When buying goods and services, we are all used to being told that what we've bought is covered by a 'guarantee' or 'warranty'. But what does this mean, and what benefit can we expect to receive if we have to make a claim for faulty goods or shoddy workmanship?
What is a Guarantee?
A guarantee is most often issued by the manufacturer of goods such as electrical equipment, or by a company that has provided a service, such as replacement windows. It is normally provided free of charge at the time you buy the goods or services. A guarantee is considered in law to be an agreement to provide some benefit for a set period of time in the event of the goods or services being defective. Usually, the guarantee undertakes to carry out free repairs for problems that can be attributed to manufacturing defects. Manufacturers are not legally obliged to provide you with a guarantee, but if they do, it must be in plain English and clearly explain how to make a claim.
What is a Warranty?
A warranty provides the same sort of cover that a guarantee does, but often you have to pay extra for it - for example, many electrical stores offer a warranty for cover against the cost of repairs and replacement parts for up to five years after purchase. Effectively, these sorts of warranties are insurance policies, issued by and underwritten by insurance companies. Just to confuse matters, these can sometimes be known as 'extended guarantees' or 'extended warranties'!
What legal protection do I get with Warranties and Guarantees?
As both are contracts, warranties and guarantees give you the right to make a legal claim against the person issuing them (guarantees are contracts because the Sale and Supply of Goods to Consumers Regulations 2002 say that they are). This means that if the manufacturer refuses to honour the warranty or guarantee, you can take them to court to force them to meet their promises. For example, if the company that issued the warranty will not carry out a repair within a reasonable time when the guarantee says it will, you could sue for the cost of employing someone else to put the problem right.
However, it is important to remember that both warranties and guarantees are in addition to your statutory rights under either the Sale of Goods Act 1979 (as amended) or the Supply of Goods and Services Act 1982 (as amended). If you have problems with goods or services, it is best to go back to the company from which you bought them, as the law considers them to be responsible for any problems under their contract with you. See our leaflets 'Buying Goods' and 'Buying Services' if you want more information on your rights under contract law.
Some Frequently Asked Questions
Q. I bought a fridge/freezer about 18 months ago, and the freezer section has completely failed. I went back to the shop, and they refused to do anything as it was outside the original 12 month guarantee. What are my rights?
A. Firstly, when you buy goods from a shop, you enter into a contract under the Sale of Goods Act 1979 (as amended). This holds the shop liable for up to six years after purchase (Limitation Act 1980), providing that you can show that the problem is down to an unreasonable fault and not normal wear and tear. Secondly, remember that the guarantee is in addition to these statutory legal rights. Don't be taken in by the shop's argument here - they are using the issue of the guarantee as a red herring to try to avoid their legal obligations toward you. See our leaflet 'Buying Goods' for more information on your rights.
Q. I had new damp-proofing work carried out on my house five years ago by a limited company, but I've noticed some rising damp under a bay window. I don't think this should have happened so soon, and I complained to the company who did the work, as they gave me a ten year guarantee. However, the company claims that it was taken over by new owners last year, and they are refusing to honour the guarantee, or carry out any remedial work, unless I pay. Can they do this?
A. If it is true that they have been taken over by another owner or company, then, unfortunately, they probably can. Your contract was with the original company, and they are liable to you only for as long as they are trading. However, if they cease trading, or are taken over by another firm, the contract, and also the guarantee, becomes worthless and unenforceable. To avoid this problem, many firms now offer insurance-backed guarantees for this sort of work. This means that the guarantee is underwritten by an insurance company, and exists in its own right, separate from the company who carried out the work. If the company disappears or goes bust, you should still be able to make a claim under the guarantee from the insurance company or their agents, for the lifetime of the guarantee.
Q. I took out a five year extended warranty on my PC when I bought it three years ago. There have been many problems in this time, and the company has tried to repair it six times. Now the motherboard has completely failed. I have looked at the terms of my extended warranty and this says that I may be entitled to a replacement if there are more than three attempts at repair. How do I enforce my rights under the policy?
A. You need to read the policy carefully, as often they state that the insurance company who issued it are the ones to decide whether repair, replacement or compensation is appropriate - not the consumer. You should write to the insurance company, addressing your enquiry to the Policy or Schemes administrator; you will probably find the contact information on the policy itself. In your letter, you should include details of all the occasions the PC has been repaired, with dates and invoices if at all possible. You should also quote the clause in the agreement under which you would like to claim. If you think you have a claim under the agreement and the company refuses to meet it, you can refer the matter to the Financial Ombudsman Service on lo-call number 0845 080 1800.
Q. I bought a used car six weeks ago and the dealership persuaded me to buy a 12 month warranty. I thought that this would cover me for anything that went wrong during this period. The cambelt has just failed, and this has led to a very high repair bill. However, the warranty company have just pointed to a clause in the policy that excludes liability for cambelt failures, and they won't pay for the repair. What are my rights?
A. With any guarantee or warranty, you should never just assume the level of cover. It is essential that you read the terms and conditions at the time they are given to you, so that you can challenge any you don't like, or try to negotiate better cover. As it is, the warranty company is probably entitled to rely on this exclusion clause. Don't forget, however, that you still have a contract with the dealer who sold you the car. You might want to argue, under the Sale of Goods Act 1979 (as amended) that this is an unreasonable fault to have developed so soon after purchase, and that the dealer is in breach of contract. See our leaflets 'Buying Goods' and 'Buying a Second-Hand Car' for more information.
Q. I had a builder in to do a small extension last year. He told me that all his work was 'guaranteed', whatever that may mean, and I am afraid that I took his word for it and didn't get anything in writing. The pointing in the brickwork is now defective, but he refuses to put it right. When I mentioned the guarantee, he just laughed and said: 'What guarantee?' What rights do I have against him?
A. This problem shows the importance of getting any guarantees or warranties in writing. Without this, it is impossible to prove that you were offered a guarantee, or indeed, what the extent of the cover might be. Remember, though, that you have a contract with the builder under the Supply of Goods and Services Act 1982 (as amended), and he should have carried out the work to a reasonable standard. See our leaflet 'Buying Services' for more information on your rights.
Q. I bought a microwave oven four months ago, and it went wrong. The shop has replaced it with a brand new one, which is working well. They won't, however, give me a new guarantee for this replacement. Can I demand one?
A. No. Remember, guarantees are viewed as being an optional extra, and are provided in addition to your legal rights under the Sale of Goods Act 1979 (as amended). Manufacturers will usually argue that their intention is to provide you with extra protection under the guarantee for a fixed period of time after the initial purchase, often for 12 months. Therefore, no matter how many repairs or replacements you get, it is usual for the manufacturers to stick to this time limit. You can always try negotiating though - sometimes persistence pays off, especially if you have had lots of problems with a particular make or model.
Q. I bought a brand new motorbike a month ago, which came with a manufacturer's six year anti-corrosion and paintwork guarantee. The exhaust has started to rust, and the paint on the tank is peeling, so the bike will probably need major repainting and rechroming work, which will be costly. The manufacturer is refusing to honour the guarantee and, as this was one of my main reasons for buying this make, I am very annoyed. What should I do?
A. Even though you did not pay for it, the guarantee is a legally binding contract under the Sale and Supply of Goods to Consumers Regulations 2002. If the manufacturer will not honour it, you can take them to court to force them to do so. You can, of course, also complain to the dealer from whom the bike was purchased, along with any finance companies who may have financed the deal, as the law considers them liable too.