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Warranty and GuaranteeWarranties and Guarantees
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Welcome to my informational
compendium site about
Warranties and Guarantees
What is a
Warranty and how does it
differ from a Guarantee?
Important words developed below on this website: Warranty Guarantee Warranties Guarantees Implied, Express, Full, Limited, Information, Disclaimer, Dispute Settlement, Consumer Responsibilities, Service, Extended, Service Contracts, Financing, Repairs, Expensive, Investment, Coverage, Breach, Legal, Representation, Car, Securities, Disadvantages, Considerations, Misrepresentation, Disclosure, Mistake Enforceability, Money Back, Terms, Conditions, Buyback, You can find this site again by typing in the Google search engine the unique word " 1ytnarraW " which is OR " Warranty1 " backwards. There are 16,026 Words on the very large website. |
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Contact information for
this Website: Brian Nelson, Webpage Marketing Consultant 31 Gessner Rd. Houston, TX 01/05/2007 04:24 PM -0600 713-467-3025 Fax 713-467-3192 Click: E-mail me |
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| Misspelled words used to find this page 1 of 7.warranty, warrant, wharlente, wharrente, wrrant, warrnt, warrat, warlente, wallente, warrente, walrente, warente, waliant, warand, wallante, wharrante, walent, wharrent, whalrant, warriand, warant, wharante, wharlent, wharent, whalant, wariand, warriant, wharriante, whalent, walrent, whalriant, wharrand, wariant, walrante, wallent, whalrent, walrand, wharand, wharrant, walante, whallent, warlant, waland, wharriand, wharant, walriante, warrante, wharlant, walriand, walrant, wharriant, whalrante, warante, wallant, whalrand, walant, whariant, warlante, warriante, whallant, warrent, walriant, warrand, wharlante, wariante, warlent, warent, wharlentie, warrentie, warrandie, warraty, wallentie, warentie, warandie, warrany, warrantee, wharrentie, warriandie, warrantie, walrentie, wharrandie, warantie, warlantie, walrantie, warriantie, wharlantie, walantie, wariantie, wallantie, walriantie, wharrantie, warlentie, whalrantie, wharantie, wrranty, walentie, walrandie, wharriantie, warrnty, walanty, guarantee, garandea, gariandee, garentee, garentea, garantee, garantea, gariantee, gariantea, garandee, guaranee, guilente, guariande, garante, guirande, gariante, gualante, garande, gualiante, garente, gualande, guarante, gurantee, guarente, guariante, guaantee, guirente, guirante, guarntee, guilante, guiriante, guaratee, gualente, guarande, gualiantea, guarandea, gualentee, gualandee, guariandee, guarantea, gualentea, gualandea, guariandea, guariantee, guilentee, gualiandee, guirandee, guariantea, guilentea, guarentee, guirandea, guirantee, guarentea, guiriandee, guirantea, guirentee, gualantee, guiriantee, guirentea, gualantea, guiriantea, guilantee, gualiantee, guarandee, guilantea, galantee, galante, galantea, galentee, galente, galentea, guilandee, guiliantee, guarant3, guaramt3, guaranete, guaratnee, guarnatee, guaarntee, guraantee, gaurantee, ugarantee, warandeis, |
Warranty Guarantee Warranties Guarantees Implied, Express, Full, Limited, Information, Disclaimer, Dispute Settlement, Consumer Responsibilities, Service, Extended, Service Contracts, Financing, Repairs, Expensive, Investment, Coverage, Breach, Legal, Representation, Car, Securities, Disadvantages, Considerations, Misrepresentation, Disclosure, Mistake Enforceability, Money Back, Terms, Conditions, Buyback,
Warranties and Guarantees1Suppose you bought a new boat and found that it would not float, or a new washing machine and discovered it would not wash clothes. If neither carried a written warranty or guarantee, what would you do? Even though the boat and washing machine had no written warranty, they are covered by an implied warranty. The store is legally obligated to do one of three things -- repair the defective merchandise, replace it or refund your money. A warranty and a guarantee are the same thing. However, "warranty" is the preferred term. A warranty is a promise of quality given by the seller or manufacturer of a product to the buyer at the time of the sale. Often sellers and buyers view warranties differently. Many consumers accept the term "warranty" without thinking about it. They assume that it is an assurance of quality. They do not focus on the coverage until there is a problem with the purchase. Some sellers see warranties as a promotional device or as a way to limit their responsibilities. Others see warranties as a way to assure their customers of quality and avoid misunderstandings. Historically, the warranty evolved as a part of the bargaining process between buyer and seller. In recent years the obligations of the seller have been precisely spelled out in the Uniform Commercial Code and through the Magnuson-Moss Warranty Act. The Uniform Commercial Code recognizes two basic types of warranties -- implied and express. The Magnuson-Moss Warranty Act spells out conditions involved in the written or express warranty. The Implied WarrantyImplied warranties are promises that are legally in effect even though they are not in written form. Any ethical and responsible manufacturer or retailer will honor them. Implied warranties include the following provisions:
Implied warranties are legally valid. If they are not met, the merchant or manufacturer usually will either refund your money or exchange the merchandise. They are most often honored on recently purchased new items. They do not provide much recourse over a longer period of time because it is legally difficult to determine what is a "reasonable expectation" over a "reasonable period of time." The Express WarrantyExpress warranties are written warranties. Until the Magnuson-Moss Warranty Act was passed in July 1975, it was not always easy to know exactly what the terms of a warranty really meant. This law does not require a company to give a written warranty. It was designed to simplify and organize the rights guaranteed in any written warranty so that it could be easily and clearly understood by the consumer. Some parts of the Act became effective in 1976 and other parts in 1977. Written warranties must now be in one of two forms, "full" or "limited." They must be clearly labeled as such.
