Can a company that gives a lifetime warranty declare bankruptcy and sell to a company that then does no have to honor the warranty?

The warranty was for new windows.

Asked on November 12, 2014 under Business Law, Arizona

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

The short answer is yes: depending on how the sale was conducted and whether the purchaser took on the obligations of the seller, or only acquired the assets, it could easily be the case that the first company declares bankruptcy or otherwise goes out of business and the second company acquires assets, the name, etc. of the first but not the obligation to honor the warranty. That doesn't mean it has to happen that way--there are also transactions where the acquirer does take over the warranty obligations--but it certainly is common for the successor or acquiring company to not be bound by the warranties. That is the problem with "lifetime" warranties--really, it's not just the lifetime of the product, but also the lifetime of the company issuing it that is critical.


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