Warranty or Guarantee?
Two of the most common terms we see in product or service documentation
We very often hear two words in relation to consumer matters: Warranty and Guarantee.
These terms come up especially in relation to contracts but sometimes even when we buy something and we receive some documentation.
Many people assume they mean the same thing, but in fact, a Guarantee is not the same as a Warranty.
What then do these terms mean?
✅ Guarantee
From a legal point of view, the term ‘guarantee’ is a stronger term and a more reassuring one.
It is the one we normally associate with contracts and consumer law.
It gains its strength from the fact that it is effectively, a promise from the seller to do certain things in the case that certain things should happen.
For example, if we buy a household appliance such as a fridge or microwave oven, there will be a guarantee from the manufacturer that if that product breaks down within a certain timeframe – normally, one or two years for most consumer products – he will repair or replace it.
This gives a high level of protection against faulty products, and the purchaser feels secure and well protected.
In most cases, the guarantee will be a simple one, covering all cases of breakdown or malfunction provided they’re not the consumer’s own fault, within a stated period of time.
In some cases, however, such as with cars, the guarantee may be broken down into several parts.
Actual physical parts might be covered in a different way to the labor required for replacing or repairing those parts.
Also, perhaps the guarantee on the engine will last a shorter length of time than the one for the bodywork.
☑️ Warranty
The term, ‘warranty’, on the other hand, is not a promise to carry out any specific action in the future.
It is, rather, an assurance.
The advantage it offers is that it allows for a more holistic umbrella of protection, without committing the seller or manufacturer to a particular course of action.
It is, in effect, saying, “this product is good” but without promising to fix or replace it if it turns out not to be.
Why then, do sellers give warranties?
In certain cases, warranties provide strong legal protection.
In real-estate transactions, the seller may warrant that they have clear title to the property being sold, meaning there are no legal claims or liens against it.
In this case, the warranty has significant legal value, because it assures the buyer and other interests such as financial lending institutions that there are no potential problems, and the property has a clean title of ownership.
In service agreements, a warranty assures the client that the provider has the necessary qualifications, expertise, and resources to perform the contracted services.
If the statements contained within the warranty turn out to be untrue, that gives the purchaser a strong degree of legal recourse.
Similarly, in licensing agreements for intellectual property such as computer software or patent use, the seller is stating that he has the legal right to grant such a license.
Warranties can be said to create a reasonable expectation of performance or quality, which encourages prospective purchasers to go ahead, while taking into account possible limitations and external circumstances.
In simple terms, it is often more about making the consumer feel better about buying something, knowing that they have at least some degree of protection.
⭐ Examples
If, for example, we buy a second-hand car from a dealer, and that car is already outside the manufacturer’s guarantees because of age, we still want to know we are not buying a faulty car.
Of course, in most countries, the dealer still has a legal obligation to ensure goods are fit for the purpose they were designed for unless otherwise stated.
However, the existence of the warranty assures the purchaser that when he walks (or drives) away with his purchase, he can expect it to be fit for purpose and in reasonable condition.
In these examples, the term ‘warranty’ is a statement of certain truths about the subject matter of the contract.
It provides a level of assurance leading to confidence, without claiming absolute perfection or committing the seller or manufacturer to a specific course of action that might be expensive or even impossible to carry out.