how do warranties and guarantees act as signals? course hero

by Wayne Bahringer V 5 min read

What is a guarantee and why is it important?

Essentially, a guarantee assures a customer that a purchased product or service will meet certain requirements for a set period of time. For example, a flooring company might guarantee their craftsmanship for a year after installation.

What are warranties and why are they important?

Warranties are also part of the sale of goods and services. Warranties come in a variety of different forms, but at their heart they are a statement about goods, services, or the conditions of a product made by one party that can be accepted as truth by the other party.

What is the difference between a written warranty and a guarantee?

Written warranties also usually cover a good no matter what happens to it, while guarantees generally provide out-clauses if damage is caused outside of normal conditions. For example, in the case of the flooring company mentioned above, a company might guarantee their flooring for up to two years.