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What is a guarantee statement? A guarantee statement is a written commitment in which a party guarantees a specific characteristic, performance, or outcome, in addition to the rights already granted by law. For example, a supplier guarantees that a machine will operate trouble-free for two years, or a parent company guarantees the obligations of a subsidiary. The statement creates an independent obligation that exists separately from, but alongside, statutory liability. Below, you can read what a guarantee statement is, how it relates to statutory conformity, and how it differs from suretyship.
The short answer
- What: a written commitment in which someone vouches for a characteristic, performance, or outcome.
- In addition to the law: the guarantee exists alongside the statutory conformity of Article 7:17 of the Dutch Civil Code, not instead of it.
- Independent: an independent guarantee is separate from an underlying debt and is therefore stronger than a suretyship.
- Informal: there is no prescribed form, but recording it in writing is advisable.
- Limits: for consumers, a warranty may not restrict statutory rights.
What exactly is a warranty statement?
A guarantee statement records a promise for which the giver is liable if the promise is not fulfilled. The core principle is that the guarantor promises a certain result: a product that is sound for a specific period, performance that meets defined requirements, or performance by a third party. If the promise is not fulfilled, the beneficiary may claim performance or compensation based on the guarantee itself, without having to demonstrate that there is a breach in a broader sense.
This is where the guarantee differs from an ordinary contractual agreement: the guarantor consciously assumes the risk of a specific outcome. This makes the declaration of guarantee a powerful instrument, but also an obligation that you should not enter into lightly.
Warranty versus legal conformity
A common mistake is thinking that a product without a warranty offers no protection. That is incorrect. Article 7:17 of the Dutch Civil Code stipulates that a purchased item must conform to the agreement: it must possess the characteristics that the buyer could reasonably expect. This is called conformity and applies at all times, even without any declaration of warranty. A warranty is therefore not a replacement for this statutory right, but an addition upon it.
When selling to consumers, that difference is particularly important. A warranty must never restrict the consumer's statutory rights. A statement suggesting that the buyer has no further claims after the expiration of a manufacturer's warranty is misleading, because statutory conformity may extend beyond the warranty period. A warranty can only improve the buyer's position, not worsen it.
Independent guarantee versus suretyship
A declaration of guarantee is often used to vouch for the obligations of another party, for example when a parent company acts as guarantor for a subsidiary. In such cases, the difference with suretyship is important. Suretyship, regulated in Article 7:850 of the Dutch Civil Code, is accessory: the surety can only be held liable if and to the extent that the principal debtor owes something. Defenses of the principal debtor carry over to the surety.
An independent guarantee works differently. It stands apart from the underlying relationship. The guarantor must pay or perform as soon as the conditions of the guarantee have been met, regardless of the defenses in the underlying relationship. For the beneficiary, an independent guarantee is therefore stronger and more secure than suretyship. For the guarantor, however, it entails a heavier obligation, as he cannot hide behind disputes between the other parties.
When do you use a warranty statement?
Guarantee statements take many forms in the SME sector: a product guarantee for customers, a performance guarantee associated with a contract, a group guarantee where a holding company vouches for an operating company, or a guarantee upon the acquisition of a business in which the seller guarantees specific characteristics of the company. In all these cases, the goal is the same: to provide the beneficiary with additional security.
A practical example. A supplier of industrial pumps issued a guarantee that its pumps would run without failure for three years. When a pump failed after two years, the customer could invoke the guarantee directly and demand a replacement, without first having to engage in an extensive discussion about hidden defects. The guarantee significantly expedited the handling of the matter.
Honest recommendation
You do not always need a lawyer for a simple product warranty with short, clear text. As long as the commitment is limited and clear, and you respect the statutory conformity of Article 7:17 of the Dutch Civil Code, you can often formulate a standard warranty yourself.
Be sure to have a guarantee statement drafted or reviewed as soon as there is really something at stake: in the case of a group guarantee, a guarantee in the event of a business acquisition, or an independent guarantee for the obligations of another party. The difference between an independent guarantee and suretyship has significant consequences for your risk, and unclear wording can unintentionally obligate you much further than you intended.
Want to know more or need help? View our page on a warranty statement, read how to go about drafting a warranty statement , and discover when you might consider having a warranty statement drawn up .
Frequently Asked Questions
A declaration of guarantee is a written promise in which a party guarantees a specific characteristic, performance, or outcome, in addition to the rights already granted by law. If the promise is not fulfilled, the beneficiary may claim performance or compensation based on the guarantee.
The statutory conformity of Article 7:17 of the Dutch Civil Code stipulates that a purchased item must conform to the agreement and applies at all times, even without a warranty. A warranty is an additional promise on top of this statutory right and can only improve the buyer's position, not limit it.
Suretyship under Article 7:850 of the Dutch Civil Code is accessory: the surety is only liable if the principal debtor owes something and can invoke the latter's defenses. An independent guarantee stands apart from the underlying relationship and must be fulfilled as soon as the guarantee conditions have been met.
No. When selling to consumers, a warranty may never limit statutory rights. Statutory conformity may extend longer than a manufacturer's warranty. A statement suggesting that the buyer has no further claims thereafter is misleading.
There is no legally prescribed form, so a guarantee can in principle also be given verbally. However, recording it in writing is strongly recommended, as the scope, duration, and conditions of the guarantee are otherwise difficult to prove in the event of a dispute.
For example, a product warranty for customers, a performance guarantee for a contract, a group guarantee where a holding company guarantees an operating company, or a guarantee in the event of a business acquisition. The goal is always to provide the beneficiary with additional security.
The guarantor knowingly assumes the risk of a specific outcome and, in the case of an independent guarantee, cannot hide behind disputes between other parties. Unclear wording may impose further obligations on you than intended, so be cautious and precise.
