this amount. The determination of the Company’s warranty requirements is based on actual historical experience with the product or product family, estimates of repair and replacement costs and any product warranty problems that are identified after shipment. The Company estimates and adjusts these accruals at each balance sheet date in accordance with changes in these factors.
The Company has a limited lifetime warranty on all products. The Company does not offer the option to purchase warranties. The Company accounts for warranties under ASC 460, Guarantees, and not as variable consideration related to revenue.
Backed by our limited lifetime warranty on the apron chain, customers can depend on this rugged machine. The upgraded rate control option powered by Raven is the only unit in the industry to have completely automatic spreading capabilities with apron speed and slop gate control.
A Limited Lifetime Warranty is a type of product guarantee that promises the purchaser that the product will perform as expected for the duration of its useful life, under specific conditions as outlined by the manufacturer. The warranty is “limited” because it only covers certain parts or types of damage and not others. Additionally, “lifetime” can refer to the lifetime of the product, the availability of parts, or the period during which the original purchaser owns the product.
You should consider using a Limited Lifetime Warranty when you want to:
To write a Limited Lifetime Warranty, follow these steps:
Define the product scope: Clearly specify the products that are covered by the warranty.
Describe the duration: Clarify what “lifetime” means in the context of the warranty (e.g., the lifetime of the product, ownership duration).
List covered defects: Specify which types of defects or damages are covered, such as manufacturing defects.
Outline exclusions and limitations: State any exceptions, such as damage from misuse, natural wear and tear, or unauthorized repairs.
Explain the claims process: Provide instructions on how customers can file a claim, what documentation is needed, and the expected timeline for resolution.
Detail remedies: Describe what actions you will take if a covered defect is found, such as repair, replacement, or refund.
This limited lifetime warranty covers defects in materials and workmanship for the original owner during normal residential use when the product is installed and maintained according to provided guidelines.
Limited Lifetime Warranties are commonly found in contracts related to durable goods and long-lasting products. These include:
Using a Limited Lifetime Warranty can benefit both consumers and manufacturers by providing clear guidelines on what is covered and instilling confidence in the product.
Dive deeper into the world of clauses and learn more about these other clauses that are used in real contracts.
A limited warranty is a contractual clause that provides a guarantee for a product or service but restricts the conditions and scope of coverage. It typically specifies what is covered, the duration of the warranty, and any actions or circumstances that may void it.
Liquidated damages are a predetermined sum agreed upon by the parties to a contract, payable in the event of a specified breach, serving as compensation for losses that are difficult to quantify. This clause aims to provide certainty and avoid lengthy legal disputes over actual damages while discouraging breach of contract.
A liquidity covenant is a financial stipulation included in loan agreements requiring the borrower to maintain a specified minimum level of liquid assets or cash flow to ensure they can meet their short-term obligations. Non-compliance with this covenant can lead to penalties, increased interest rates, or even the loan being called in by the lender.
Try our AI contract analysis and extract important clauses and information from existing contracts.
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