ACCT 324: Chapter 25

The states are given the following three choices regarding third-party beneficiaries of warranties

(1) Seller's warranties extend to the buyer's household members and guests, (2) Seller's warranties extend to any reasonable and foreseeable user, (3) Seller's warranties extend to anyone injured by the good

Warranty

(1) an assurance, either express or implied, by one party that the other party can rely on its representations of fact. (2) In sales, a binding promise regarding a product in the event that the product does not meet the manufacturer's or seller's promises

The only exceptions to title warranties occur if they are

(1) disclaimed or modified by specific language in the contract or (2) if the seller is obviously unable to guarantee title, as would be the case, for instance at a sheriff's sale of seized goods

How can a buyer wave both implied and express warranties

(1) failing to examine goods for which an express warranty was created by a sample or model or (2) failing to comply with the seller's request to inspect the goods

While no warranties automatically arise under the common law, the UCC assumes that the seller

(1) has goods and valid title to the goods, (2) has the right to transfer title free and clear of any liens, judgments, or infringements of intellectual property rights of which the buyer does not have knowledge

If the good is sold for more than $15, the written warranty must disclose in readable fashion a number of items of information

(1) names and (2) addresses of the warrantors, (3) any limitations on the warranty, and (3) the procedures required to activate the warranty remedies

the only implied warranty is the warranty of assignability under this

At common law

quintessential case defining and illustrating the implied warranty of merchantability

Blue Ship Team Room and Ms. Webster

are explicitly stated

Express warranties

is any description of the good's physical nature or its use, either in general or specific circumstances, that becomes part of the contract. A material term of the contract. It can be oral or written

Express warranty

are automatically, as a matter of law, injected into the contract

Implied warranties

include the implied warranty of merchantability the implied warranty of particular purpose, and the implied warranty of trade usage

Implied warranties of quality under the UCC

This warranty comes about when a seller of lessor knows or has reason to know (1) why the buyer or lessee is purchasing or leasing the goods in questions and (2) that the buyer or lessee is relying on him or her to make the selection. Under this warranty, the seller or lessor does not have to be a merchant

Implied warranty of fitness for a particular purpose

an assurance, inferred in every sale unless clearly disclaimed, that merchantable goods will conform to a reasonable performance expectation. The purchases must have purchase or leased the goods from a merchant

Implied warranty of merchantability

an assurance, inferred in the context of certain UCC sales, depending on the circumstances, that can be created through a well-accepted course of dealing or trade usage

Implied warranty of trade usage

requires that if a seller decides to issue a written warranty for a consumer good, the seller must indicate whether that warranty is a full or a limited warranty. This applies to any consumer good sold for more than $10

Magnuson Moss Act

statements of opinion are often salespersons' exaggerations and are known as this. Generally does not create an express warranty because it is not considered a representation of facts

Puffing

are assurances by one party that the other party can rely on its representations of fact

Warranties

an assurance, inferred in every UCC sales transaction, that the seller has good and valid title to the goods and has the right to transfer the title free and clear of any liens, judgements, or infringements of intellectual property rights of which the buyer does not have knowledge

Warranty of title

An express warranty should not be confused with an implied warranty for the fitness of

a particular purpose

If an implied warranty is to be disclaimed, the seller must do so in

clear, unambiguous conspicuous language

The UCC changed the law of warranties which was originally covered by

common law

Three basic categories of warranties

express warranties, implied warranties of title, and implied warranties of quality

A buyer may also waive her warranty rights under the contract by

failing to comply with the statute of limitations

means that if the good fails or is defective, the good or its defective part will be replaced. If replacement cannot be timely effected, the buyer has the right to a refund or a full replacement

full warranty

If the written warranty is silent, it is presumed to be a

full warranty,

Most jurisdictions choose which of the states' choices for how to regard third-party beneficiaries of warranties

seller's warranties extend to any reasonable and foreseeable user

When a party "assigns" a contract to another party

the assignor is impliedly guaranteeing that the rights being assigned are valid

If the buyer is aware of any problem with the transfer of goods who is at risk by purchasing them

the buyer