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Our Advice Sheets

Guarantees and warranties

In law, a guarantee is an agreement given by a trader to a consumer, without any extra charge, to repair, replace or refund on goods which do not meet the specifications set out in the guarantee. A warranty is an insurance policy which provides cover for the unexpected failure or breakdown of goods, usually after the manufacturer's or trader's guarantee has run out.

Guarantees and warranties are additional to the legal rights you have as a consumer and must not affect those rights in any way.

In the guide
What is a guarantee?
What is a warranty?
What legal protection do I get with warranties and guarantees?
What should I consider before I buy an extended warranty?
Some frequently asked questions

What is a guarantee?
In law, a guarantee is an agreement given by a trader to a consumer, without any extra charge, to repair, replace or refund goods that do not meet the specifications set out in the guarantee. A guarantee is usually issued by the manufacturer of goods or by a trader that provides goods as part of a service - replacement windows, for instance. Generally, a guarantee provider undertakes to carry out free repairs, for a set period of time, for problems that can be attributed to manufacturing defects.

An insurance backed guarantee provides the consumer with protection if the trader that provided the goods or service under guarantee ceases to trade and can no longer fulfil its obligations under the guarantee. The insurance company underwrites the terms of the guarantee for the remainder of the guarantee period.

A guarantee is additional to the legal rights you have as a consumer and must not affect those rights in any way.

What is a warranty?
A warranty (or extended warranty) is broadly defined in law as a contract for cover for goods, which is entered into by a consumer for (money) monetary consideration. A warranty is a form of insurance policy which provides cover for the unexpected failure or breakdown of goods, usually after the manufacturer's or trader's guarantee has run out. Some warranties are service contracts rather than insurance backed (you should check the status of the warranty before you purchase it) . Warranties can vary - they offer different protection, from the most basic cover to those which provide comprehensive cover. For instance, you may be covered only for the 'market value' of the goods, which means their second hand value after use or you may be covered 'new for old'. Do not assume that a warranty will provide cover for all problems encountered with the goods. They usually have exclusions that set limits on the cover you receive. 

A warranty or extended warranty is additional to the legal rights you have as a consumer and must not affect those rights in any way. 

What legal protection do I get with warranties and guarantees?
The Sale and Supply of Goods to Consumers Regulations 2002 states that if a guarantee provider offers a guarantee on goods sold or supplied to consumers, the provider takes on a contractual obligation to honour the conditions set out in the guarantee. For example, if the guarantee provider refuses to repair goods as set out under the terms of the guarantee, you can take legal action against the provider of the guarantee for breach of contract. This could be claiming back the cost of repairs if you have had them carried out elsewhere.

The guarantee should be written in English and the terms should be set out in plain intelligible language. The name and address of the guarantee provider, the duration of the guarantee and the location it covers must also be given. You have the right to ask the provider to make the guarantee available to you in writing or any other durable form available.

If you have a problem with an insurance backed extended warranty that was sold to you, and you have been unable to resolve it with the warranty provider, you are entitled to take your complaint to the Financial Ombudsman Service. For problems with non insurance backed extended warranties, contact the Citizens Advice consumer service.

The Supply of Extended Warranties on Domestic Electrical Goods Order 2005 requires traders that supply extended warranties on domestic electrical goods to provide consumers with certain information before the sale of the extended warranty.

Traders supplying this type of extended warranty are required to:

  • clearly display the price and duration of the warranty
  • make it clear that the warranty is optional
  • give you information on your statutory rights
  • inform you that the warranty does not have to be purchased at the time the goods are purchased
  • provide details of cancellation and termination rights
  • inform you that warranties may be available elsewhere
  • provide a statement on the financial protection consumers have if the provider of the extended warranty goes out of business
  • state whether or not the warranty will cease if a claim is made
  • inform you that your household insurance may be relevant to the purchase of the goods
  • give a quotation in writing and inform you that the quotation price is valid for at least 30 days if the warranty costs more than £20
  • allow you to cancel it within 45 days and get a refund if a claim has not been made and if the warranty that was supplied has an initial duration of more than one year
  • allow you to cancel it and receive a pro rata refund after 45 days even if a claim has been made and if the warranty that was supplied has an initial duration of more than one year

If insurance backed guarantees and warranties are marketed and sold at a distance - without face to face contact between the consumer and trader, such as online - the Financial Services (Distance Marketing) Regulations 2004 apply. These regulations cover the distance marketing of consumer financial services and specify the information that must be given to you before and after a contract is concluded. You have the right to cancel a financial services distance contract and the cancellation period for this type of insurance is 14 calendar days which runs from the day after the day the contract is concluded. Please see the 'Distance marketing of financial services - your rights' leaflet for more information.

Guarantees and warranties are in addition to the statutory rights you have under the Sale of Goods Act 1979 and the Supply of Goods and Services Act 1982. For more information on your rights when you buy goods or services see the leaflets 'Buying goods - your rights' and 'Buying services - your rights'.

What should I consider before I buy an extended warranty?

