Consumers often find it difficult to understand the difference between a commercial and a legal guarantee. They become particularly confused when sellers offer them a commercial guarantee shorter than two years. In such situations, consumers question the legality of such guarantees.
To differentiate between these two guarantees, consumers need to first remember that while the legal guarantee is a statutory right that entitles them to seek redress from the seller if a product is defective or does not conform with the contract of sale, a commercial guarantee is an optional, additional guarantee provided by the trader or the manufacturer of the product.
Another important difference is the duration of these two guarantees.
While the time frame of the legal guarantee is fixed at two years, the length of a commercial guarantee may vary depending on the type of product bought, the brand, the seller or manufacturer. This means the duration of the commercial guarantee can be less than two years.
Notwithstanding this however, consumers’ legal rights are not diminished. This is because commercial guarantees can only provide more benefits to consumers, and if any of their terms and conditions diminish these benefits, they are not legally binding.
Another important difference is that while a legal guarantee provides consumers with a choice of three remedies, one of these being the right to cancel the contract of sale and request a refund if repair or replacement are not viable solutions, a commercial guarantee may not give the option of a refund.
However, if the two-year legal guarantee is still valid, consumers may request a refund if it would cause them significant inconvenience to repair or replace the product. This applies regardless whether the terms and conditions of the commercial guarantee state otherwise.
Once the two-year legal protection expires, then the terms and conditions of the commercial guarantee strictly apply. So it is important for consumers to shop around for the most beneficial guarantee before deciding which product to buy.
Consumers must also be aware that while the legal guarantee automatically applies when they purchase goods from sellers and the only documentation required is the proof of purchase, commercial guarantees should be provided in writing.
This requirement is specified in the Consumer Affairs Act, which also lists the information that must be included in the terms and conditions of commercial guarantees.
This information should include: the name and address of the person responsible of the guarantee (the guarantor); the duration; a description of what is covered by the guarantee; what remedies the guarantor will provide in case of a defect; whether there are any costs involved in executing the guarantee; and also the procedure consumers need to follow to claim a remedy under the guarantee. A commercial guarantee often also lists specific responsibilities consumers need to follow to benefit from the guarantee. So consumers must read, understand and observe these conditions.
Consumers must also be careful not to lose the commercial guarantee document and the proof of purchase, especially if these are essential requirements to benefit from the guarantee.
Even though commercial guarantees are given out voluntary by traders, once given they become legally binding on traders. Furthermore, consumer legislation states that a commercial guarantee is also binding on the trader if it is mentioned in a statement or advertisement, even if the commercial guarantee is not specifically mentioned in the contract of sale.
Should consumers encounter situations where a commercial guarantee is not honoured or traders try to impose additional costs before providing a remedy, consumers may seek the assistance of the Office for Consumer Affairs.
Odette Vella, director, Information and Research Directorate