For most people the terms like guarantee and warranty have no difference and that just means using them interchangeably but of course there is a difference which is what we are to look at in this post.
WHAT IS A WARRANTY?
When suppliers or sellers talk about warranties, they are talking about a promise to repair or replace an item if necessary, within a defined period of time. In short a warranty is a promise to take corrective action so that the obligations of a contract are fulfilled.
For example
When you buy a new car from a dealer, there is a warranty that the car works (fitness for purpose). Supposing the car doesn’t work, the warranty will give you (the owner) the right to have the dealer fix the car under certain conditions. Typically the conditions are spelled out in the warranty.
Remember warranties can also be implied meaning that they don’t have to be in writing, for instance, there is an implied warranty that if you buy food from a restaurant the food id edible.
GUARANTEES AND HOW THEY WORK
A contract of guarantee is also known as a contract of suretyship. This is a contract by one person to discharge the debt, default or miscarriage of another.
Example
Alex and Bree go into a shop. Bree says to the shopkeeper, “let him (Alex) have the goods, and if he does not pay you, I will.”
What you have in this context is a contract of guarantee, in which the primary liability is with Alex and the secondary liability is with Bree. (Guarantor)
RELATED: Elements of a contract of guarantee
Due to the considerable obligations placed on the guarantor, it is important to have this contract in writing. This means having a separate agreement between the guarantor and the beneficiary, like in the example above example, a written agreement between the shopkeeper and Bree which states Bree’s obligations in the event of no payment.
Remember the use of the word guarantee is not in itself conclusive, given that the word is often used in ordinary commercial dealings to refer to warranty and at times to mis-describe what is in the law a contract of indemnity and not guarantee.
Confirm Sign Up via the Email you provided