What is a warranty?
In its simplest form, a “warranty” is merely another form of “contract” which binds a party to perform in a specified way, either in terms of providing a product that accomplishes a specified task or in delivering a service that provides certain minimal benefits. Such warranties are provided for all types of products and services, from real estate to manufactured goods, from plumbers to soft ware engineers.
- Warranties are promises offered by manufacturers and other parties on production conditions.
- Buyers must fulfill specific duties for the warranty to be honored.
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- Each company has a unique process for addressing warranties. Even if a product is within the timeframe designated by a warranty, the company may require multiple proof points to show that the product failed in normal use.
- If the product failed because of the owner’s actions rather than a fault in the design or manufacturing, the warranty is not likely to be honored. For instance, the owner might have placed the product in an extreme environment that was too hot or too cold for its reasonable use.
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- Warranties can be either expressed or implied.
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Express Warranty: As its name suggests, an express warranty is an expressed guarantee from a seller or manufacturer to a buyer that the purchased product performs according to certain specifications. If defects are present, the seller agrees to repair or replace the defective product. The warranty can be expressed in writing or verbally in advertising, on the product, or through other means.
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An implied warranty, which is also called an implied warranty of merchantability, is a guarantee that the purchased product functions in the manner designed. It need not be expressed to be valid. This guarantee is implied unless it is explicitly excluded—typical of “as is” sales. Implied warranties also apply when sellers present and sell a product fit to fulfill a specific purpose. The buyer relies on the seller’s expertise to purchase the product. Any statements made by the seller regarding the product can be considered assurances.
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Warranty vs. Guarantee
The terms warranty and guarantee are often used interchangeably, but there are subtle differences between the two. Both require sellers to act on certain promises they make to consumers about their offerings. However, the difference lies in the level of confidence the manufacturer expresses regarding the product’s quality and functionality.
A warranty is a guarantee from a seller that if their product fails to meet certain specifications, a remedy is available. A warranty describes the conditions in which the seller is liable and what conditions are excluded. Although the buyer does not pay a separate cost for the warranty, the warranty price is included in the product’s price.
A guarantee, on the other hand, is a promise or assurance from the manufacturer or seller that the product will work as described or meets specific quality standards. If it doesn’t, the manufacturer will fix or replace it. Guarantees are of no cost to the buyer and can be offered for both products and services.
What is not an expressed or implied warranty?
Obvious sales talk or what is legally known as “puffery” by a seller such as, “this is the best pizza in the world” cannot ordinarily be treated as a legally binding warranty. Only if the buyer has reason to believe that the seller has unique or expert knowledge of the conditions of the market and the buyer requests the seller’s unique or crafted opinion as an expert, would the buyer be entitled to rely legally on the warranty which brings us to rely on the reasonablesness test when differientiating between warranty and puffery.
