If you clicked onto this blog, it means you’re trying to extend your knowledge of guarantees and warranties in the world of construction. This blog will cover who is involved, what the terms are, where to look for them, why you should care, and how they can benefit you. Once you get past the first main points, then you can read about common issues and what to look for when deciding on a company to complete your project.

Who’s in charge?

Some construction companies or contractors will have a guarantee or a warranty. Guarantees act as a promise of good faith to the consumer or contractor. If something goes wrong in the future, it basically says they will try to fix it if they are at fault. Warranties are a binding promise between a consumer and a contractor or company.

Basics of Guarantees

The “what” was previewed briefly within the previous section. A guarantee is a promise of future goodwill for a consumer from a contractor or manufacturer. The promise is supposed to act as assurance. It’s supposed to be a risk management tool that offers an explanation to what happens when something goes wrong during installment or if a product breaks, and explains who is responsible. This also acts as a form of goodwill between the two parties whenever the issue is fixed.

That said, anyone can claim a guarantee or make a warranty. These ideas are not legally binding but warranties tend to be easier to prove.

There are many different types of guarantees and warranties, with three overarching categories that customers should know:

• Payment - It guarantees money for supplies, materials, and/or resources so the project goes smoothly. It allows the builder to have peace of mind and support a healthy relationship with the suppliers for the project.
• Workmanship - The people doing the building or installation must complete it well during the time that is specified within the contract. This is also known as performance.
• Maintenance - In the instance that problems occur with the work, contractors usually offer this so they can fix the issues within a specific time frame after the project is completed.

When you know how to look

Typically, if a construction company has a guarantee on their website, it is usually located in the bottom of the webpage or near endorsement related information (like reviews). That said, the construction industry often makes you dig for that kind of information. Best practice is to call or email specifically asking about their guarantee and/or warranty. If a company does not have a guarantee or a warranty, be wary! Additionally, if a company does not have any reviews or references click out of their website immediately. Social proof is only used if it’s positive feedback about the business. If there’s nothing there, it is likely they are not getting glowing feedback.

So, are these things important?

Your project should be done right. You want to make sure someone is accountable if anything goes wrong with your project. Especially regarding construction, since it is a large investment of your time, energy, and money. Considering the job's scope will enable you to secure the most favorable pricing for labor or materials covered by a warranty. Do not hesitate to ask how their service impacts you and ask about the backup plan if something goes wrong. You should focus on how their policy best serves you and your needs as a consumer.

What you need to know

This section is practical knowledge of things to know and apply. There are four key things to be aware of whenever you are dealing with guarantees and warranties:

• Warranties are more legally binding compared to guarantees but both are largely intangible.
• Both are based on the idea of goodwill of contractors/manufacturers.
• Warranties usually have a determined length of time whereas guarantees tend to be long-term or even indefinite.
• Guarantees and warranties can include all items or focus on particular parts of a deal, depending on the type of category.

Tips going forward

Here’s some do’s and don’ts to take away for your next project.

Do:

✅ Be sure to clarify who’s responsible for fixing if two policies overlap between a producer and contractor.

✅ Ask about coverage limitations and exceptions.

✅ Document everything - every aspect of your contract and every part of your process should be written down when you talk about things that could be binding.

✅ Ask questions if there’s something you don’t recognize, especially with jargon (terms that are industry specific that are hard to make sense of).

✅ Let your contractor negotiate warranties and guarantees on your behalf for manufacturers -  usually they have more power or a more solid relationship.

Don’t:

❌ Tolerate unclear terms. For your benefit as well as theirs, it should be concise.

❌ Ignore your gut - if you feel they are not looking out for your best interests, believe in your own judgment.

❌ Forget to research the company in depth through reviews and personal testimonials online.

❌ Be afraid to get a higher authority involved.

Common Scams

Guarantees are not usually legally binding, so some construction companies may try to take advantage of this. Warranties could be binding, but must be written in a way that can be proven in court. Usually both are types of promises that are hard to pinpoint exactly what was meant unless it is written down exactly. The general industry of construction can be a tough world. Whether they ghost you to avoid all responsibility or explain that it's not their fault, be sure to follow up with what they can do for you. If they refuse or do not respond at all, don’t be afraid to obtain legal counsel to get compensation for possible damages they are responsible for.

Conclusion

We hope you feel more prepared to face the industry with this new advice to guide you. Staying alert and aware of possible dangers will help your preparation tenfold when you are deciding on contractors for your projects. If you have any questions, do not be afraid to reach out to Ryan Straley, BiiLt’s resident expert, at [email protected]. Straley has over 20 years of experience in the construction industry.  

Resources:

• Understanding Construction Guarantees: Types and Functions - DesignHorizons
• What warranties or guarantees should I expect from a contractor in a building project? | Stellar Construction 
• Construction Warranties And Guarantees
• Types Of Construction Guarantees | Blackstone Solicitors
• Construction Warranty Types: What Are Contractors Responsible for — and for How Long? | Procore
• Warranties for New Homes | Consumer Advice
• Guarantee vs Warranty in Construction
• Resolving Warranty and Guaranty Confusion in Construction | Blank Rome LLP
• Warranties, representations and guarantees - Construction Law Made Easy