Information in an Express WarrantyThe express warranty must be written in simple language and disclose all terms. The Federal Trade Commission (FTC) has issued disclosure rules which apply to all written warranties for consumer products that cost more than $25. These include:
Disclaiming implied warranties is prohibited. Warranties may be limited in duration but not disclaimed. Pre-Sale Warranty InformationA shopper must be given the opportunity to see the warranty before buying the product. This is important because the warranty should be a major consideration in product selection. A retailer can use any one of several methods to make the warranty information available for a shopper to see. A copy of the warranty can be on display. A sign can be used to tell shoppers that they can see the warranty upon request. Or, the warranty can be attached to or printed on the item's carton or box. The Magnuson-Moss Warranty Act also applies to mail orders, catalogs and door-to-door sales. In a catalog or other mail order advertising, the text of the warranty should be placed next to the description of a product or a statement included that a copy of the warranty is available upon request. Door-to-door salespersons must tell their prospective customers that copies of the warranties can be inspected at any time during their presentation. Dispute SettlementA unique aspect of the warranty law is that it recognizes the problems and expenses which consumers have sometimes had in resolving disputes. For this reason the legislation encourages the establishment of an informal and independent process to quickly, fairly and inexpensively resolve disputes. The law does not spell out what kind of dispute handling process should be established, but it does establish minimum requirements for the process, including record-keeping, investigative processes and audits. FTC rules establish the duties of the warrantors who decide to incorporate the dispute settlement process into the terms of their warranties. These require that the warrantor using a dispute-handling process must disclose this information in the written warranty.
Other CoverageClass action suits. The Magnuson-Moss Warranty Act provides legal rights when the warranty is not honored. In some cases consumers can use a "class action" suit when individual action would be too costly. The courts have been given the right to award payments, attorney's fees and other costs to the winning party. Consumer ResponsibilitiesThe consumer has obligations, too. If you do not live up to your end of the bargain, the warranty will be worthless. Some of your obligations are:
Improving Warranty ServiceThe quality of warranty service depends on who has control over the service, the availability of replacement parts and the skill of the repairmen. From the consumer's point of view, probably the best solution is for the warrantor to have complete control over the warranty service operation. Some large companies have this control. These companies have a strong incentive to provide satisfactory service. Even under these conditions there will still be variations in the quality of service. Decentralized factory service facilities make it easy for consumers to return merchandise and communicate complaints. This type of service is very costly to the company and requires strong, high-level administrative ability. Less satisfactory from the consumer's point of view are warranties that require the product to be returned to the manufacturer for centralized factory service. Such service is not limited by cost or administrative ability but rather by the nature of the product. For example, who wants to send hard-to-pack items back to the manufacturer? If the warrantor cannot provide either of these options, he must rely on a type of service over which he has less control. This may be the dealer who sold the merchandise, or an independent organization specializing in providing service. If the dealer holds an exclusive franchise for the sale of the product (for example, automobile dealerships), the warrantor has more control. Policing the warranty standards may involve considerable administrative costs and authority which the manufacturer may or may not be able to afford or desire. If the dealer sells many competing brands the warrantor has very little control over the quality of service. The way the servicing organization is paid often influences the quality of the warranty service. There is considerable opportunity for conflict between the warrantor and servicing agent over fair payment and the record-keeping. Look for the FactsBefore buying, compare warranties of competing products. Look for answers to the following questions. Then choose the warranty that offers you the best protection:
Warranty information must be available to consumers in a form that is easy to read and understand. However, it is the consumer's responsibility to read and use this information in comparative shopping. It is up to the consumer to understand the terms of the warranties before buying and to buy only from reputable sellers. A well-written warranty is of little value if the company giving the warranty has disappeared when service is needed. A reputable seller, a responsible consumer, and plain human decency on the part of both the seller and buyer are the ingredients for a satisfactory sales transaction. |
