manufacturer's guarantee

The provision to the effect that guarantees are contractually binding whether issued by a manufacturer or a retailer, the fact that a guarantee is legally binding it avoids the need to satisfy the English law requirement of consideration. Even where a guarantee has not been paid for , consideration will normally be able to be found on the basis that the consumer has provided a benefit to the party offering the guarantee whether it is the retailer of a manufacturer by entering into the contract for the purchase of the goods.

However, in the absence of this new provision, it is a possibility to the occurrence of disputes as to the consideration issue where a consumer is not aware of the guarantee prior to the purchase of the product. It is also significant that what is binding are the conditions laid down in the guarantee statement and the associated advertising meaning that  the statements in leaflets, brochures and general advertising which add to or elaborate upon the formal contents of the guarantee should be binding along with these formal contents.

The Regulations following the Directives also contain helpful rules on transparency. The guarantor and any other party supplying goods that are the subject of the guarantee must, on request by a consumer, provide in writing (or in any other durable medium) a copy of the guarantee. In all cases the guarantor must ensure that the contents of the guarantee and the essential particulars necessary for making claims are set out in plain intelligible language.

However, before the Sale and Supply of Goods to Consumers Regulations 2002 came to force a consumer had rights under s.48 part 5 of the Sale of Goods Act 1979 where it states that the buyer has a right to require the seller to repair or replace the good or require for a reduction of the purchasing price by an appropriate amount or to rescind the contract with regards to the goods in question, hence, the legal principle was applied in the case of Rogers v Parish (Scarborough) ltd [1987] 1 QB 933along with s.14 which stresses the importance of satisfactory quality. The plaintiff in the Rogers case bought a Range Rover which is above the range of a normal car at £16000 expecting it to be fit for the purpose due to the description provided by the defendants who were car dealers, however, the car proved to be unsatisfactory after few months of driving it and it was replaced by another Range Rover which appeared to be unsatisfactory as well after being used for six months.

The counsel for the seller in the Rogers case was of the opinion that a car was not rendered unmerchantable by defects which the buyer was entitled to have them rectified free of charge under the Manufacturer’s guarantee, but, His Honour Judge Mustill L.J. was unimpressed and urged whether it can be right to say that the reasonable buyer is to expect less of his new Range Rover with a guarantee than without one and proceeded by saying that a guarantee is more of an additional right to the buyer, not a subtraction from them, and it should be noted as only a confined addition since it lasts for a short period of time and does not compensate the buyer for any loss or inconvenience.

Nevertheless, before the regulations enactment, the consumer had no rights to demand for a replacement, a repair or rescind the contract if he or she had been warned of the defects of the good prior to the making of the contract. The new provisions in the Regulation deal with non-conformance of the goods to the contract, they provide that a repair or replacement have to be carried out within a reasonable time and without significant inconvenience to the consumer but incase it is impossible then it is up to the consumer to select an alternative .

Prior to the provisions another characteristic of the guarantees that brought about major criticism was the exemption clauses in consumer guarantees which practically  diminished the customers rights instead of extending them but Part 1 of the Unfair Contract Terms Act 1977 made such clauses void.

The EU Directives with their provisions have succeeded in empowering consumers except for the Article 6 on guarantees whereby in a situation where a manufacturer chooses to provide a guarantee of the goods within the terms of the Directives, the guarantee will only be binding in accordance with Article 6 of the Directives. The Article 6 although does not require the manufacturer to issue a guarantee to a consumer at all. However, there are other provisions of the Directives which have several impacts on the manufacturers. Such include

         Article 2 which deals with the conformity of the contract. It establishes that the manufacturer’s actions are of a crucial role in defining the consumer’s expectations but the liability for the failure of the goods to satisfy consumer’s expectations is not to be imposed on the manufacturer but rather on the retailer  unless if there is a violation of  rights then the Directives allows the retailer to avoid liability for the goods failure to conform to the manufacturer’s statements if he shows to be unfamiliar to the statements in question or  by the time the contract was made the statement had been corrected or the consumer’s decision of purchasing the goods was not influenced by the statement, but there still is a possibility of the retailer to pass that liability back to the manufacturer.

           Article 4 puts emphasis on liability, where in most cases the retailer is liable to the consumer as a result of lack of conformity due to an act of omission by the producer, the person liable against whom the final retailer may pursue remedies together with the relevant actions and conditions of exercise shall be decided by the national law. This appears to recognise the iniquity of imposing front-line liability on the retailer, the final retailer who is held liable to a consumer for the lack of conformity resulting from an act of someone higher in the chain of distribution is in principle , entitled to bring a claim against that person which in most cases it is the manufacturer.

As a result of the Directives, in the UK, there are a number of grounds on which a manufacturer may be held liable directly to the consumer of his products under the existence of domestic law. Therefore it is under the Sale of Goods and Supply Act 1982 that hold a manufacturer liable for the repair or replacement of goods once a consumer was issued with a guarantee at the time of purchase.

Nevertheless, a manufacturer or any other producer may be held liable to a consumer for a loss caused by defective goods in the absence of a guarantee either under the product liability regime of the Consumer Protection Act 1987 or in the tort of negligence according to the principle of Donoghue v Stevenson [1932] All ER Rep 1.

Above that a manufacturer who does not directly sell to consumers is not normally in a direct contractual relationship with the ultimate purchasers of his products unless he chooses to give a guarantee, a manufacturer’s statements about his products, including statements in advertising which may sometimes be construed as giving rise to a direct contractual relationship between manufacturer and purchaser.

The implementation of the Directives has brought about several rights, some being, goods must show the quality and performance normal in goods of the same type and which can reasonably be expected, taking into account their nature and the producer’s public statement whereas the rights before stated that goods must be of satisfactory quality in the view of a reasonable person taking account of description, description and other relevant factors.

In replying the question whether a manufacturer’s guarantee is of any value? The reply would be no, it is hardly of any value to a consumer since the rights that a manufacturer’s guarantee give a consumer are already under the consumer’s statutory rights and the fact that the provisions of the Directives make it optional for a manufacturer to issue a guarantee, proves the fact that a guarantee is of less benefit to a consumer compared to those received by a manufacturer.

Disadvantages that a manufacturer’s guarantees have include, if a guarantor faces liquidation during the extended period then the extended warranty that a consumer had purchased becomes worthless, guarantors tend to delay with complaints brought to their attention and in carrying out  or authorising repairs, consumers tend to take guarantees at their face value  with bland assurance of peace of mind only to find out later when they enquire to enforce them that the small prints makes them far narrower than expected; the guarantees may, for example, exclude liability for consequential loss., a consumer who wishes to sell a car or a house may find that the extended warranty is not transferable.

Advantages that a manufacturer’s guarantee have include, encouragement to a costumer to purchase knowing that with a guarantee he or she is entitled to repairs or replacement and because of this a manufacturer increases his sales, a guarantee also helps a manufacturer to promote his products as a result of the contact details that a consumer is required to give a manufacturer in order to be issued with a guarantee. To a consumer the only advantage gained is that it provides a way of sidestepping the hazards of litigation, especially as the remedy which he really wants repair or replacement may not always be available against the retailer.

In concluding, a manufacturer’s guarantee appears to have more benefits to a manufacturer than it has to a consumer, who incase of an extended warranty pays for it, thus, giving a consumer a double loss and only to find that the warranty posses a number of exclusion clauses which make it only optional for a manufacturer to fulfil his part of the contract.

         

       

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