BLaw Ch21 Warranties

express warranty货物品质保证

Express warranties are created when a seller or lessor affirms that the goods he or she is selling or leasing meet certain standards of quality, description, performance, or condition. can be either written, oral, or inferred from the seller's conduct. It is not necessary to use formal words such as warrant or guarantee to create an express warranty. can be made by mistake because the seller or lessor does not have to specifically intend to make the warranty. Sellers and lessors are not required to make express warranties. Generally, express warranties are made to entice consumers and others to buy or lease their products. often found in advertisements, brochures手册, catalogs, pictures, illustrations, diagrams, blueprints, and so on. Buyers and lessees can recover for breach of an express warranty if the warranty induced the buyer to purchase the product or the lessee to lease the product.

Creation of an Express Warranty

1. All affirmations of fact or promise made about the goods e.g.Promises are statements such as "This car will go 100 miles per hour" or "This house paint will last at least five years." 2. Any description of the goods e.g. Descriptions of goods include terms such as Idaho potatoes and Michigan cherries. 3. Any model or sample of the goods e.g.A model of an oil-drilling rig or a sample of wheat taken from a silo creates an express warranty. Buyers and lessees can recover for a breach of an express warranty if the warranty was a contributing factor that induced the buyer to purchase the product or the lessee to lease the product. Generally, a retailer is liable for the express warranties made by manufacturers of goods it sells. A manufacturer is NOT liable for express warranties made by wholesalers and retailers unless the manufacturer authorizes or ratifies a warranty.

statement of opinion (puffing)

A commendation of goods, made by a seller or lessor, that does not create an express warranty. e.g. A used car salesperson's says, "This is the best used car available in town," but this statement does not create an express warranty because it is an opinion and mere puffing. However, a statement such as "This car has been driven only 20,000 miles" is an express warranty because it is a statement of fact. e.g. Statements such as "This painting is worth a fortune" or "Others would gladly pay $20,000 for this car" do not create an express warranty because these are statements of value and not statements of fact.

magnuson-moss warranty act

A federal statute that regulates written warranties on consumer products. The act does not require a seller or lessor to make an express written warranty. However, sellers or lessors who do make express warranties are subject to the provisions of the act. Limited warranties are made more often by sellers and lessors than are full warranties. The act stipulates that sellers or lessors who make express written warranties related to consumer products are forbidden from disclaiming or modifying the implied warranties of merchantability and fitness for a particular purpose. The act authorizes warrantors to establish an informal dispute-resolution procedure, such as arbitration. A successful plaintiff can recover damages, attorney's fees, and other costs incurred in bringing the action.

conspicuous

A requirement that warranty disclaimers be noticeable to a reasonable person. A heading printed in uppercase letters or a typeface that is larger or in a different style than the rest of the body of a sales or lease contract is considered to be conspicuous. Different-color type is also considered conspicuous.

warranty

A seller's or lessor's express or implied assurance to a buyer or lessee that the goods sold or leased meet certain quality standards.

warranty disclaimer

A statement that negates express and implied warranties.

warranty of no security interests

A warranty in which sellers of goods warrant that the goods they sell are delivered free from any third-party security interests, liens, or encumbrances that are unknown to the buyer. e.g. Albert purchases a refrigerator on credit from Appliance World, an appliance store. The store takes back a security interest in the refrigerator. Before completely paying off the refrigerator, Albert sells it to Monica for cash. Monica has no knowledge of the store's security interest in the refrigerator. After Albert misses several payments, the appliance store discovers that Monica has the refrigerator and repossesses the refrigerator. Monica can recover against Albert, based on his breach of warranty of no security interests in the goods The warranties of good title and no security interests may be excluded or modified by specific language. e.g. , specific language such as "seller hereby transfers only those rights, title, and interest as he or she has in the goods" is sufficient to disclaim these warranties. General language such as "as is" or "with all faults" is NOT specific enough to be a disclaimer to the warranties of good title and no security interests. The special nature of certain sales (e.g., sheriffs' sales) tells the buyer that the seller is not giving title warranties with the sale of the goods.

warranty of no interference (warranty of quiet possession)

A warranty in which 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 his or her leasehold interest. e.g. Occi-Petroleum, as lessor, leases a piece of heavy equipment to Aztec Drilling. Occi-Petroleum later gives a security interest in the equipment to City- Bank as collateral for a loan. If Occi-Petroleum defaults on the loan to CityBank and CityBank repossesses the equipment from Aztec, Aztec can recover damages from Occi-Petroleum for breach of the warranty of no interference.

warranty of good title

A warranty in which the seller warrants that he or she has valid title to the goods he or she is selling and that the transfer of title is rightful. e.g. Ingersoll-Rand owns a heavy-duty crane. A thief steals the crane and sells it to Turner Construction. Turner Construction does not know that the crane is stolen. If Ingersoll-Rand discovers that Turner Construction has the equipment, it can reclaim it. Turner Construction, in turn, can recover against the thief for breach of the warranty of title. This is because the thief impliedly warranted that he had good title to the equipment and that the transfer of title to Turner Construction was rightful.

implied warranty of fitness for human consumption

A warranty that applies to food or drink consumed on or off the premises of restaurants, grocery stores, fast-food outlets, coffee shops, bars, vending machines, and other purveyors of food and drink. The UCC incorporates this warranty within the implied warranty of merchantability. Restaurants, grocery stores, fast-food outlets, coffee shops, bars, vending machines, and other purveyors of food and drink are all subject to this warranty. Two tests...

