Legal and commercial guarantees

Here follow the relevant excerpts from the concluding letter of one of our numerous complaints about guarantees:

With reference to my letter regarding the legal guarantee... it is my pleasure to say that this case has been resolved...

Once again I thank you for the advice you give us on consumer rights. Finally I have learned that the most powerful weapon one can have is the skill of writing. (Lorvic Xuereb)

It is very satisfying when we resolve cases related to the perennial issue of guarantees because, despite having repeatedly covered this issue, there is still a lot of confusion combined with too many misunderstandings. However, what makes it worse is that there are rogue traders who take advantage of this syndrome, combined with consumer ignorance on legal and commercial guarantees. (Laws of Malta, Chapter 378 Consumer Affairs Act, Articles 72-93)

There are two types of guarantees recognised under this act, namely the legal guarantee and the commercial Guarantee. In a trader-consumer transaction (i.e., an item sold by a trader to a consumer) the consumer is automatically entitled to the legal guarantee, which is valid for two years. The relevant provision is in the Consumer Affairs Act, Part VIII, article 78 which clearly stipulates:

"The trader shall be liable under the provisions of articles 73 and 74 where the lack of conformity becomes apparent to the consumer within two years from the delivery of the goods. This period of prescription shall be suspended for the duration of negotiations carried on between the trader and the consumer with a view to an amicable settlement."

Moreover, since it had been anticipated that rogue traders might try to evade this issue through contractual clauses, the law further drives the point home, and in article 81 it is stressed that:

"Any contractual clauses or agreement concluded by the consumer with the trader before the lack of conformity is brought to the attention of the trader, are not binding on the consumer if such clauses or agreement directly or indirectly waive or restrict the rights available under this Part."

On the other hand commercial guarantees are not obligatory, but voluntary. They are offered on the basis of the principles of a liberalised market place in which traders try to win our custom by offering us a better service then other traders. This means that, when traders offer a commercial guarantee, the consumer is still entitled to the legal guarantee. A commercial guarantee can only increase and improve a consumer's rights and most definitely not replace or reduce the legal guarantee. This too is clearly stated in the law (Article 82).

While the duration of commercial guarantees is at the traders' discretion, rogue traders offer a commercial 'six months' guarantee and mislead consumers into believing that, after six months, the trader is no longer liable. However the truth is that, after six months, the legal guarantee would still be valid for a further year and a half in which the consumer is covered against what is legally defined as "lack of conformity".

The confusion here may partly arise from the period of six months established for the civil code legal guarantee against latent defects in the sale of movables. There is also a six-month period of presumption mentioned in article 80 of the 1994 Act. Indeed these periods have confused a number of minds and need to be analysed carefully.

In layman's terms, the act says that, if at any stage within two years from the date of delivery of goods purchased, the item does not conform to the established performance which the bought item is supposed to perform, or the item does not correspond to what the consumer ordered, the seller is legally obliged to provide a remedy, free of charge.

In a nutshell, the seller must have the item brought back into conformity where possible and repair or replace the bought item with a new one. The parties may also agree on a full or partial refund of the price paid.

I thank Dr David Fabri for his consistent help and advice on consumer issues over the years. Next Sunday he will cover more guarantee-related issues. Dr Fabri is a lecturer on Consumer Law at the University of Malta and a contributor to our Website www.muscatinglott.net.