Meaning of Guarantee in English

Meaning of Guarantee in English

Every entrepreneur knows it: the goods are delivered, tested and come back again. The question then is how you should deal with it. We’ll tell you everything you should know about guarantees .

What does guarantee mean?

Defined by digopaul, the guarantee is a voluntary service on your part for the buyer. According to this, your customers can complain about a defective item or a service provided, should there be a defect. Whether the defect existed from the start or only arose afterwards is usually of secondary importance for the guarantee.

With the guarantee, you are free to determine the duration and the exact guarantee case. In order to avoid major financial damage, so-called wear parts are often excluded from the warranty on electrical devices.

What is the difference between guarantee and warranty?

In contrast to a guarantee, the guarantee is stipulated by law. It is borne by the dealer and is valid for a total of 24 months for new goods and for 12 months for used items. The warranty covers all defects that existed from the start – i.e. before the first use. All regulations regarding the warranty are regulated in the BGB (German Civil Code). The following general conditions apply:

  • Up to six months after the purchase, the burden of proof lies with the seller, which means that you as the retailer would have to prove that the defect was caused by the buyer himself.
  • From six months onwards , the burden of proof lies with the buyer, which means that in the worst case scenario, he must first prove that the defect existed from the start and why he did not report it earlier.
  • The warranty is only binding for you if you sell the item as a commercial dealer . Private individuals are excluded from the warranty.

What does the legislator say?

The warranty law is regulated in the German Civil Code (BGB) and relates to a purchase contract as well as a work contract and even a rental contract. From a legal point of view, the guarantee is understood to be the debtor’s obligation to be responsible for a defect in a service or a product. According to § 438 I No. 3 BGB , a warranty period of two years applies .

In contrast, the guarantee is on a voluntary basis and must be concluded by means of a so-called guarantee contract . The guarantee then exists in addition to the statutory guarantee. In the case of a guarantee, your customer can on the one hand make the rights stipulated in Section 443 (1) BGB regarding the guarantee effective as well as the services that you have worked out with the relevant customer in the guarantee contract.

In addition, Paragraph 477 of the German Civil Code ( BGB ) stipulates that the guarantee statements must be drawn up in the following form:

  1. The wording must be simple and easy to understand so that laypeople can understand the provisions of the guarantee granted.
  2. A notice regarding the legal rights of your customers must be included.
  3. The name and address of the guarantor (in this case you) must be clearly visible.
  4. The duration of the guarantee, the area of ​​validity and the guarantee cases granted must be clearly legible.

Tip: It’s best to find a lawyer who specializes in warranty and guarantee rights.

What rights do buyers and sellers have?

When the warranty you have to decide to what extent you have a right as a seller / manufacturer repair , a replacement or a refund grant to the purchase price. The situation is different with the warranty, which includes the following rights for the buyer:

  • Supplementary performance (§§ 437 No. 1, 439 BGB)
  • Withdrawal from the purchase contract (§§ 437 No. 2, 440, 323, 326 BGB)
  • Reduction of the purchase price (§§ 437 No. 2, 441 BGB)
  • Compensation for damages (§§ 437 No. 3, 440, 280, 281 BGB)

As a seller, you can either completely refuse a repair or you can date it to a period of usually 14 days.

What are the guarantee periods?

The guarantee periods are approximately 12 to 24 months , depending on your contractual agreements . Other terms may also apply in isolated cases. For example, Tupperware advertises with a lifetime guarantee and Samsung often with a ten-year guarantee. To have a rough idea of ​​your warranty periods, you will find some examples of different products below:

  • Mobile phone guarantee: The guarantee period for a mobile phone or smartphone is usually 24 months.
  • Guarantee on electrical appliances in the kitchen: Most manufacturers give a five-year guarantee on kitchen appliances. In the case of refrigerators or, for example, washing machines, the guarantee period can even last up to ten years.
  • Warranty for used cars: If a used car is offered by a commercial seller, the average warranty is one year.
  • Warranty for new cars: Car dealerships usually offer a warranty of two to five years.

It is important that you are not legally obliged to provide a guarantee. When people use the term “ legal guarantee ” in Germany, they usually mean the guarantee.

What do quality guarantee and durability guarantee mean?

With the quality guarantee, you promise your customers that the delivered goods are in perfect condition from the time they are handed over to the end of the agreed guarantee period. To protect yourself against very specific defects, you can divide the general quality guarantee into the following subcategories: the durability guarantee and the quality guarantee.

The differences at a glance

If you grant a quality guarantee, you assure your customers that the goods will have a specific quality until the expiry of the guarantee contract. This can be the shape and color of a piece of clothing, for example. Quality can be specified in the guarantee contract or advertised in advertising. So pay close attention to the slogans with which you want to market your goods.

