A guarantee is an assurance that a party will provide certain services to another party if and only if a specific incident occurs. Normally, guarantees are given to a buyer by a product or service seller to provide an extra bit of assurance to the buyer. The contract that initiates the guarantee agreement between the buyer and the seller is known as the guarantee paper, which clearly mentions all the conditions upon which a buyer will be eligible to get the guaranteed service for the product or service. Generally, both the customer and the seller sign a contract to officially initiate the guarantee.
Normally a seller or a service provider is obligated to provide a guarantee for a certain period of time. That specific time period is known as the Guarantee period. Although the concept of providing guarantees started as a method to create more credibility of a product to its customer segment, it has lost its charm today as there are more and more passive influences present in the market. In today’s market, warranties are more popular than guarantees. Although guarantees are more open ended contract, then warranties, but still warranties are more popular in the market than guarantees.
As guarantee and warrantee are two terms highly used as a pair, it is important to know the difference between these two to have a clear concept about what is a guarantee and what it is a warranty. A guarantee provides a solid assurance to a the customer that if something goes wrong with the product then the seller is entitled to take back the product and give him a new one. It not only creates high credibility for the seller to his/her customer, it also helps to entitle the seller and the manufacturer to an increased risk. A warrantee on the other hand is an assurance provided by the sellerof his/her customer that he will take necessary maintenance action to fix the product if something goes wrong. In short, a guarantee is a pledge whereas a warranty is a long term assurance of free maintenance service. Thus, sellers are more interested to assure warranties rather than guarantees.
To avail a guaranteed service, a customer has to have the guarantee contract while contracting the seller or the manufacturer. As a guarantee ensure almost a new product to a customer, the customer have to have the contract to prove that he/she is entitled to have the guaranteed services as the terms and conditions mentioned in the paper has been met.