Chapter 21 "WArranties" BUL3320

Express Warranty

Express warranties are created when a seller or lessor states orally, in writing, or through inferences that the goods meet a certain standard of quality, performance, or condition. No formal words are necessary to create an express warranty. Sellers and lessors are not required to make warranties.

Implied Warranty of Fitness for Human Consumption

Both common law and the UCC apply this warranty to food and drink. The states allow recovery under the foreign substance test (a food product is unmerchantable if a foreign object in that product causes injury to a person) and the consumer expectation test (the court asks what a consumer would expect to find or not to find in food or drink that they consume).apply when injured with a bone eating chicken salad but not fried chicken.

Damages Recoverable for Breach of Warranty

Compensatory damages and personal injury damages can be recovered. The amount to be recovered is generally equal to the difference between the value of the goods as warranties and the actual value of the goods accepted.

Creation of an Express Warranty

Express warranties are created when the seller or lessor indicate that goods conform to all affirmations of fact or promises made ("this car will go 100 miles per hour"), any description of the goods, any model or sample of the goods (a model of an oil-drilling rig or a sample of wheat) .

Warranty Disclaimers

Express warranties can be limited by disclaimers, if the warranty and disclaimer can be construed together. Implied warranties of quality can be disclaimed by use of "as is," "with all faults," etc. Implied warranties of merchantability must be specifically disclaimed, while implied warranties of fitness can be generally disclaimed.

Implied Warranty of Merchantability

If the seller is a merchant normally dealing in the goods sold, there is an implied warranty of merchantability that the goods are fit for the purpose sold ( a chair must be able to safely perform the function of a chair) , that they are adequately contained, packaged, and labeled (apply to a milk bottle as well as to the milk inside the bottle), and that they are of an even kind, quality, and quantity within each unit (all the goods in a carton, package, or box must be consistent). This warranty also means that the goods conform to all promises on their container, that their quality would pass without objection in the trade, and if they are fungible goods, that they are of at least average quality for the type of goods that they are. The implied warranty of mercahntability does not apply to sales or leases by nonmerchants or casual sales. (does not apply when one neighbor sell a lawn mower to another neighbor)

Warranties of Title and Possession (Warranty of No Interference)

In a warranty of quiet possession, the lessor warrants that no one holds a claim or interest in the property.

Statement of Opinion (Puffing)

Puffing and commendation of goods do not create an express warranty, nor does as affirmation of the value of the goods. EX: "this is the best used car available in town" it is an opinion and mere puffing. "this painting is worth a fortune" statement of value that does not create an express warranty.

Warranties of Title and Possession (Warranty of No Security Interests)

Sellers automatically warrant that their goods are free from third-party security interests.

Implied Warranty of Fitness for a Particular Purpose

The UCC contains an implied warranty of fitness at the time of contracting if the seller knows the particular purpose that the buyer will be using the goods for, the seller makes a statement that the goods will serve that purpose, and the buyer relies on the statement.

Magnuson-Moss Warranty Act

This Act (federal statute) allows for full and limited warranties of consumer products. Administered by the FTC To qualify for a full warranty, the seller must guarantee free repair or replacement during a certain time period. In a limited warranty, the warrantor limits the scope of a full warranty. These warranties must be conspicuously displayed (a warranty that covers the costs of parts but not the labor to fix a defective product).

Warranties of Title and Possession (Warranty of Good Title)

Unless otherwise disclaimed, all sellers warrant that they hold valid title to the goods.

Warranties of Title and Possession ( Warranty Against Infringements)

Unless otherwise stated, the seller or lessor who is a merchant dealing in the type of goods being sold or leased warrants that said goods are free from any third-party patent, trademark, or copyright claim.

Conspicuous (noticeable to a reasonable person) Display of Disclaimer

Written disclaimers must be clearly noticeable by a reasonable person. A heading printed in uppercase letters or a typeface that is larger or in a different style.