LES 305 Ch. 11

Inadequate Warnings

1. the foreseeable risks of harm posed by the product could have been reduced or avoided by the provision of reasonable instructions or warnings by the seller 2. the omission of the instructions or warnings renders the product not reasonably safe.

Strict Product Liability

A defendant may be liable regardless of intent or exercise of reasonable care. It is imposed as a public policy matter.

Merchant

A person who is engaged in the purchase and sale of goods. Deals in goods of the kind involved in the contract. A person who by occupation, holds themselves out as having knowledge and skill particular to the goods involved in the transaction.

Unreasonably Dangerous Products

A product that is defective to the point of threatening a consumer's health and safety. It is dangerous beyond expectation of the ordinary consumer or if a less dangerous alternative was economically feasible for the manufacturer, but they failed to produce it.

Open Terms (under the UCC)

A sales or lease contract will NOT fall for indefiniteness even if one or more terms are left open, as long as: 1. the parties intended to make a contract 2. there is a reasonably certain basis for the court to grant an appropriate remedy

Express Warranty

A seller's (lessor's) oral or written promise, ancillary to an underlying sales or lease agreement as to the quality, description, or performance of the goods sold or leased.

Predominant Test

A test courts use to determine whether a contract is primarily for the sale of goods or for the sale of services.

Implied Warranty of Merchantability

A warranty that goods being sold or leased are reasonably fit for the general purpose for which they are sold or leased, are properly packaged and labeled, and are of proper quality. The warranty automatically arises in every sale or lease of goods made by a merchant who deals in goods of the kind sold or leased.

Implied Warranty of Fitness for a Particular Purpose

A warranty that goods sold or leased are fit for a particular purpose. The warranty arises when any seller or lessor knows the particular purpose for which a buyer or lessee will use the goods and knows that the buyer or lessee is relying on the skill and judgment of the seller or lessor to select suitable goods.

Implied Warranty

A warranty that the law derives by implication or inference from the nature of the transaction or the relative situation or circumstances of the parties.

Warranty Disclaimers

Express warranties can be negated or limited by specific and clear language called to the buyer's Attention. Implied warranties can be disclaimed by the expression "as is," or "with all faults'" or some similar phrase. A merchantability disclaimer must mention merchantability, doesn't need to be written but fitness for a particular purpose disclaimer must be written.

Conforming Goods

Goods that conform to contract specifications.

Firm Offer (under the UCC)

If a merchant gives in signed writing that an offer will remain open, the offer is irrevocable, WITHOUT consideration for the stated period of time (or a reasonable period of time).

Additional Terms (under UCC)

If an offeree's response indicates a DEFINITE acceptant, a contract is formed, even if the acceptance includes terms in addition to or different from the offer, as long as they don't materially. Both parties must be merchants.

Lease Agreement

In regard to the lease of goods, an agreement in which one person (the lessor) agrees to transfer the right to the possession and use of property to another person (the lessee) in exchange for rental payments.

Warranties Implied from Prior Dealings or Trade Custom

In the absence of evidence to the contrary, when both parties to a sales or lease contract have knowledge of a well recognized trade custom, the courts will infer that both parties intended for that trade custom to apply to their contracts.

Proving a Defective Condition

It must be shown that at the time of the injury, the product's condition was essentially the same as it was in the hands of the manufacturer or seller.

Title Warranties

Seller warrants it has a good title and the transfer of title is rightful, it will be delivered free of encumberances, and is free of infringments.

Contract Between Merchants

The additional terms in the parties' separate standard forms can automatically become part of the contract. (Rationale: we don't want to slow down business.)

Product Liability

The legal liability of manufacturers, sellers, and lessors of goods to consumers, users, and bystanders for injuries or damages that are caused by the goods.

Sale

The passing of title to property from the seller to the buyer for a price. The price may be payable in money, goods, or services.

Example of Design Defect

To succeed on this theory, a plaintiff has to show that there is a reasonable alternative design. A defendant is liable ONLY when the harm was reasonably preventable.

Lease

Under Article 2A of the UCC, a transfer of the right to possess and use goods for a period of time in exchange for payment.

Manufacturing Defects

When a product departs from its intended design even though all possible care was exercised in the preparation and marketing of the product.

Communication of Acceptance

When acceptance by performance is reasonable and offeror who is not notified of acceptance within a reasonable time may treat the offer as having lapsed before acceptance.

Design Defects

When the foreseeable risks of harm posed by the product could have been reduced/avoided by the adoption of a reasonable alternative design by the seller or other distributor, or a predecessor in the commercial chain of distribution, and the omission of the alternative design renders the product not reasonably safe.

When do contracts for a sale of goods and lease need to be signed in order to be enforcable?

sale is when the prices of goods is $500 or more. lease is when the payments are $1000 or more.