Section 2 - Buying Goods and Services

Lesson 9 -  Warranties and Guarantees

Have you ever bought something, brought it home, and found out that it just didn't work? Or perhaps it worked for a while but broke down in a couple of weeks. If so, you probably went looking for the guarantee that came with the item-the one you most likely threw out by accident along with the sales slip when you first opened the box.

A warranty is a promise-made by a manufacturer or by a retailer-to the effect that the goods being sold meet a certain standard. Normally, the party making the warranty promises to replace or repair the product if it fails to live up to that standard for, a stipulated period of time after the purchase.

Remember how contracts can be either express contracts or implied contracts? Well, warranties are likewise either express warranties or implied warranties.

Warranty: a promise by a manufacturer or retailer that goods being sold meet a certain standard

Express warranty: an explicit, clearly stated warranty that's usually written down

Implied warranty: a warranty that a seller may not actually make but that the law says is part of the contract anyway

Express Warranties

An express warranty, commonly called a guarantee, is generally a promise that's written down, usually on a certificate that comes with an item you buy. Such a guarantee may allow a consumer several recourses if the item purchased is defective. The consumer may be able to

• get the item repaired (You may have to take or send it to an authorized service centre.)
• get a refund
• replace the item with another one
• bring a legal action against the manufacturer or retailer if that party fails to live up to its promise

Regardless of the remedies available to a purchaser, good warranties all have several things in common. The diagram that follows illustrates six of these features.

Test Yourself:

1. Following is an express warranty (guarantee), for an appliance bought by Juanita Thomson. Unfortunately, it isn't very well written. Examine the warranty and think of three of its shortcomings.

Turn to the Suggested Answers at the end of this lesson and compare your answers with the ones given there.

Implied Warranties

Whenever you buy something, you're protected by more than the express warranty, or guarantee, that may have come in the box. Merchants in Alberta and the other provinces and territories in Canada are also obliged to make certain unspoken, or implied warranties about the goods they sell. These implied warranties are laid out in the Sale of Goods Act . This is a provincial act, or statute, but each province has similar legislation.

According to the Sale of Goods Act , sellers must promise that the following is true about the merchandise they sell:

• the seller has legal title to the goods and has the right to sell them.
• the merchandise is of merchantable quality and is suitable for the required purpose.
• the items being sold are similar to any samples or descriptions provided by the merchant.
  
  

Statute: a law passed by a government

Legislation: a statute or statutes-a law or laws passed by a government

Merchantable Quality: suitable for sale

Test Yourself:

2. Gina wants a new car. She finds one she likes, test-drives it, and decides to order a similar one. However, she wants it to be candy-apple red with black upholstery. Assured by the saleswoman that this is no problem, Gina orders the car.

Three weeks later, Gina's car arrives, but it's maroon, not red, and the upholstery is grey. Can Gina refuse delivery of the vehicle? Explain.

Turn to the Suggested Answers at the end of this lesson and compare your answers with the ones given there.

You have just looked at warranties and guarantees. Most often, consumers make use of the express warranties written out by manufacturers when merchandise proves faulty. Always be sure to read those guarantees carefully and to put them away someplace safe. Sometimes the manufacturer requests that you go online or mail in a card when you purchase an item to register your ownership and the date of purchase with the company. This can seem a nuisance at the time, but it makes getting action on any guarantee much easier if, down the road, the item malfunctions.

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Suggested Answers:

1. Answers will vary. Here are three shortcomings you might have mentioned: 

• No time frame is given.
• If parts and labour aren't included in the guarantee, what's left?
• The situations in which shipping and handling costs will be charged aren't spelled out. 

2. Yes, Gina can refuse delivery under the Sale of Goods Act since the car doesn't live up to the description given Gina by the saleswoman.