| Misspelled words used to find this page 2 of 7 walriantius, wharranteis, wharrantius, warranties, wharlenteis, wharlanteis, wharrenties, walrandies, walanties, warlentius, warriandies, whalrantius, wharanties, wharantius, warranteis, whalenties, wallanties, wharrenteis, walrandeis, walanteis, walentius, warriandeis, walrandius, wharanteis, wharriantius, waranties, wallenties, wallanteis, wharenties, walandies, walrianties, wharlentius, wariandies, warrentius, wharrianties, warrandius, waranteis, wallenteis, whallanties, walrenties, walriandies, walrianteis, wallentius, wharrandies, warentius, wharrianteis, warandius, warrianties, whallenties, warlenties, walrenteis, whalrandies, walianties, wharrandeis, wharrentius, wharianties, warriandius, warrianteis, warrantius, warlenteis, whalrenties, warrenties, whalranties, wharandies, walrentius, warrandies, wharrandius, warianties, warantius, walenties, warlanties, warrenteis, whalranteis, wharriandies, warlantius, warrandeis, walrantius, warianteis, warriantius, walenteis, warlanteis, warenties, whalanties, walranties, wharlantius, warandies, walantius, wharranties, wariantius, wharlenties, wharlanties, warenteis, whalrianties, walranteis, wallantius, warrantis, wrranties, warrnties, warraties, guarantee, garandea, gariandee, garentee, garentea, garantee, garantea, gariantee, gariantea, garandee, guaranee, guilente, guariande, garante, guirande, gariante, gualante, garande, gualiante, garente, gualande, guarante, gurantee, guarente, guariante, guaantee, guirente, guirante, guarntee, guilante, guiriante, guaratee, gualente, guarande, gualiantea, guarandea, gualentee, gualandee, guariandee, guarantea, gualentea, gualandea, guariandea, guariantee, guilentee, gualiandee, guirandee, guariantea, guilentea, guarentee, guirandea, guirantee, guarentea, guiriandee, guirantea, guirentee, gualantee, guiriantee, guirentea, gualantea, guiriantea, guilantee, gualiantee, guarandee, guilantea, galantee, galante, galantea, galentee, galente, galentea, guilandee, guiliantee, guiriantees, guarantees, garandes, guilentes, guirentes, gualandees, guirandeas, guirianteas, guaranteas, gariandees, garantees, guilantees, gualandeas, guirandes, guiriantes, guarantes, garentees, garanteas, guilanteas, gualandes, guiriandees, guarandees, guariantees, garenteas, garantes, guilantes, gualiandees,implied, iplied, imlied, impied, impled, implid, impleid, impried, impreid, 1np11ed, 1npl1ed, inplied, implide, impiled, imlpied, ipmlied, miplied, implie, mplied, express, expless, expres, exples, epress, exress, expess, exprss, 3xpr3s, exprses, experss, exrpess, epxress, xepress, full, |
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| Misspelled words used to find this page 3 of 7 fill, furl, ful, fle, fel, fil, fur, f1, ph1, fu1, flul, ufll, limited, limitd, limeted, rimeted, limetted, rimetted, lmited, liited, limted, limied, rimited, rimetght, limite, limeght, limette, rimeght, rimite, rimette, limete, rimete, limight, limetght, rimight, 11n1ted, l1n1ted, linited, limitde, limietd, limtied, liimted, lmiited, ilmited, imited, information, informatin, informatiom, infolmatiom, iformation, inormation, infrmation, infomation, inforation, informtion, informaion, informasion, infolmasion, informaton, informashun, informashon, infolmation, infolmaton, infolmashun, infolmashon, iegnfolmatiom, iegnformachun, eignfolmasion, eignformachon, iegnformaton, iegnfolmachun, eignformatiom, eignfolmachon, iegnfolmaton, iegnformashon, eignfolmatiom, eignformachun, iegnfolmashon, eignformaton, eignfolmachun, informachon, iegnformashun, eignfolmaton, eignformashon, infolmachon, iegnfolmashun, iegnformation, eignfolmashon, informachun, iegnformasion, iegnfolmation, eignformashun, infolmachun, iegnfolmasion, iegnformachon, eignfolmashun, eignformation, iegnformatiom, iegnfolmachon, eignformasion, eignfolmation, inphormashon, iegnphormation, eignphormation, inpholmashon, iegnpholmation, eignpholmation, inphormashun, iegnphormachon, eignphormachon, inpholmashun, inphormation, iegnphormachun, eignphormachun, inphormasion, inpholmation, iegnphormashon, eignphormashon, inpholmasion, inphormachon, iegnphormashun, eignphormashun, inphormatiom, inpholmachon, iegnphormasion, eignphormasion, inpholmatiom, inphormachun, iegnphormatiom, eignphormatiom, inphormaton, inpholmachun, iegnphormaton, eignphormaton, inpholmaton, informaio, eignpholmatio, informatio, informato, iegnphormatio, infolmatio, iegnpholmatio, eignformatio, iformatio, eignfolmatio, disclaimer, desclaimor, disclaier, descliamor, disclaimr, descraimor, disclaimor, discliamor, dsclaimer, dysclaimor, diclaimer, dyscliamor, dislaimer, discraimor, discaimer, discriamor, disclimer, dyscraimor, disclamer, descriamer, discliamel, desclaimel, dysclaimel, discliamer, descliamel, dyscliamel, dysclaimer, descraimel, discraimel, dyscliamer, discriamel, discraimer, dyscraimel, discriamer, desclaimer, dyscraimer, descliamer, dyscriamer, descraimer, disclaimel, d1sc1a1ner, d1scla1ner, disclainer, disclainre, disclaimre, disclaiemr, disclamier, discalimer, dislcaimer, dicslaimer, dsiclaimer, idsclaimer, disclaime, isclaimer, dispute, dyspught, despught, dspute, dipute, disute, dispte, dispue, dispught, dyspute, despute, d1spute, dispuet, disptue, disupte, dipsute, dsipute, idspute, disput, ispute, settlement, sttlement, settement, settlment, settleent, settlemnt, settlemet, settlemeignt, setelmiegnt, settelmeignt, setremiegnt, settremeignt, setlemeignt, setelmeignt, setremeignt, settlemiegnt, settelmiegnt, settremiegnt, setlemiegnt, setelmant, settremant, settelment, |
Warranty, no guarantee
