GUARANTEE

&

WARRANTY

04/08/2304/08/23 guarantee and warrantyguarantee and warranty 22

Project by CLC Project Team 1 Project by CLC Project Team 1

Comprising of………….

A.M.Ashfaq Zaki Parvathy Viswanathan Ragini Thomas Edison Vatchala Devi Vishnu Thilagam A.S.

Under inspiration and guidance from

Mr. Akbar Ansari, Faculty for Strategic Management

MEASI INSTITUTE OF MANAGEMENT

04/08/2304/08/23 guarantee and warrantyguarantee and warranty 33

Topics and presenter Topics and presenter

• Basic Definitions-Thomas Edison

• Distinction between the terms- Ragini

• Uses of the terms- Vishnu

• Legal obligations -Parvathy

• Types of guarantees and warranty- Vatchala

• Warranty policy and summary - Zaki

Basic Definitions

of

guarantee

and

warranty

No. of Persons in Guarantee

Warranty Division

Essentials

of

Warranty

Distinction

between

Guarantee and Warranty

DISTINCTIONSDISTINCTIONS

GUARANTEEGUARANTEE Contract to perform the Contract to perform the

promise or discharge the promise or discharge the liabilityliability

TripartiteTripartite Curing of defects or Curing of defects or

replacementreplacement Express or impliedExpress or implied

WARRANTYWARRANTY State of the subject of State of the subject of

contractcontract

BilateralBilateral Claim for damagesClaim for damages

Express & written Express & written unless implied under unless implied under sale of goods actsale of goods act

Uses of the terms

Guarantee & Warranty

Guarantee

Types of guaranteeUse/ purpose

To obtain Loan

Credit purchase/sales

For good conduct OrHonesty of person

Uses of the term guarantee

1.By the country/states: Constitutional  guarantee  for

civil liberties (Freedom of speech,expression…..)

2.By business Performance guarantee

Drawing lessons from their

western counterparts, domestic banks have now begun insisting on equipment supplier performance guarantees for infrastructure projects( The Hindu, Bangalore, May 27,2008)

Guarantee offered by a gym

Satisfaction guarantee Points to note

– 100% refund of money if not satisfied with performance.

Guarantee signifies assurance.

Guarantee signifies satisfaction

Used as marketing tool

Guarantee by banks/fin institutions

3. By banks and financial institutions: Credit guarantee( Export credit guarantee

corporation - ECGC) Established in 1957 by Govt of India Apart from other work they offer, guarantees

to banks and financial institutions which makes it easy to obtain export finance.

Bank Guarantee Performance Guarantee: Drawing lessons

from their western counterparts, domestic banks have now begun insisting on equipment supplier performance guarantees for infrastructure projects( The Hindu, Bangalore, May 27 ).

Guranteed benefits by insurance firms

Life Insurance Corporation of India is planning to garner Rs 25,000 crore through its new ‘single premium’ endowment product offering ‘Jeevan Aastha’.

The plan would offer guaranteed benefits on maturity and death.

The plan offers a guaranteed return of 10 per cent of the maturity sum assured for a 10-year term  (Hindu, Dec. 8,2009)

Guarantee by placement firms

4. By Training Institutions Placement guarantee Check difference between assistance

and assurance. Most Business schools use the sentence “100%

placement ASSISTANCE”. Observe carefully the tricky word in that sentence, i.e. ASSISTANCE. No single B school will use words like ASSURANCE or GAURANTEE. Because, the word ASSISTANCE has no legal binding but Guarantee has legal binging. In other words, they are not confident in getting you a job and you just can’t do anything if they fail to get you the placement. BITM issues Placement Guarantee Card duly signed by the Director himself on the first day of admission to all its students. 

          Given below is the Placement Guarantee Card. It is absolutely a straight offer as we are 100% confident on our teaching methodology. 

