Caterpillar: Confidential Green

Bulletin No. 1.01

SERVICE

WARRANTY BULLETIN
Warranty Philosophy

Global General Guidelines

This bulletin was prepared to assist Dealers in understanding the rationale behind Caterpillars basic warranty practices. It identifies the responsibilities of each participant in warranty situations, that being the customer, the dealer and Caterpillar, as well as explaining the difference between a warranty and a goodwill settlement. Dealer personnel need a clear understanding of Warranty Philosophy for two reasons: 1) To develop the foundation required to correctly and efficiently administer warranty and 2) To make it better understood that a Dealers warranty department is not the only area responsible for administering warranty.

What Is Warranty?
The Caterpillar Warranty is Caterpillars legal commitment to provide, through its Dealers, customer protection for product/part defects in Caterpillar material and workmanship during a specified period of time or product usage. Warranty also protects Caterpillar and its Dealers from unreasonable customer claims. Caterpillar Warranty has legally binding commitments and limitations that cannot be altered. These are outlined on a legal document called a Warranty Statement that is given to the customer.

Can A Warranty Be Voided?

A manufacturer cannot void or cancel their product warranty to a customer, but they can elect to not participate in rectifying a failure that was caused by customer misuse or modification (i.e. altered, added to, misadjusted). This is because there would be no defect in Caterpillar material or workmanship. The customer could still have warranty coverage on any subsequent failures that are the result of a defect in Caterpillar material or workmanship.

01.01-01 (12/11) https://warranty.cat.com/wtyguide 2009 Caterpillar All Rights Reserved. CAT, CATERPILLAR, their respective logos, Caterpillar Yellow and the POWER EDGE trade dress, as well as corporate and product identity used herein, are trademarks of Caterpillar and may not be used without permission. Dealer and Dealers are defined as any Cat Authorized Dealer or Cat Authorized Repair Representative.

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What Is A Warranty Repair?

A warranty repair restores the product to its operating condition just prior to the failure, by repairing and/or replacing the defective part, and the resultant damaged Cat parts, gaskets, seals, etc. needed to correct the defect. A warranty repair is not intended to restore the product to a like-new condition. Defective Part - is the Cat part that caused the failure. Resultant Damaged Cat Parts - are the Cat parts that were damaged as a result of the failure of the defective part. Cat parts include Cat approved parts.

Warranty Statement Disclaimer

All warranty statements have what is called a Disclaimer, which is printed in bold print either at the bottom or on the back side of the statement. From a legal standpoint, the Disclaimer is an important element of a warranty statement. There are two key points that the Disclaimer contains: Nothing else is implied, except what is stated. Which means what is stated on the warranty statement is Caterpillars legal obligation, nothing more. Incidental and consequential damages are excluded. Caterpillar is not responsible for incidental and consequential damages. Incidental damages are best described as damages to property resulting from the failure. Consequential damages are best described as other damages, notably loss of profit or use as a consequence of the failure. As a matter of practice Caterpillar will repair or replace resultant damaged Cat parts. For example: A Cat fan blade broke off and damaged the radiator. Caterpillars Warranty will provide for replacement of the defective blade. As a matter of practice, Caterpillar will also replace the resultant damaged Cat parts. The warranty does not cover the damage to parts made by manufacturers other than Caterpillar, or the loss of profit due to downtime (consequential damage).

Administrating Warranty
The Dealer is responsible for administrating Caterpillar Warranty. Administration of warranty includes the following Dealer responsibilities: Determining whether a Caterpillar defect in factory material or workmanship caused the failure. Determining if the failure is covered by warranty, and if so, what expenses are covered. Determining the most economical method of repair. Making the repair settlement with the customer at the close of the repair. Submitting a claim to Caterpillar after the customer settlement is made, for monetary Dealer reimbursement from Caterpillar with proof that the failure was the result of a defect in Caterpillar material or workmanship. Dealers administer warranty because: They have all the relevant facts about the failure including: All the parts involved in the failure. The failure analysis data. The repair documentation. Any previous failure information.

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Bulletin No. 1.01

Who the customer is and their application. The product operating conditions. The customer/operator practices.

And, customers should view the Dealer as the one who makes all decisions associated with the repair. Note: Dealers administer warranty on behalf of Caterpillar to the customer. Repair settlements are based upon the Dealers business philosophy. What Caterpillar reimburses a Dealer may differ from what the Dealer settles with the customer.

Three-Party Responsibility
The merchandising of Cat products involves three parties: the manufacturer, the Dealer, and the customer. Each of these parties has specific individual responsibilities that have an impact on warranty. Understanding these responsibilities is essential for Dealers to determine which party or parties are liable for payment of a repair, and in some cases, the amount of the payment. Caterpillar, the manufacturer, is responsible for: Standing behind the Warranty obligation. Initiating product improvements. The Dealer is responsible for: Selling products within limits of their intended capacity and application. Delivering products in good initial adjustment. Instructing customers on proper operation and maintenance. Reporting the cause of failure to Caterpillar on completion of troubleshooting. Administering Caterpillar Warranty. The customer is responsible for: Operating the product properly and within the limits of its intended capacity and application. Fueling, lubricating, adjusting, operating and maintaining the equipment as instructed by the Dealer and in accordance with the recommendations set forth in applicable Caterpillar manuals, including the Operation and Maintenance Manual. Notifying the Dealer promptly if a problem exists. Making the product available to the Dealer for normal and product improvement program repairs.

Goodwill
Goodwill IS: Intended to maintain customer satisfaction and promote future business. A gesture offered at the discretion of the Dealer and/or Caterpillar. Pertaining to product incidents not covered by Caterpillar Warranty. Goodwill IS NOT: An extension of warranty or an extended service plan. Intended to offset normal repair costs. To be used for minor failures. To be automatically applied to a specific problem or customer.

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A legal obligation. Typically, a goodwill settlement involves a shared participation in the repair costs by: The Dealer and the customer, or The Dealer and Caterpillar, or The Dealer, Caterpillar, and the customer

Requesting Goodwill Participation From Caterpillar

Dealers should follow the Goodwill process provided by their Caterpillar representative.

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