The durability guarantee, on the other hand, ensures that your customers have a functioning product for the entire period of the guarantee period. The burden of proof lies with you from the beginning until the end of the guarantee period.

What types of guarantees are there?

In principle there are two types : the intercession guarantee and the warranty guarantee . While in the warranty guarantee the manufacturer is responsible for defects in the goods, in the intercession guarantee only the dealer (also known as the guarantor) is in the guarantee obligation.

Put simply, the intercession guarantee is a type of insurance (guarantor) that you take out with another person to cover possible damage. This type of guarantee is similar to the law of obligations and comes about primarily in international transactions. The guarantor is a credit institution, an insurance company, a parent company of your company or a government institution.

Furthermore, in order to prevent a kind of power struggle in international business or a party suffering severe economic damage, both the intercession guarantee and the warranty guarantee are divided into several subcategories.

Down payment guarantee, payment guarantee and co at a glance

Guarantee type What is it about?
Deposit guarantee The deposit guarantee or repayment guarantee is an assurance that the seller will refund the buyer’s deposit if the contract is not or only partially fulfilled.
Bid guarantee The bid guarantee guarantees that there will be a bad debt loss at an auction.
Bid guarantee In the case of the bid bond , the guarantor assumes the liability that the conditions of the tender are met. So it is an insurance for you if you take part in an advertisement from public bodies and are supposed to provide a corresponding service.
Performance guarantee The performance guarantee is the most important category for you as an entrepreneur. It assures the buyer that you will provide the service in accordance with the agreements.
Warranty guarantee The warranty covers all defects that appear within the warranty period.
Bills of lading guarantee The bill of lading guarantees a shipping company to take over any defects that have arisen on the part of the importer.
Delivery guarantee The delivery guarantee will look familiar to you as an entrepreneur. It guarantees that the goods will arrive on time, flawlessly and within the agreed period at the customer.
Rent guarantee As the name suggests, the rental guarantee is intended to ensure that the rental payments due arrive punctually and in full on the landlord’s account.
Contract performance guarantee The contract performance guarantee is intended to provide the client with security for the proper performance of the subject matter of the contract.
Payment guarantee The payment guarantee secures the settlement of the bills.
Customs guarantee The customs guarantee regulates the payment of customs duties to the relevant authorities.

Frequently asked questions about guarantee

When does the guarantee start and when does it apply?

The guarantee begins with the handover of the goods from the buyer to the seller. So already on the first day of delivery.

What is the difference between a guarantee and a warranty?

In contrast to the guarantee, the guarantee is strictly regulated by the legislator. The BGB states that the period as well as the scope and processing of the warranty are regulated. Whereas with regard to the guarantee, it is only mentioned in which form the guarantee contract must be written.

What is the guarantee?

The guarantee is a protection of the buyer in case of defects of a commodity to remain seated on the costs. The warranty allows you to request a new device or a repair from the manufacturer.

What is the guarantee?

The guarantee is a protection of the buyer to acquire defective goods. The warranty is assumed by the seller (not the manufacturer!). It applies to defects in the goods and is valid for an average of two years.

When does the guarantee apply to the car?

The extent to which the guarantee protects when buying a car depends on the agreements made. Usually the dealers or the manufacturers rule out common wear parts such as V-belts or tires. It is therefore important that the guarantee contract is always read carefully.

When will the money be paid back?

You will get your money back as soon as your application for guarantee is guaranteed and the manufacturer / seller cannot or does not want to carry out a repair or you request a refund of the purchase price. Many manufacturers are very flexible and customer-oriented when it comes to guarantee regulations.

When will I get a new device?

You will get a new device if your defective device cannot be repaired or the manufacturer provides a new product from the outset.

When does the guarantee expire?

The guarantee expires at the end of the guarantee period , which is usually between 12 and 24 months .

When does the car warranty expire?

The guarantee in a car goes out either at the end of the warranty period or after the insertion of replacement parts . Not all manufacturers give the same guarantee on subsequently installed spare parts, which is why you should always have information about the valid guarantees given to you in writing.

Why is there a guarantee?

The main purpose of the guarantee is to provide buyers with flawless products. It also strengthens customer loyalty and customer satisfaction .

What is the guarantee?

On the one hand, there is the warranty guarantee that applies to defective products. On the other hand, there is the intercession guarantee, which is more a surety than a guarantee.

What legal guarantee is there?

The term legal guarantee is understood to mean the guarantee that is laid down in the German Civil Code and is two years .

Conclusion

Although the guarantee is not required by law and you are not obliged to do so, it promotes good customer relationships. You can determine both the scope and duration of the guarantee yourself, which significantly reduces the financial risk for you and your company.

What is the guarantee