Final answer:
A warranty is a commitment by the seller to repair or replace a defective product at no cost, covering parts, labor, and transportation. Service contracts are paid extensions of this promise, offering longer-term protection.
Step-by-step explanation:
A warranty is a promise provided by the seller, assuring the buyer that the product will be repaired or replaced without any cost in case of defects, including costs of parts, labor, or transportation.
In addition to warranties, sellers often offer service contracts, which are a paid extension of the obligation to repair or replace the product in case of malfunction. Though service contracts involve an extra fee, they offer prolonged protection beyond the typical warranty scope and are common for significant purchases like cars, appliances, and houses.