Warranty, Guarantee and Indemnity Clauses

Read the short text about warranty, guarantee and indemnity clauses, then select the correct option from the list to complete (1) ….. to (10) ….. .

There are certain obligations which ensure the performance of the contract and also provide remedy for possible future problems.

Warranty clauses ___1___ that the performance of the contacting party, at the time of the conclusion of the contract, fulfills all statutory (implied) and contractual (express) quality obligations. Warranties are primarily ___2___ by the Hungarian Civil Code, and there are various types, such as the warranty of title or the warranty of merchantability. If a warranty is ___3___, the non-breaching party may claim damages, repair, replacement, price reduction or if there is a material breach of the contract, they may even ___4___ the contract.

Guarantee clauses, on the other hand, are usually ___5___ provided by the seller or the manufacturer beyond the mandatory statutory warranty provisions. They are ___6___ commitments which may offer extended coverage, repair services, or other benefits to the buyer. While warranty is a legal requirement, guarantee is usually a contractual commitment and is ___7___ to the terms agreed upon by the parties.

An indemnity clause contains the promise to indemnify , i.e. to ___8___ the other party in full if a particular (triggering) event happens and the other party ___9___ loss or damage as a result. This is sometimes called to ‘make good a loss’. It means to compensate all of the loss, not just part of it. Indemnity clauses are typical in insurance policies, since they are undertakings by insurance service providers to protect policy-holders against future damage, loss, injury, or other harmful events in return for a fee called a ___10____. The amount paid under this obligation can be called ‘indemnification’.

Now, press the START button to select the correct option from the list to complete (1) ….. to (10) ….. .