Having three major car repairs within a month is just plain bad luck. But Lisa Deptula of Odessa didn't sweat it because she had spent $2,500 for insurance against such misfortune. When she showed her Warranty Gold contract to her repairman at the end of July, however, she found her luck had run out. The company that bills itself as "the No. 1 online marketer of affordable extended warranties for your car, truck or sport utility vehicle" was no longer paying repair bills as promised for thousands of vehicle owners. By the end of August, Lisa and her husband were out $2,250 in repairs for their 1999 Daewoo Leganza and 2000 Ford Windstar. "They basically said, "That's too bad. If and when this gets straightened out, you might get your money back,' " Deptula said. "We weren't taking any more chances. We traded both cars in." The mess Warranty Gold says it's trying to straighten out was the collapse in June of National Warranty Insurance Group, a company in the Cayman Islands with U.S. headquarters in Nebraska. Over 20 years, National Warranty, which is now in liquidation, has insured up to 1-million warranties through about a dozen warranty companies, including Warranty Gold of Austin, Texas. Analyst company A.M. Best estimated that unpaid claims by National Warranty could exceed $60-million. The case raises new questions for consumers about the reliability of extended warranties, a big business with limited regulation. The $10-billion auto service warranty industry sells more than 8.7-million contracts a year, according to Universal Underwriters Group. Consumer advocates say to check carefully before buying an auto warranty that doesn't come directly from the vehicle's manufacturer. Some say to stay away from such policies altogether. Warranty Gold, which has sold more than 65,000 warranties since 1996, says it, too, was a victim of National Warranty's collapse. "We're talking about a company that has been in business for 20 years," Warranty Gold general manager Kurt Nelson said. "In March, they were given an A- rating by A.M. Best. All of a sudden, 60 days later, they're in liquidation. We just think that's very unusual." On June 9, two days after Warranty Gold learned National Warranty was headed for liquidation, it switched to a different insurer and went right on selling policies. (The company says it's not selling currently in Florida, though, until the company confirms that its new insurance administrator meets the state's standards.) Warranty Gold manager Nelson said it has raised prices by 25 to 30 percent to put more into reserves. Warranty Gold's Web site tells new buyers that it now insures policies through two separate administrators to guarantee claims. "The warranty is only as good as the financial status of the company that issues it," the marketer's Web site assures new customers. "Warranty Gold doesn't gamble with our customer's money." That's little solace for Warranty Gold's past customers. The company has just begun informing those customers that their warranties aren't still as good as gold. "In hindsight," Nelson said, "we should have done a better job of communicating to our consumers." Its advice to them now: Hold the policies, file the claims for necessary repairs and hope to be reimbursed. Or cancel the policies and wait for a prorated refund if funds held by National Warranty become available through the courts. But paying for an expensive fix-it job is not an option for everyone. When a bad oil pump led to engine failure and a $5,000 repair bill for Frank Pirillo's 2000 Bonneville, the Lakeland resident left it sitting it at the dealership. "This is after I paid for a $1,000 repair a week earlier with the hopes of one day getting reimbursed," said Pirillo, who spent $1,354 for a seven-year, 100,000-mile Warranty Gold contract in July 2000. "I will not pay upfront on this repair." Warranty Gold recently started a Web site, www.WarrantyNews.com to state its case. The company maintains its lawyers are fighting hard to get back as much of its customers' money as possible. "We're working diligently every day to get a portion of those funds to make sure our customers will be taken care of," Nelson said. "But at this point, we just honestly don't know." While a judge in the Cayman Islands released an undisclosed amount from a National Warranty escrow account in a Sept. 5 ruling, Nelson said that money is still tied up. Las Vegas lawyer Robert Gerard has filed a class action lawsuit against a number of organizations that were connected with National Warranty, including A.M. Best, legal and financial services company KPMG and international accounting firm Deloitte Touche and Tohmatsu. Gerard said he thinks National Warranty has $75-million in reserves, enough money to honor the pending contracts. Gerard said more than 600 warranty holders have contacted him about the lawsuit. Warranty Gold is not named as a defendant in the suit. As the legal maneuvering drags on, those who feel duped or abandoned by Warranty Gold are flooding automotive Web sites with complaints. Since June 6, there have been more than 450 messages posted to the Warranty Gold discussion board at Edmunds.com, an automotive information Web site. Those who are posting messages commiserate about their plight and share stories about how little progress they made in complaining to the company, regulators and consumer groups. One frustrated participant wrote: "If anyone is ever ever ever considering a third party warranty again, please call your shrink and get some meds. NO OFFENSE! I will never get one again." Not all of the Warranty Gold's old customers are that disillusioned