Warranty vs Guarantee
Last updated: February 2025
Quick Comparison
| Aspect | Warranty | Guarantee |
|---|---|---|
| Legal meaning | A promise about facts, quality, or condition | A promise to answer for another's obligations, or a commitment to repair/replace |
| Parties | Between the contracting parties | Often involves a third party (guarantor) |
| Breach remedy | Damages only; no right to terminate for breach of warranty alone | Performance of the guarantee obligation (payment, repair, or replacement) |
| Formality | No specific formality required | Must be in writing under the Statute of Frauds 1677 for guarantees of debt |
What Is a Warranty?
A contractual promise or assurance about the quality, condition, or performance of goods, services, or stated facts. In contract law, a minor term whose breach entitles damages but not termination.
Key Features
- • A statement of fact or promise about quality or condition
- • Breach gives right to damages but not automatic right to terminate
- • Commonly used in commercial contracts and M&A transactions
- • Disclosure against warranties limits the warrantor's liability
Best For
- • Commercial contracts requiring assurances about quality or facts
- • M&A transactions with warranties and disclosures
- • Service contracts promising a standard of performance
What Is a Guarantee?
A promise to answer for another party's debt, default, or obligations, or a manufacturer's commitment to repair or replace faulty goods.
Key Features
- • In contract law, a secondary obligation dependent on primary debtor's default
- • Must be in writing and signed under the Statute of Frauds 1677
- • In consumer context, a manufacturer's voluntary promise to repair or replace
- • Consumer guarantees are in addition to statutory rights
Best For
- • Securing payment obligations through a third-party guarantor
- • Manufacturer commitments on product quality and durability
- • Landlord-tenant arrangements where a guarantor backs the lease
When to Use a Warranty
Use warranties in commercial contracts to require assurances about the condition, quality, or accuracy of information. In M&A deals, warranties from the seller provide the buyer with contractual claims if statements prove untrue.
When to Use a Guarantee
Use guarantees when you need a third party to stand behind someone else's obligations, such as a parent company guaranteeing a subsidiary's debts, or when offering consumers a product quality commitment.
Which Does Your Business Need?
If you need assurances about quality or facts within a direct contractual relationship, use warranties. If you need security from a third party for someone else's obligations, use a guarantee. In consumer contexts, manufacturer guarantees supplement but cannot replace statutory rights.
FAQ
Does a manufacturer's guarantee replace my statutory rights?
No. Under UK consumer law, a manufacturer's guarantee is in addition to your statutory rights under the Consumer Rights Act 2015. Your rights to reject faulty goods, request repair, or get a refund are unaffected by any guarantee terms.
What is the difference between a warranty and a condition in contract law?
A condition is a fundamental term whose breach entitles the innocent party to terminate the contract and claim damages. A warranty is a lesser term whose breach only entitles the innocent party to damages. The classification determines the available remedies.
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