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Understanding Commercial Guarantees in the EU

In the European Union (EU), commercial guarantees play a significant role in the business-to-consumer (B2C) context. These guarantees serve as an additional layer of protection for consumers, enhancing their rights and the quality of service they receive. 

This article delves into the intricacies of commercial guarantees in the EU, their implications for traders and consumers, and the legal framework surrounding them.

The Basics of Commercial Guarantees

Commercial guarantees are voluntary commitments offered by traders to consumers in the EU, going beyond the mandatory minimum 2-year legal guarantee. They are designed to provide an extra level of assurance and are often used as a marketing tool to attract customers. Importantly, these guarantees cannot diminish or replace the basic 2-year legal guarantee.

Types of Commercial Guarantees

Commercial guarantees may come in various forms, including:

  1. Extended Guarantee Term: Extending the duration of the legal guarantee of conformity beyond the standard two years.
  2. Money-Back Guarantee: Offering consumers the option to return the product or terminate the service with a refund if they are not satisfied. This is different from, and additional to, the 14-day right of withdrawal.
  3. Best-Price Guarantee: Committing to offer the lowest market price for a specific product.

Binding Nature of Commercial Guarantees

The terms of commercial guarantees are binding as per the conditions stated in the guarantee statement and associated advertising. If there’s a discrepancy between the two, the more favorable conditions for the consumer, as advertised, will prevail. This is valid unless any advertising corrections were made before the contract’s conclusion.

Requirements for Commercial Guarantee Statements

Commercial guarantee statements must adhere to specific requirements:

  • Delivery on a Durable Medium: Must be provided to the consumer on a durable medium, at the latest at the time of delivery.
  • Clear Language: Expressed in plain, understandable language.
  • Consumer Rights Acknowledgment: Include a statement that the consumer’s legal rights for free remedies in case of non-conformity are unaffected.
  • Guarantor Information: Provide the name and address of the guarantor.
  • Procedure for Implementation: Detail the procedure for the consumer to follow to implement the guarantee.
  • Designation of Goods: Specify the goods to which the guarantee applies.
  • Terms of Guarantee: Clearly lay out the guarantee’s terms.

The implementation of commercial guarantees must be carefully managed. Traders should note that member states in the EU might have different rules regarding guarantees. Therefore, it is crucial to seek legal advice to ensure compliance with applicable laws in targeted countries. 

Businesses can refer to clauses related to user rights, payments, and after-sales services for basic understanding, but more thorough documentation is advisable.

Within our Terms and Conditions Generator dashboard you can easily add these clauses in three simple steps:

First, add clauses:

Commercial Guarantees

Then, click on the Business model, payments and user rights tile:

Commercial Guarantees

Finally, scroll down to add clauses related to guarantees and after sales services: 

Commercial Guarantees

Commercial guarantees in the EU represent a vital aspect of consumer protection and business operations. They offer additional assurance to consumers while providing traders with a tool to enhance customer satisfaction and trust. 

Understanding and adhering to the legal requirements of these guarantees is essential for both consumer protection and business success in the EU market.