Manufacturer's guarantee refers to any undertaking to a consumer by a person acting in the course business in this case a manufacturer, given without any additional charges, to reimburse the price paid or to replace, repair or handle consumer goods in any way if they do not meet the specifications set out in the guarantee statement or in the relevant advertising1. In other words a guarantee is mostly issued by a manufacturer of goods such as electrical appliances to its consumers, a guarantee would more or less serve as a coupon to carry out repairs or make a replacement in the event of a fault arising within a certain period of time. This definition is said to be wide enough to cover both a guarantee that is given by a supplier and that given by a manufacturer.
Extended warranties however, are different from a manufacturer's guarantee in a sense that they are the retailer's such as PC World's own consumer durable insurance policy. The extended warranty provides the same sort of cover that a guarantee does; only that a consumer has to pay for it and normally the cost can be up to 50% of the original purchasing price. Extended warranties are usually useful for four years beyond a manufacturer's guarantee. Thus, beyond the period of statutory protection.
The Sale and Supply of Goods to Consumers Regulations 2002, following the directives regulate consumer guarantees. Regulation 15 amends the rights to a consumer where guarantees are involved; Where goods are sold or otherwise supplied to consumers which are offered with a consumer guarantee, the consumer guarantee takes effect at the time the goods are delivered as a contractual obligation owed by the guarantor under the conditions set out in the guarantee statement and the associated advertising2. The guarantor shall ensure that the guarantee sets out in plain intelligible language the contents of the guarantee and the essential particulars necessary for making claims under the guarantee, notably the duration and territorial scope of the guarantee as well as the name and address of the guarantor3.
On request by the consumer to a person to whom paragraph (4) applies, the guarantee shall within a reasonable time be made available in writing or in another durable medium available and accessible to him4 This paragraph applies to the guarantor and any other person who offers to consumers the goods which are the subject of the guarantee for sale or supply5. Where consumer goods are offered with a consumer guarantee, and where those goods are offered within the territory of the United Kingdom, then the guarantor shall ensure that the consumer guarantee is written in English6.
If the guarantor fails to comply with the provisions of paragraphs (2) or (5) above, or a person to whom paragraph (4) applies fails to comply with paragraph (3) then the enforcement authority may apply for an injunction or (in Scotland) an order of specific implement against that person requiring him to comply7. The court on application under this Regulation may grant an injunction or (in Scotland) an order of specific implement on such terms as it thinks fit8.
The provision to the effect that guarantees are contractually binding whether issued by a manufacturer or a retailer, the fact that a guarantee is legally binding it avoids the need to satisfy the English law requirement of consideration. Even where a guarantee has not been paid for , consideration will normally be able to be found on the basis that the consumer has provided a benefit to the party offering the guarantee whether it is the retailer of a manufacturer by entering into the contract for the purchase of the goods.
However, in the absence of this new provision, it is a possibility to the occurrence of disputes as to the consideration issue where a consumer is not aware of the guarantee prior to the purchase of the product. It is also significant that what is binding are the conditions laid down in the guarantee statement and the associated advertising meaning that the statements in leaflets, brochures and general advertising which add to or elaborate upon the formal contents of the guarantee should be binding along with these formal contents.
The Regulations following the Directives also contain helpful rules on transparency. The guarantor and any other party supplying goods that are the subject of the guarantee must, on request by a consumer, provide in writing (or in any other durable medium) a copy of the guarantee9. In all cases the guarantor must ensure that the contents of the guarantee and the essential particulars necessary for making claims10 are set out in plain intelligible language.