with extended warranties or with the company. Steve Miller of Madeira Beach, a retired computer analyst, was so pleased with the service he got from the five-year warranty he bought for his 1996 Chrysler convertible that he paid $1,428 for another three years with Warranty Gold. "I collected way more from the first warranty than I paid for it," Miller said. "When I bought the second one, I asked the salesman if they were making any money on the things." Now that he's waiting to be reimbursed for an $800 oil leak repair, he's trying to be understanding. "Although the contracts read as though Warranty Gold is responsible for my warranty, I don't think they're an evil company," Miller said. "They simply don't have the money because they gave it to these other guys. I don't want to see them go out of business, but I will do what I can to get my money back." - Benita Newton can be reached at bnewton@sptimes.com or 727 893-8318. Considering an extended warranty? J. Robert Hunter's advice for buying extended auto warranties: Don't. The director of insurance for the Consumer Federation of America said the industry is not well-regulated, and there's not enough solid data available to judge the strength of the warranty companies. "It's too hard to tell the good ones from the bad ones," said Hunter, who recommends simply saving money to pay for unexpected repairs. "It's just sort of a big mess." Automotive Web site Edmunds.com recommends checking the reliability record of a car before buying it, then considering a manufacturer's warranty first, if one is available, even though extended warranties backed by major automakers are usually more expensive. The site advises consumers to check the financial strength of third-party warranties through analysts such as A.M. Best or Standard & Poor. But A.M. Best awarded one of its highest ratings to National Warranty Insurance Group only months before that leading backer of extended warranties went into liquidation. |
| Misspelled words used to find this page 4 of 7 setremant, setlement, setelment, settrement, setrement, settlemant, settelmant, setlemant, s3t13n3mt, s3t13m3mt, s3t13m3nt, set1ement, settlemetn, settlemnet, settleemnt, settlmeent, setltement, stetlement, esttlement, consume, consumer, cosumer, conumer, consmer, consuer, consumr, consumor, cnsumer, consumel, cnsume, cosume, conume, consme, consue, consumre, comsumer, consuemr, consmuer, conusmer, cosnumer, cnosumer, ocnsumer, onsumer, responsibiriteis, lesponsibirities, responsibiliteis, lesponsibiriteis, responsibylities, responsibilitius, responsibyliteis, responsibylitius, lesponsibilities, responsibiritius, lesponsibiliteis, lesponsibilitius, lesponsibylities, lesponsibylitius, lesponsibyliteis, lesponsibiritius, responsibirities, responsibilities, rsponsibilities, lesponsibulitius, responsibilties, reponsibilities, responsibiliies, resonsibilities, responsibilites, respnsibilities, responsibilitis, resposibilities, responsibulities, responibilities, responsibuliteis, responsbilities, lesponsibulities, responsiilities, lesponsibuliteis, responsiblities, responsibulitius, responsibiities, respons1b111t1es, respons1b1l1t1es, respomsibilities, responsibilitise, responsibiliites, responsibiltiies, responsibiilties, responsibliities, responsiiblities, responsbiilities, responisbilities, resposnibilities, respnosibilities, resopnsibilities, repsonsibilities, rseponsibilities, ersponsibilities, responsibilitie, esponsibilities, service, srvice, sevice, servce, servie, selvice, servise, selvise, servic, selvic, servik, selvik, serice, selice, serise, selise, serv1ce, serviec, servcie, serivce, sevrice, srevice, esrvice, ervice, extended, etended, exended, extnded, exteded, extened, extendd, extende, exteignde, extiegnde, etende, exende, extnde, extede, extene, extemded, extendde, extenedd, extedned, extneded, exetnded, etxended, xetended, xtended, service, srvice, sevice, servce, servie, selvice, servise, selvise, servic, selvic, servik, selvik, serice, selice, serise, selise, serv1ce, serviec, servcie, serivce, sevrice, srevice, esrvice, ervice, contract, cntract, cotract, conract, contact, contrct, contrat, contlact, contlacts, contacts, contracts, cntacts, cotacts, conacts, contcts, contats, contacs, cntracts, cotracts, conracts, contrcts, contrats, contracs, contrax, contlax, contax, comtracts, contracst, contratcs, contrcats, contarcts, conrtacts, cotnracts, cnotracts, ocntracts, ontracts, finansint, financing, phinansing, fnancing, phinansint, fiancing, phenansing, finncing, phenansint, finacing, finaning, financng, financig, finansing, phenanciegnt, pheignancint, feignancing, phiegnancint, fiegnancing, feignansing, feignanciegng, fiegnansing, phenanceigng, |
