"Warranty" vs. "Guarantee" in the United States

"Warranty" vs. "Guarantee" in the United States

The Magnuson–Moss Warranty Act (P.L. 93-637) is a United States federal law (15 U.S.C. § 2301 et seq.). Enacted in 1975 by Congress, the federal statute governs warranties on consumer products. The law was created to fix problems due to manufacturers using disclaimers on warranties unfairly or misleadingly.

“The Act encourages companies to use informal dispute resolution mechanisms to settle warranty disputes with their customers."

What is Congress' intentions in passing it for consumers:

  • Received complete information about warranty terms and conditions,
  • Increase consumers satisfaction,
  • Compare warranty coverage before buying,
  • Promote competition based on warranty coverage,
  • Resolving any disputes with a minimum of delay and expense to consumers.

“In USA the term warranty is quite commonly used. It implies a formal assurance given to the customer about the state of the product is true and declares that the manufacturer will be responsible for the repair or replacement if found defective."


As Federal Trade Commission (FTC) law recognizes two basic kinds of warranties:

Implied warranties 

Unspoken, unwritten promises, created by state law, go from seller to customer. There is no specified duration for implied warranties under state laws. However, the state statutes of limitations for breach of either an express or an implied warranty are generally 4 years from the date of purchase.

Express warranties

Unlike implied warranties, are not "read into" your sales contracts by state law; instead, you explicitly offer these warranties to your customers in the course of a sales transaction. It can be made either orally or in writing. While oral warranties are implied, only written warranties on consumer products are covered by the Magnuson-Moss Warranty Act.

Upon the Act and the Rules warrantor must designate, or title, a written warranty as either "full" or "limited" for products costing more than $10.

Full Warranty

Full warranty must repair or replace the product during the specified warranty period. Federal and some state laws mandate the convenience of the consumer. Additionally, full warranties do not often cover normal wear and tear. A full warranty may be active for a limited time, perhaps 60 or 90 days, or it may cover the product "for life,"  but it rarely comes without conditions.

Limited Warranty

The limited warranty is limited to just the specified parts, certain types of defects, or other conditions. But since it can mean virtually anything the retailer decides, it is vital to fully understand the meaning of "limited" when buying such a product. Often, it covers just the parts and not the labor required to fix something fully. A limited warranty may also stipulate that the manufacturer and the consumer split the cost of repairs for a given period.

Advertise Warranties

The Magnuson-Moss Warranty Act does not cover the advertising of warranties. However, warranty advertising falls within the scope of the FTC Act, which generally prohibits "unfair or deceptive acts or practices in or affecting commerce." Therefore, it is a violation of the FTC Act to advertise a warranty deceptively. For more information, click here.

Sample of Full warranty
A sample of Full warranty
Sample of Limited warranty
A sample of Limited warranty

The FTC's Rule on Pre-Sale Availability of Written Warranty Terms requires that written warranties on consumer products costing more than $15 be available to consumers before they buy.

NOTE: In the United States, but not elsewhere, there is a distinction between a surety and a guarantor. A surety is usually bound with the principal, at the same time and on the same consideration, while the Contract of a guarantor is his separate undertaking and the guarantor is not liable until due diligence has been exerted to compel the principal debtor to make good any default. There is no privity of Contract between a surety and the principal debtor. Instead, the surety contracts with the creditor and are not liable. More about this can be found here.

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