Courtesy: www.bitmcollege.com/placement.htm

Data security guarantee

5. E business firms– Data security

guaranteeAmidst all the talk of the transformative powers of Web 2.0 and Government 2.0, ensuring data privacy and security remains a major challenge for private and public sector actors. Case in point: the UK Government announced earlier today that it lost track of two disks holding over personal data on over 25million UK citizens. The lost data includes names, addresses, dates of birth, National Insurance numbers, and in some cases, bank details.

– Now, unlike the opposition figures quotes in the aforementioned BBC piece, I’m no fear monger but cases such as the question “is our information ever secure?” I for one believe the answer is no. No one, in either the private or public sector, can guarantee 100% data security. We recently interviewed UK CIO John Suffolk and he echoed this view, noting that in a loosely federated world, providing a guarantee of end-to-end security is the ultimate challenge.

SOFTWARE-WARRANTY CLAUSE!

This software "Extra Boy Pro" is provided "as is" without warranty of any kind.

The author makes no guarantee of correctness, accuracy, reliability, safety or performance. You alone are responsible for determining if this software is safe for use in your environment.

Neither the author, Elevayta, nor anyone else who has been involved in the creation or delivery of this product shall be liable for any direct, indirect, consequential, or incidental damages arising from the use or inability to use such product even if the author has been advised of the possibility of such damages.

( software to isolate vocals from songs)

www.freemusicsoftware.net

PRODUCT WARRANTY

WARRANTY CLAUSEMETROSONICS warrants each new cl-304manufactured and sold to

be free from defects in material,workmanship and construction, except for batteries whichmay be contained therein, and that when used inaccordance with this owner's manual will perform toapplicable specifications for a period of one year aftershipment.

If examination by METROSONICS discloses that the product has been defective, then our obligation is limited to repair or replacement, at our option, of the defective unit or its components.

METROSONICS is not responsible for products which have been subject to misuse, alteration, accident or for repairs not performed by METROSONICS.

Source: metrosonics acoustic calibrator- Users manual

AUTOMOBILE WARRANTY -Maruti

1. Warranty Every Maruti Suzuki Certified used car is refurbished with

Maruti Genuine parts at the state of the art Maruti workshops. We are 100% confident that the car you buy meets strict Maruti

Suzuki quality standards. However, should you face any problem, our comprehensive warranty up to 1 year & 3 free services ensures that the problem is taken care of and assures you “complete peace of mind”.

AUTOMOBILE WARRANTY- Maruti

2. Warranty Coverage:

The warranty covers all mechanical and electrical parts except the following:

All wear and tear parts, parts worn due to aging, consumables like oil, filters, spark plugs, C.B. points, fuses, bulbs, paint problems, A/C gas leak, battery, tyres, rubber and plastic items.

 

AUTOMOBILE WARRANTY- Maruti

The warranty covers all mechanical and electrical parts except the following:

All wear and tear parts, parts worn due to aging, consumables like oil, filters, spark plugs, C.B. points, fuses, bulbs, paint problems, A/C gas leak, battery, tyres, rubber and plastic items.

 

AUTOMOBILE WARRANTY- Maruti

•The warranty varies with age & mileage of the car which is as shown below:

Age Mileage Warranty Coverage

Up to 5 Years Less than 100,000 kms

comprehensive. One year or 15000 kms

More than 5 yrs & Up to 7 yrs

ess than 100,000 kms

Comprehensive. Six months or 7500 kms

More than 7 years & up to 10 yrs

Less than 100,000 kms

No warranty

Uses of warranty

• By business firmsTo enhance their valueShow of qualityAssurance of product performance

Legal obligations

LEGAL OBLIGATIONS-LEGAL OBLIGATIONS-GUARANTEEGUARANTEE

1.1. ConcurranceConcurrance2.2. Primary liability in some personPrimary liability in some person3.3. Essentials of a valid contractEssentials of a valid contract4.4. Writing not necessaryWriting not necessary5.5. Contract of uberrimae fidelContract of uberrimae fidel6.6. Nature of surety’s liability – it is Nature of surety’s liability – it is

coextensivecoextensive7.7. Limitation of surety’s liability-Limitation of surety’s liability-

LimitedLimited

LEGAL OBLIGATIONS -WARRANTY• A warrantor shall fulfil the following

obligations:• Full and conspicuous disclosure of

terms and conditions; additional requirements for contents such as:

(1) The clear identification of the names and addresses of the warrantors.

