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Commercial guarantees: what to look out for

When promoting specific types of goods, sellers usually promise prospective customers commercial guarantees that commit to providing a free remedy should the product sold happens to be defective and hence requires repair or replacement. This protection which sellers offer through commercial guarantees is additional to the legal protection which covers all types of goods purchased by consumers. Whenever a product is defective or does not conform to the contract of sale, the law safeguards consumers by giving them the right to request a free remedy in the form of repair or replacement or to part or full refund of the money paid. The length of this protection is two years from the date of delivery of the goods.

While the legal guarantee applies automatically each time a purchase is concluded, commercial guarantees are optional and given out voluntarily. However, once given, these guarantees are legally binding as per their terms and conditions.

It is therefore very important that consumers ensure they have tangible proof of the commercial guarantee promised by the seller and should always ask that it is given to them in writing. The seller should not dismiss this request by telling consumers that the receipt is the guarantee. This is especially so if the receipt only provides information on the purchase made and does not provide any details on the type of guarantee given.

The Consumer Affairs Act provides guidance on what terms and conditions should be included on a commercial guarantee’s certificate. This information should include:

▪ the name and address of the guarantor, who may be different from the seller of the goods;

▪ the length of the guarantee;

▪ a description of the goods and services covered under the guarantee. Unless otherwise specified, it shall be assumed that in the case of goods the commercial guarantee covers any defects that may crop up during the period of the guarantee;

▪ how consumers can make their claim under the guarantee;

▪ whether or not the guarantee may be transferred to others. Unless otherwise stipulated, the commercial guarantee may also be availed of by subsequent owners;

▪ what remedies the commercial guarantee offers.

These conditions should be written in plain language that can be easily understood by the average consumer, and the language used should be Maltese or English.

Furthermore, unless expressly stipulated in the guarantee, the guarantor cannot request a fee or charge for transport of the goods under guarantee. However, even though included in the conditions of the commercial guarantee, such a charge cannot be implemented if the product’s defect is still covered by the two year legal protection which provides for a free of charge remedy.

The law also states that a commercial guarantee is automatically extended by the period of time during which the guarantor had the goods, or part of them, in his possession while executing the guarantee.

As consumers, we also have specific responsibilities which we need to assume so as not to lose the benefits of commercial guarantees.

For instance, if the guarantee stipulates that the product purchased must be serviced at specific intervals, if this is not done, and the product breaks down, then free  repair may not apply. We should also ensure that we take care of the product purchased as instructed by the manufacturer and when a problem crops up always report it to the original seller and not involve a third party.

Commercial guarantees should provide added benefits to consumers. However, when this is not the case, these guarantees should never try and replace the legal rights the Consumer Affairs Act grants to consumers.

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