implied warranty of fitness for a particular purpose

A warranty that arises when a seller or lessor warrants that the goods will meet the buyer's or lessee's expressed needs. This implied warranty is breached if the goods do not meet the buyer's or lessee's expressed needs. The warranty applies to BOTH merchant and nonmerchant sellers and lessors. The warranty of fitness for a particular purpose is implied at the time of contracting if 1. The seller or lessor has reason to know the particular purpose for which the buyer is purchasing the goods or the lessee is 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's or lessor's skill and judgment and purchases or leases the goods. e.g. Susan wants to buy lumber to build a small deck in her backyard. She goes to Joe's Lumber Yard to purchase the lumber and describes to Joe, the owner of the lumber yard, the size of the deck she intends to build. Susan also tells Joe that she is relying on him to select the right lumber for the project. Joe selects the lumber and states that the lumber will serve Susan's purpose. Susan buys the lumber and builds the deck. The deck collapses because the lumber was not strong enough to support it. Susan can sue Joe for breach of the implied warranty of fitness for a particular purpose.

warranty against infringement

An automatic warranty provided by a seller or lessor who is a merchant who regularly deals in goods of the kind sold or leased that warrants that the goods are delivered free of any third-party patent, trademark, or copyright claim. e.g. Adams Company, a manufacturer of machines that make shoes, sells a machine to Smith & Franklin, a shoe manufacturer. Subsequently, Nerdette claims that she has a patent on the machine. Nerdette proves her patent claim in court. Nerdette notifies Smith & Franklin that the machine can no longer be used without her permission and the payment of a fee to her. Smith & Franklin may rescind the sales contract with Adams Company, based on the breach of the warranty against infringement.

"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. An "as is" disclaimer is often included in sales contracts for used products.

Full warranty

For a warranty to qualify as a full warranty, the warrantor must guarantee that a defective product will be repaired or replaced free during the warranty period. The warrantor must indicate whether there is a time limit on the full warranty (e.g., "full 36-month warranty").

Disclaimer of the implied warranty of fitness for a particular purpose

If the "as is" type of disclaimer is not used, a disclaimer of the implied warranty of fitness for a particular purpose may contain general language, without specific use of the term fitness. The disclaimer has to be in WRITING.

Disclaimer of the implied warranty of merchantability

If the "as is" type of disclaimer is not used, a disclaimer of the implied warranty of merchantability must specifically mention the term merchantability for the implied warranty of merchantability to be disclaimed. These disclaimers may be oral OR written.

Limited warranty

In a limited warranty, the warrantor limits the scope of the warranty in some way. A warranty that covers the costs of parts but not the labor to fix a defective product is a limited warranty.

warranty disclaims in software licenses

Most software companies license their software to users. A software license is a complex contract that contains the terms of the license.

caveat emptor 一经出售概不负责

The doctrine of caveat emptor—"let the buyer beware"—governed the law of sales and leases for centuries. Finally, the law recognized that consumers and other purchasers and lessees of goods needed greater protection.

consumer expectation test

The majority of states have adopted the mod- ern consumer expectation test to determine the merchantability of food products. Under this test, the court asks what a consumer would expect to find or not find in food or drink that he or she consumes. e.g. Under this test, the implied warranty would be breached if a person were injured by a chicken bone while eating a chicken salad sandwich. This is because a consumer would expect that the food producer would have removed all bones from the chicken. Under this test, the implied warranty would not be breached if a person were injured by a chicken bone while eating fried chicken. This is because a consumer would expect to find bones in fried chicken.

foreign substance test

Under the foreign substance test, a food product is unmerchantable if a foreign object in that product causes injury to a person. e.g. Under this test, the implied warranty would be breached if a person were injured by eating a nail in a cherry pie. This is because a nail is a foreign object in the cherry pie. The implied warranty would not be breached if a per- son were injured by eating a cherry pit in the pie. This is because the cherry pit is not a foreign object in the cherry pie.

implied warranty of merchantability

Unless properly disclosed, a warranty that is implied that sold or leased goods are fit for the ordinary purpose for which they are sold or leased, as well as other assurances. 1. The goods must be fit for the ordinary purposes for which they are used. (e.g. chair) 2. The goods must be adequately contained, packaged, and labeled.(The implied warranty of merchantability applies to a milk bottle as well as to the milk inside the bottle.) 3. The goods must be of an even kind, quality, and quantity within each unit.(All the goods in a carton, package, or box must be consistent.) 4.The goods must conform to any promise or affirmation of fact made on the container or label. (The goods must be capable of being used safely in accordance with the instructions on the package or label.) 5. The quality of the goods must pass without objection in the trade.( The goods must be of such quality that other users of the goods would not object to their quality.) 6. Fungible goods must meet a fair average or middle range of quality. (To be classified as a certain grade, such as pearl millet grain (Pennisetum glaucum) or iron ore (magnetite Fe3O4), goods must meet the average range of quality of that grade.) The implied warranty of merchantability does not apply to sales or leases by nonmerchants or casual sales.

compensatory damages

Where there has been a breach of warranty, the buyer or lessee may sue the seller or lessor to recover compensatory damages. The amount of recoverable compensatory damages is generally equal to the difference between (1) the value of the goods as warranted and (2) the actual value of the goods accepted at the time and place of acceptance. A purchaser or lessee can recover for personal injuries that are caused by a breach of warranty.