Would a credit card or other financial product be liable for a breach of warranty?
A breach of warranty involves a broken promise about a product made by either a manufacturer or a seller. The term also covers a failure of a statement or agreement by a seller of property which is a part of the contract of sale, when the truth of the statement is necessary to the validity of the contract. Warranties are also express or implied. An express warranty is a particular stipulation introduced into the written contract, by the agreement of the parties; an implied warranty is a guarantee imposed by law in a sale. Even though the seller may not make any explicit promises, the buyer still gets some protection.
Warranty protection is provided under the Uniform Commercial Code (UCC), which has been adopted, at least in part, by all states. On the federal level, Congress enacted the Magnuson-Moss Warranty—Federal Trade Commission Improvement Act of 1975, The federal Act has had a substantial impact on the warranty provisions of the Uniform Commercial Code. In general, it mandates certain guidelines in connection with written warranties and, where written warranties are given, invalidates attempts to disclaim implied warranties. The federal Act is aimed at written warranties and service contracts made in connection with the sale of "consumer products," requires that they they must meet federal standards in terms of disclosure and remedies provided to an aggrieved consumer.
The Uniform Commercial Code defines "consumer goods" or "products" as "all things which are movable at the time the security interest attaches or which are fixtures (Section 9-313), but does not include money, documents, instruments, accounts, chattel paper, general intangibles, or minerals or the like (including oil and gas) before extraction. "Goods" also includes standing timber which is to be cut and removed under a conveyance or contract for sale, the unborn young of animals, and growing crops."
While a credit card may create an account for payment of goods or products that may carry certain warranties, the card itself may not be considered a good. It simply represents the agreement between a lender and a borrower to lend and re-pay money. The terms of the credit agreement will spell out any duties and obligations of each party (lender and borrower). Any breach of that agreement may be enforced under local contract law.