  • consider whether you actually need an extended warranty - for example, does your home insurance policy provide all the cover you need?
  • there are a wide variety of warranty providers, so shop around for the best warranty at the right price before you buy. You don't have to buy in-store at the same time as buying the accompanying product
  • be careful when purchasing extended warranties that are paid for on a monthly basis as long term these can be very expensive
  • watch out for high pressure selling of warranties at the point of sale
  • ensure you have clear information on the costs and the benefits of the warranty
  • it is important to find out what the warranty does not cover

Some frequently asked questions
Q. I bought a fridge/freezer 18 months ago and the freezer section has completely failed. I went back to the shop, but they refused to do anything as it was outside the original 12 month guarantee. What are my rights?
A. If the time limit has expired on the guarantee, you cannot make a claim. However, if you can show that the goods were not of satisfactory quality at the time of sale then you may have a claim against the trader under the Sale of Goods Act 1979. See the 'Buying goods - your rights' leaflet for more information.

Q. I had 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 didn't think this should have happened so soon. I complained to the company that carried out the work as I had been told it was covered by a ten year guarantee. However, the company claims that the original company went into liquidation and it is an entirely separate legal entity. It is refusing to honour the guarantee or carry out any remedial work unless I pay. Can they do this?
A. Your contract for the work and the guarantee was with the original limited company, and it is liable to you only for as long as it is trading. If it ceases trading or the premises have been taken over by another business, you cannot enforce the guarantee. If you paid for the work using a credit card or on finance arranged by the company, the finance provider may be equally liable (which means equally responsible) with the company under Section 75 of the Consumer Credit Act 1974. In this case, you could claim from the finance provider instead of the company. Some companies 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 that 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 for the lifetime of the guarantee. Check your guarantee carefully. See the 'I can't contact the trader - what can I do?' leaflet for more information.

Q. I bought a used car six weeks ago and the dealer persuaded me to buy a 12 month warranty. I thought that this would cover me for everything 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 the dealer won't pay for the repair. What are my rights?
A. With any warranty it is essential that you read the terms and conditions before you decide to buy it. The warranty company may be entitled to rely on this exclusion clause. You still have a contract with the dealer who sold you the car. You could argue that the dealer is in breach of contract and that under the Sale of Goods Act 1979 the car is not of satisfactory quality. See the 'Used motor vehicles - consumer rights' and 'Buying goods - your rights' leaflets for more information.

Q. I had a builder in to build a small extension last year. He told me that all his work was 'guaranteed' but I 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 said: 'What guarantee?' What rights do I have against him?
A. This shows the importance of getting a written guarantee. Without this, it is impossible to prove that you were offered a guarantee, or indeed, what the extent of the cover might be. Remember that you have a contract with the builder under the Supply of Goods and Services Act 1982 and he should have carried out the work with reasonable care and skill. See the 'Buying services - your rights' leaflet for more information.

Q.I bought a new motorbike last year that 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 re-painting and re-chroming 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 brand, I am very annoyed. What should I do?
A.Even though you did not pay for it, the guarantee provider takes on a contractual obligation to honour the terms of the guarantee under the Sale and Supply of Goods to Consumers Regulations 2002. You are entitled to take legal action against the manufacturer. You can also complain to the dealer who you bought the motorbike from as you have rights under the Sale of Goods Act 1979 if the motorbike is not of satisfactory quality. If you paid for the motorbike on your credit card or on finance arranged by the dealer see the 'Your rights when buying on credit' leaflet and the 'Buying a motorcycle' leaflet for more information.

Q. I've heard that under European Union (EU) law I'm allowed a two year minimum guarantee on goods. Is that correct?
A. EU Directive 1999/44/EC states that all European Union member states must allow consumers to make a claim for faulty or misdescribed goods under their consumer rights for a minimum of two years. English law already allows you to make a claim for up to six years from the date you bought the goods and for up to five years in Scotland. Therefore if you buy any goods from any other EU member state, you can assume that you can make a claim for faulty or misdescribed goods for at least two years after. See the 'Buying goods - your rights' leaflet for more information.

Q. I bought an extended insurance backed warranty online. I have changed my mind and want to cancel. What can I do?
A. You have the right to cancel within 14 calendar days from the day after the day you bought the warranty. You should check the website for details of how you can exercise your right to cancel and then inform the supplier. The supplier must refund your money within 30 calendar days from the day you cancelled.

Q. I think that the trader deliberately misled me over the guarantee. What can I do?
A. The trader may have breached the Consumer Protection from Unfair Trading Regulations 2008 which prohibits traders from engaging in unfair trading practices. You should contact the Citizens Advice consumer service, which will be able to advise you, as well as referring your case to trading standards for further investigation.

Please note
This leaflet is not an authoritative interpretation of the law and is intended only for guidance. Any legislation referred to, while still current, may have been amended from the form in which it was originally enacted.

For further information please contact the Citizens Advice consumer service, which provides free, confidential and impartial advice on consumer issues. Visit www.adviceguide.org.uk or call the Citizens Advice consumer helpline on 03454 040506.

Relevant legislation
Consumer Credit Act 1974
Sale of Goods Act 1979
Supply of Goods and Services Act 1982
Sale and Supply of Goods to Consumers Regulations 2002
Supply of Extended Warranties on Domestic Electrical Goods Order 2005
Consumer Protection from Unfair Trading Regulations 2008
Financial Services (Distance Marketing) Regulations 2004

Last reviewed/updated: July 2013

 

 

 

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This page was last edited on 21/07/14