Elaine has a terrific post on the history of warranties. As there were little products at that time, we didnt have product warranties. So what were warranties for? Buying brides!
In the early days of exchange, humans mostly traded consumables like food or stone tools. There wasn’t much room for misrepresentation because what you saw was what you got.
The was one exception: Brides. In many ancient civilizations, families sold their unmarried daughters to prospective bridegrooms. Barbaric, I know.
A bride was often the biggest purchase a man would ever make (these days it’s a house). But there was no way to measure the quality of the good before buying. A bridegroom couldn’t exactly, uh, take a test drive. To further complicate things, the brides were selected and paid for before they reached marriageable age. It’s kind of like how Tesla Model 3’s require a reservation deposit two years before the expected delivery date.
To protect buyers in uncertain markets, tribes created procedures to prevent deceptive business practices that were eventually codified into law.
We’ll start with Ancient Sumer.
From Sumer to Babylon to India, she covers variety of warranty regimes….
In the end:
As legal codes evolved, they mostly reflected what was already customary practice.
It would be another several thousand years before George Akerlof published his model on information economics in “The Market for Lemons”. Information asymmetry between buyers and sellers can create messed-up incentives that cause markets to break down, particularly in the case of one-time purchases. In situations where the quality of a good is uncertain at time of purchase, fraud protection laws can help make business practices fair for both consumers and providers, ensuring peace and prosperity for all.