A Introduction

18.1 Most offshore construction contracts will contain what is described as either a ‘warranty’ or a ‘guarantee’ clause in which certain undertakings are made by the Contractor about the condition of the work and obligations imposed on it in relation to the same. The words ‘warranty’ and ‘guarantee’, when applied to contractual performance, are often used interchangeably. This is apt to cause confusion as, when two different words are used in the same context, it is natural to assume they are intended to convey two different meanings. Therefore, a commercial person may be concerned that there is a subtle but important legal difference between the Contractor guaranteeing that the works are free from defects for a specified period following delivery, and the Contractor providing a warranty to the same effect. Both words usually mean the same thing, namely a binding promise.1 If we were to don our pedantic English lawyer hats, we could describe a guarantee being more in the nature of a promise that something will not be done, for example a guarantee that the works will not fail for a fixed period following delivery, whereas a warranty is more in the nature of an undertaking that something will be done. For example, if the works do fail within the specified period, the Contractor will rectify such defects.