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Warranty In commercial and consumer transactions, a warranty is an obligation that an article or service sold is as factually stated or legally implied by the seller, and that often provides for a specific remedy such as repair or replacement in the event the article or service fails to meet the warranty. A breach of warranty occurs when the promise is broken, i.e., a product is defective or not as should be expected by a reasonable buyer. In business and legal transactions, a warranty is an assurance by one party to the other party that certain facts or conditions are true or will happen; the other party is permitted to rely on that assurance and seek some type of remedy if it is not true or followed. In real estate transactions, warranty deed is a promise that the buyer's title to a parcel of land will be defended. A warranty may be express or implied. [edit] Express warrantyAn express warranty is typically a guarantee from the seller of a product that specifies the extent to which the quality or performance of the product is assured and states the conditions under which the product can be returned, replaced, or repaired. It is often given in the form of a specific, written "Warranty" document. However, a warranty may also arise by operation of law based upon the seller's description of the goods, and perhaps their source and quality, and any material deviation from that specification would violate the guarantee. For example, an advertisement describing a product is often full of express warranties; the product must substantially conform to what is advertised. Many advertisers insert disclaimers for this purpose (e.g., "actual color/mileage/results may vary", or "not shown actual size"). Commonly, written warranties will assure the buyer that an article is of good quality and against defects in "materials and workmanship." A warranty may also apply to services that are sold. For example, an automobile repair shop may guarantee its repair for a period of 90 days. An express warranty can be made orally, in writing and without the intent of the seller to actually create the warranty. However, a seller is allowed to assert statements of opinion of value, known as puffery, that the buyer cannot justly rely on as part of the basis for the bargain. For instance, "This hunting knife is the best knife in the world" is mere puffery, whereas a statement such as "This hunting knife will never need to be sharpened" can be construed to be an express warranty as long as the knife is only used for its intended purpose. The misuse of a famous trademark may also create an express warranty, the violation of which is called "passing off"; the source and quality of the goods is misrepresented. [edit] Implied warrantyAn implied warranty is one that arises from the nature of the transaction, and the inherent understanding by the buyer, rather than from the express representations of the seller. The warranty of merchantability is implied, unless expressly disclaimed by name, or the sale is identified with the phrase "as is" or "with all faults." To be "merchantable", the goods must reasonably conform to an ordinary buyer's expectations, i.e., they are what they say they are. For example, a fruit that looks and smells good but has hidden defects would violate the implied warranty of merchantability if its quality does not meet the standards for such fruit "as passes ordinarily in the trade". In Massachusetts consumer protection law, it is illegal to disclaim this warranty on household goods sold to consumers. The warranty of fitness for a particular purpose is implied when a buyer relies upon the seller to select the goods to fit a specific request. For example, this warranty is violated when a buyer asks a mechanic to provide snow tires and receives tires that are unsafe to use in snow. This implied warranty can also be expressly disclaimed by name, thereby shifting the risk of unfitness back to the buyer. Another implied warranty is the warranty of title, which implies that the seller of goods has the right to sell them (e.g., they are not stolen, or patent infringements, or already sold to someone else). This theoretically saves a buyer from having to "pay twice" for a product, if it is confiscated by the rightful owner, but only if the seller can be found and makes restitution. [edit] Breach of warrantyA warranty is violated when the promise is broken; when goods are not as should be expected, at the time the sale occurs, whether or not the defect is apparent. The seller should honor the warranty by making a timely refund, repair, or replacement. The sale starts the time under the statute of limitations for starting a court complaint for breach of warranty if the seller refuses to honor the warranty. This period is often overlooked where there is an "extended warranty" in which a seller or manufacturer contracts to provide the additional service of replacing or repairing goods that fail within the extended period. However, if the goods were defective at the time of sale, and the relevant statute of limitations has not expired, then existence or duration of any "extended warranty" is secondary: there was a breach of a primary warranty for which the seller may be liable. It could be an unfair and deceptive business practice (a statutory type of fraud) to attempt to avoid liability for breach of a primary warranty by claiming expiration of the irrelevant extended warranty. A statute of limitations on a contract claim may be shorter (or longer) than that of a tort claim, and some breach of warranty cases are filed late and are characterized as a fraud or other related tort. For example, a consumer buys an item that was discovered to be broken or missing pieces before it was even taken out of the package. This is a defective product and can be returned to the seller for refund or replacement, regardless of what the seller's "returns policy" might state (with limited exceptions for second-hand or "as is" sales), even if the problem wasn't discovered until after the "extended warranty" expired. Similarly, if the product fails prematurely, it may have been defective when it was sold and could then be returned for a refund or replacement. If the seller dishonors the warranty, then a contract claim can be started in court.
