Chapter 21: Warranties
caveat emptor
"let the buyer beware" the law recognizes that consumers and other purchasers and lessees of goods need greater protection.
special warranties that the UCC imposes on sellers and lessors
1) warranty of good title 2) warranty of no security interests 3) warranty against infringements 4) warranty of no interference these are also implied warranties.
Magnuson-Moss Warranty Act
a federal statute that covers written warranties related to consumer products. sellers or lessors who make express warranties must label their warranties as either "full" or "limited." sellers or lessors who make express written warranties relating to consumer products are forbidden from disclaiming or modifying the implied warranties or merchantability and fitness for a particular purpose. the act authorizes warrantors to establish an informal dispute-resolution procedure.
foreign substance test
a food product is unmerchantable if a foreign object in that product causes injury to a person.
warranty against infringements
a seller or lessor who is a merchant warrants that the goods are delivered free of any third-party patent, trademark or copyright claim.
disclaiming implied warranties
all implied warranties of quality may be disclaimed. rules for disclaiming: - "as is" disclaimer: expressions such as "as is", "with all faults," or other language that makes it clear to the buyer that there are no implied warranties disclaims all implied warranties. - if the "as is" disclaimer is not used, a disclaimer of the implied warranty of merchantability must specifically mention the term "merchantability." the disclaimer may be oral or written. - if the "as is" disclaimer is not used, a disclaimer of the implied warranty of fitness for a particular purpose need not specific language, but it must be in writing.
value
an affirmation of the _________ of goods does not create an express warranty.
implied warranty of fitness for a particular purpose
contained in the UCC. this applies to both merchants and nonmerchants. this implied warranty arises when: 1) the seller or lessor has reason to know the particular purpose for which the buyer is purchasing or leasing the goods. 2) the seller or lessor makes a statement that the goods will serve this purpose. 3) the buyer or lessee relies on the seller or lessor's skills and judgement and purchases the goods.
express warranties
created when a seller or lessor affirms that the goods he is selling or leasing meet certain standards of quality, description, performance, or condition. can be written, oral, or inferred from the seller's conduct. generally made to induce consumers to buy or lease their products. buyers and lessees can recover for breach of an express warranty if the warranty induced them to purchase the product.
conspicuously
disclaimer must be _________ displayed to be valid.
disclaiming express warranties
express warranties can be limited only if the warranty disclaimer and the warranty can be reasonably construed with each other.
implied warranty of merchantability
if a seller or lessor is a merchant, the sales or lease contracts contains this implied warranty unless it is properly disclaimed. this implied warranty requires the following standards are met: 1) the goods must be fit for the ordinary purpose for which they are used. 2) the goods must be adequately contained and packaged. 3) the goods must have consistent quality and quantity. 4) the goods must conform to any promise or fact made on labels. 5) other users of the goods would not object to their quality. 6) to be classified as a certain grade, goods must meet the average range of quality. case: Osorio v. One World Technologies
consumer expectation test
majority of states have adopted this. the court asks what a consumer would expect to find or not find in food or drink that he consumes.
implied warranties
not expressly stated in the sales or lease contract but instead are implied by law. most common forms are: - implied warranty of fitness for human consumption. - implied warranty of fitness for a particular purpose. - implied warranty of merchantability.
warranty of good title
sellers of goods warrant that they have valid title to the goods and that the transfer of title is rightful.
warranty of no security interests
sellers of goods warrant the goods they sell are delivered free from any third-party security interests, liens, or encumbrances that are unknown to the buyer.
warranties
the buyer's or the lessor's assurance the the goods meet certain standards. they may either be expressly stated or implied by law. if the buyer or lessor fails to meet a warranty, the buyer or lessee can sue for breach of warranty.
amount of compensatory damages recoverable for breach of warranty
the difference between the value of goods as warranted and the actual value of the goods accepted at the time and place of acceptance.
warranty of no interference
the lessor warrants that no person holds a claim or an interest in the goods that arose from an act or omission of the lessor that will interfere with the lessee's enjoyment of the leased goods.
full warranty
the warrantor guarantees that a defective product will be repaired or replaced free during the warranty period. a time limit on the full warranty must be indicated.
limited warranty
the warrantor limits the scope of the warranty in some way. ex: covering the cost of parts but not the labor to fix a defective product. *time limitation does NOT make a warranty a limited warranty.
statement of opinions
these are commendations of goods, which do not create excess warranties.
implied warranty of fitness for human consumption
this is in the common law and the UCC (the UCC incorporates this warranty within the implied warranty of merchantability). this implied warranty applies to food and drink consumed on or off the seller's premises. states use one of the following two tests to determine whether there is a breach: 1) foreign substance test 2) consumer expectation test *only applies to merchants.
