Warranty vs Guarantee

Topics: Warranty, Dimension, Contract law Pages: 3 (637 words) Published: February 15, 2012
WARRANTY AND GUARANTEE

WARRANTY
A written assurance that the manufacturer of a product will guarantee the quality and reliability of a product in terms of correcting any legitimate problems with the product at no additional cost, for some expressed or implied period of time or use.

FACTORS DETERMINING WARRANTY POLICY
• Product reliability
• Length of warranty period
• Features of warranty policy
• Warranty cost

FEATURES OF WARRANTY POLICY
• One dimensional or two dimensional: One-dimensional warranty is a warranty that is based on calendar time alone. Two-dimensional warranty is a warranty that is limited by the age and the usage of the product. • Free-replacement, pro-rata or rebate: In a free-replacement warranty (FRW), manufacturers will repair or replace the failed items free of charge up to some specified period from the initial purchase. In contrast, under a pro-rata warranty (PRW), manufacturers will refund a fraction of the purchase price or will replace the failed item with a new one at a prorated price, if an item fails under warranty. Under a rebate policy manufacturers agree to refund an amount to the maximum of the selling price if an item under warranty fails. • Renewing or non-renewing: Under a renewing policy, if an item fails within the warranty period, it will be replaced by a new item with a new identical warranty, replacing the old one. In other words, a new warranty period begins with each replacement. On the contrary, the non-renewing policy will replace the failed item but will not add another period of warranty.

TYPES OF WARRANTY
• Express warranty
• Implied warranty
• Lifetime warranty
• Extended warranty

ADVANTAGES OF WARRANTY
• Safeguards the rights of customer
• Protects the manufacturers
• Serves as a decision-making criterion
• Useful in reuse strategy
• Helps to build long-term image and relationship with customer

GUARANTEE...
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