(2) The identity of the party or parties to whom the warranty is extended.

(3) The products or parts covered.

LEGAL OBLIGATIONS WARRANTY– A statement of what the warrantor will do in the event of a defect, malfunction, or failure to

conform with such written warranty--at whose expense--and for what period of time.– (5) A statement of what the consumer must do and expenses he must bear.– (6) Exceptions and exclusions from the terms of the warranty.– (7) The step-by-step procedure which the consumer should take in order to obtain performance of

any obligation under the warranty, including the identification of any person or class of persons authorized to perform the obligations set forth in the warranty.

– (8) Information respecting the availability of any informal dispute settlement procedure offered by the warrantor and a recital, where the warranty so provides, that the purchaser may be required to resort to such procedure before pursuing any legal remedies in the courts.

– (9) A brief, general description of the legal remedies available to the consumer.– (10) The time at which the warrantor will perform any obligations under the warranty.– (11) The period of time within which, after notice of a defect, malfunction, or failure to conform with

the warranty, the warrantor will perform any obligations under the warranty.– (12) The characteristics or properties of the products, or parts thereof, that are not covered by the

warranty.– (13) The elements of the warranty in words or phrases which would not mislead a reasonable,

average consumer as to the nature or scope of the warranty.– (b) Availability of terms to consumer; manner and form for presentation and display of information;

duration; extension of period for written warranty or service contract– SOURCE:Magnuson Moss Warranty Act FROM INTERNET

Types

of

guarantees and warranties

Types of guarantee

Based ontime

Retrospective Prospective

Types of guarantee

Based on continuity

Specific Continuous

Types of Bank Guarantee Guarantee in regards to goods Guarantee on a person• Tender guarantee/bid bond (EMD)• Performance Contract Guarantee(PBG)• Credit guarantee/Supply guarantee• Custom bond• Guarantee for exemption of customs duties• Advance Payment guarantee• Guarantee for honoring cheque source: http://quanterion.com

Warranty types

Based on time

Limited period warranty

Extended warranty

Life time warranty

Warrranty types…

Based onFormality

Expressed Implied

Warranty types

For Consumer Goods

Ordinary freeReplacement

type

Unlimited freeReplacement

type

Prorata type

Warranty types

Manufacturer

ReplacementWarranty

RepairWarranty

Seller

Replacement Warranty

Repair warranty

Guarantee-general requirement

Maintain business ethics Maintain good conduct Maintain good relations with banks and other

stake holders.

Warranty Policy

Warranty Policy

Selection of type of warranty free replacement-advantage buyer pro-rata-advantage seller mixed policy is a compromise.

Warranty Planning inputs

whether the product is repairable or non-repairable

repair cost warranties offered by competitors Average break down probability

Warranty Policy

Should be consistent with the product type, design, type of use, nature of use

Should be explicit and necessarily in writing Paperless administration preferable Good administering mechanism

Summary

Summary Guarantee implies promise, pledge,

agreement, security, surety Warranty is undertaking, certification and in

general terms a contract. While guarantee is towards intended

performance, warranty is extension of contract/service

Guarantee is used by many institutions while warranty is mainly used in business products.

Summary

Organizations offer warranty to express their Products superior quality Support after sales Maintain customer value

Warranty shall be in clear terms unless is implied.

Summary

Individuals and organizations shall adopt good conduct and ethics to obtain guarantee value

Organizations shall have clear cut warranty policy and efficient warranty administration.

References

Elements of merchantile law by N.D.Kapoor

The Commercial Loan Guaranty – Types & Techniques Rick L. Knuth

http://www.aqualung.com Microsoft Students encarta

encyclopedia www.Wikipedia.com

PRACTICE AND DISCIPLINE GURANTEES SUCCESS

-DHRONACHARYA

THANK YOUTHANK YOU