[edit] Extended warrantyIn retail business, a warranty (or "extended warranty") commonly refers to a guarantee of the reliability of a product under conditions of ordinary use. It is called "extended" warranty because it covers defects that could arise some time after the date of sale. Should the product malfunction within a stipulated amount of time after the purchase, the manufacturer or distributor is typically required to provide the customer with a replacement, repair, or refund. Such warranties usually do not cover "acts of God", owner abuse, malicious destruction, commercial use, or anything, for that matter, outside of a mechanical failure incurred with normal personal usage. Most warranties exclude parts that normally wear out, and supplies that must be periodically replaced as they are normally used up (e.g., tires and lubrication on a vehicle). An extended warranty may be included in the purchase price, or optionally extended for an additional fee, and may be for some ambiguous ordinary "lifetime" of the product (not the customer). A manufacturer or distributor may be required to carry reserve funds on its financial balance sheet to cover potential services or refunds that may arise for any products still covered "under warranty". There are also third-party warranty providers who sell optional "extended warranty" contracts on certain products, which amount to having an insurance contract for the product. These third parties range from well known store chains, such as Best Buy and Circuit City, to independent, often underwritten companies such as Warranty Direct. As with other types of insurance, the companies are gambling that the products will be reliable, that the warranty will be forgotten or voided, or that any claims made can be handled inexpensively. Many people do not realize that extended warranties are not always provided through the manufacturer, but in some circumstances it may work to the consumer's benefit. For instance, when an auto warranty is provided through a dealership from the manufacturer, repairs on the vehicle are reimbursed at a lower negotiated rate. Some mechanics might fraudulently attempt to defer the needed repair until the warranty has expired so that the ordinary (higher) shop rate will apply. The third party warranty, while often more expensive, can be worth the price difference because it will cover the higher shop rate as well, and may even permit the customer to select a different mechanic outside the dealership. [edit] Legal Aspects of Warranties and DisclaimersIn the United States, the rights and remedies of buyers and sellers of goods are governed by the Article 2 of Uniform Commercial Code (UCC) as it has been adopted with variations from state to state. The UCC governs both express and implied warranties. It also covers the extent to which sellers may disclaim certain types of warranties (e.g., warranty of merchantability or fitness for a particular purpose, or even disclaim all warranties in the case of goods sold "as is." Whereas in the U.S. warranties are generally provided in writing subject to control of the laws, in other countries warranties may be governed by specific statutes. For example, a country's law may provide that goods are assured by the seller for a period of 12 months and may provide other specific rights and remedies in the event of a product failure. However, even in the U.S. there are specific laws that may provide warranties or warranty-like assurances to buyers. For example, many states have statutory warranties on new home construction, and many have so-called "lemon laws" governing new motor vehicles with repeated defects. [edit] "Representations and Warranties"In complex commercial transactions, buyers and sellers may make specific representations and warranties to each other. In common parlance, these are known as "reps and warranties." These are statements by which one party gives certain assurances to the other, and on which the other party may rely. In this context, a representation is commonly a declaration of a specific fact that can be verified to be true or not, e.g., "seller represents that it is a corporation duly organized and validly existing under the laws of the state of Delaware." Here, a warranty may be more of an assurance, e.g. "supplier warrants that all of its employees working on this project will be subject to confidentiality agreements that include the ability of supplier to seek injunctive relief for breach." Often there are specific remedies or consequences specified if the representations and warranties are not accurate or are not fulfilled. For example, a seller may represent and warrant that is has full ownership title in the item being sold, and that there is no legal impediment to the seller proceeding with the transaction. Should it turn out that the seller did not have complete title or was subject to another agreement that restricted the sale, and should these facts impact the buyer's ownership or cause it expense, the buyer would have remedies under the agreement to seek relief from the seller. Parties to these transactions typically seek representations and warranties to cover issues over which they are concerned. Because of the consequences of making representations and warranties, parties will typically try to limit the extent of any that they make. The tension between these two points of view will help to shape the negotiations between the parties as to the terms and conditions of the deal. [edit] Car warrantyA car warranty extends from a minimal 1 year, more common 3 year and extended 5 years (Lexus offer a 5 year warranty, by default). |
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Company limited by guaranteeIn British or Irish company law, a Limited Company is a 'person' on its own right. This means it can own property (such as a freehold or leasehold) and enter into contracts in its own name. It exists independently and separately from the people involved. Some limited companies do not have shares and are instead 'limited by guarantee'. In England and Wales, these include commonhold associations and RTM companies (political parties, non-profit organisations). If your company is limited by guarantee, it means that members have agreed to contribute to the assets of the company if it is wound up. A company limited by guarantee has members, rather than shareholders, the members of the company guarantee/undertake to contribute a predetermined sum to the liabilities of the company which becomes due in the event of the company being wound up, normally £1, in the event of a shortfall upon cessation of business. It cannot distribute its profits to its members, and is therefore eligible to apply for