PARLIAMENTARY WRITTEN QUESTION
Warranties (11 November 2020)

To ask the Secretary of State for Business, Energy and Industrial Strategy, what steps he has taken to ensure that warranties on the products of companies that become insolvent and then reopen are honoured.

Asked by:
Dame Karen Bradley (Conservative)

Extended warranties form a binding contract between the party offering the extended warranty and the consumer. Under UK law, guarantees and warranties are not required to be given, but are benefits in addition to consumers’ rights under the Consumer Rights Act 2015. Where the business of an insolvent company is sold, the purchasing entity is under no statutory requirement to honour a warranty provided by the insolvent company. Imposing such an obligation could impact on the prospects for the sale of viable parts of a business, reducing the returns to creditors, as well as harming the chances of saving jobs through a successful business sale.

Answered by:
Paul Scully (Conservative)
16 November 2020