charitable status if necessary. Information on RTM (right to manage) companies is available from the Office of the Deputy Prime Minister (tel. 020 7944 4400 or visit http://www.odpm.gov.uk). Information on commonhold associations is available from the Department for Constitutional Affairs (tel. 020 7210 8614 or visit http://www.dca.gov.uk). However, RTM companies and commonhold associations which are incorporated under the Companies Act and the information in this booklet generally applies to them. [edit] Reasons for a formation of a companyOne reason why residents of a block of flats would have a company is to own the freehold or 'head lease'. Freehold gives outright ownership of the property to the company. A 'head lease' is a lease granted directly to the company, who may in turn grant subleases of the property (or parts of it) to the flat owners. However, the company is also often used for collecting a central pool of cash for carrying out repairs and maintenance to common parts of the property. Often it is a condition of buying a flat that the buyer becomes a member or shareholder of the company. In some cases all flat owners automatically become directors. Another reason for why a company would be set up, is so that leaseholders of flats can exercise their right to manage the building they live in. The right to manage must be exercised through a limited company set up for that purpose. This type of company is called an ‘RTM Company’. The prime purpose of limited companies is to limit the liabilities of entrepreneurs who use them for business purposes. In exchange for this limited liability, companies are required to make certain information about themselves available to the public. This information is filed at Companies House. The timing and presentation of the information is governed by law. Flat management companies, although mostly formed for a different purpose, are governed by the same legislation - primarily, the Companies Act 1985. It does not allow flat management companies to be treated any differently to other companies. The main requirements of this Act affecting flat management companies are that they file:
[edit] How to form a company limited by guaranteeIf you incorporate a company yourself, you will need to send the following documents, together with the registration fee to the Registrar of Companies:
Each of these documents is explained below. MEMORANDUM OF ASSOCIATION sets out the company name, the registered office address and the company objects. The object of a company may simply be to carry on business as a general commercial company. The company's memorandum delivered to the Registrar must be signed by each subscriber in front of a witness who must attest the signature. As an exemption, a company limited by guarantee can not include the world "limited" if their satisfy certain criteria. The company will also can be exempt from the Companies Act 1985 in relation to the publication of its name and will not have to send lists of members to the Registrar. ARTICLES OF ASSOCIATION is the document which sets out the rules for the running of the company's internal affairs. The company's articles delivered to the Registrar must be signed by each subscriber in front of a witness who must attest the signature. FORM 10 gives details of the first director(s), secretary and the intended address of the registered office. As well as their names and addresses, the company's directors must give their date of birth, occupation and details of other directorships they have held within the last five years. Each officer appointed and each subscriber (or their agent) must sign and date the form. FORM 12 - is a statutory declaration of compliance with all the legal requirements relating to the incorporation of a company. It must be signed by a solicitor who is forming the company, or by one of the people named as a director or company secretary on Form 10. It must be signed in the presence of a commissioner for oaths, a notary public, a justice of the peace or a solicitor. [edit] Company officersEvery company must have formally appointed company officers at all times. A private company must have at least:
The company director can be anyone with some exceptions. You are restricted from being a Limited Company director if you are unable to consent to your appointment and you must seek legal advice if you are intend to direct the company. You are restricted also if you have been preciously or are declared bankrupt or banned from being a company director by the court. The company secretary - formal qualifications are not required. In Scotland the Registrar will not register for any company the appointment of a director under the age of 16 years old. A child below that age does not have the legal capacity to accept a directorship - Age of Legal Capacity (Scotland) Act 1991. If you need more information, contact Companies House, Edinburgh. Some people not of British nationality are restricted as to what work they may do while in this country. [edit] Statutory accountsAll limited companies have a duty to keep accounting records and to prepare annual accounts. The Companies Act and other regulations specify the format in which the annual accounts must be prepared, the information that needs to be disclosed, and the rules affecting the valuation and treatment of the transactions and balances appearing in the accounts. |
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Bankers'
Securities What is a Guarantee? A guarantee is a promise to answer 'for the debt, default or miscarriage of another', if that person fails to meet the obligation: Statute of Frauds 1677, s.4. Primary liability for the debt is incurred by the principal debtor. The guarantor incurs secondary liability, that is, the guarantor becomes liable only if the principal debtor fails to pay. If the principal debtor's liability to the bank is void, the guarantor will not be liable: Associated Japanese Bank (International) Ltd v Crédit du Nord SA [1988]. A guarantee must be evidenced by a written note or memorandum signed by the guarantors or their agent. Without such written evidence, a guarantee is unenforceable. Bank guarantees are, of course, always written contracts. In these two respects, a guarantee differs from an indemnity. An indemnity imposes direct or primary liability to pay and need not be evidenced in writing: Mountstephen v Lakeman [1871]. Bank guarantee forms are, in fact, dual purpose documents. They operate as guarantees where the borrowing is enforceable against the principal debtor - the guarantor by definition incurring secondary liability - but as indemnities where it is not.
Attributes of Guarantees as Security
Disadvantages
Types of
guarantee |