JD BUSINESS LAW: CHAPTER 23 WARRANTIES:

what are the rules used to interpret which of two conflicting warranties is dominant

1. express warranties displace inconsistent implied warranties, except implied warranties of fitness for a particular purpose 2. samples take precedence over inconsistent general descriptions 3. exact or technical specifications displace inconsistent samples or general descriptions.

what is the rule of the Magnuson-Moss Act

1. no seller is required to give a written warranty for consumer goods sold. If a seller chooses to make an express written warranty, however, and the cost of the consumer goods is more than $25, the warranty must be labeled as either full or limited 2. The act further requires warrantor to make certain disclosures fully and conspicuously in a single document in readily understood language

what does it mean to be "merchantable goods"

1. that they must be "reasonably fit for the ordinary purpose for which such goods are used. they must be of at least average, fair or medium grade quality; 2. the quality must be comparable to quality that will pass w/o objection in the trade or market for goods of the same description. 3. the goods must also be adequately packaged and labeled and must conform to the promises or affirmations of fact made on the container or label

how is the infringement warrant applied in leases

Art. 2A provides for the same notice of infringement litigation. After being notified of the lawsuit the lessor who agrees to pay all expenses can demand the lessee turn over control of litigation and failure to provide notice normally bars subsequent recovery against the lessor for liability established by the litigation

What statements create express warranties under the UCC

Express warrainties aries when seller or lessor indicates any of the following: 1. that the goods conform to any AFFIRMATION(declaration that something is true) OF FACT OR PROMISE that the seller or lessor makes to the buyer or lessee about the goods. Such affirmations are usually promises made during bargaining process 2. that the goods conform to any description of them (wool coat) 3. that the goods conform to any sample or model of the goods shown to buyer/lessee

does the warranty of merchantability apply to food

yes- merchantable food is food that is fit to eat.

How can a seller/lessor disclaim oral express warranties

by including in the contract a written disclaimer in language that is clear and conspicuous and called to a buyers attention and making the buyer/lessee aware of any warranty disclaimers or modifications at the time the contract is formed= seller/lessor cannot modify any warranties or disclaimers made during the bargaining process w/o the consent of the buyer/lessee

How does a seller/lessor create an express warranty

by making representations concerning the quality, condition, description or performance potential of goods.

what is a full warranty

it requires free repair or replacement of any defective part and if the product cannot be repaired w/i a reasonable time, the consumer has the choice of a refund or a replacement w/o charge. It can be for an unlimited or limited period

how are implied warranties disclaimed

generally, unless circumstances dictate otherwise, implied warranties of merchantability and fitness are disclaimed by an expression such as "as is" or "with all faults" such that both parties clearly understand from the language used that there are no implied warranties. (some states have laws that forbid "as is" sales.

Under the UCC what 3 types of title warranties can automatically arise in sales and lease contracts

good title, no liens and no infringements

how is the no lien warranty actionable

if a creditor legally repossesses the goods from a buyer who had NO ACTUAL KNOWLEDGE of the security interest, the buyer can recover from the seller for breach of warranty.

what is the impact on warranties if a buyer conducts an examination or refuses to inspect the goods

if buyer/lessee refuses to examine goods or examines the goods as fully as desired, there is no implied warranty with respect to defects that a reasonable examination would reveal or defects that are found on examination.

when is there a breach of the warranty of infringement

if the buyer is sued by a third party holding copyright, trademark or patent rights in the goods then the warranty is breached

where can express warranties be found

in advertisements, brochures, promotional materials, or can be made orally or in express warranty provision in contract

what is the limitation to the Magnuson-Moss Warranty Act

it applies to consumer transactions not to commercial transactions (which are covered by UCC)

what does it mean to be "basis of the bargain"

it means that they buyer or lessee must have relied on the representation at the time of entering into the contract

what protection does the warranty of no lien provide

it protects buyers who, for instance, unknwoningly buy goods that are subject to a creditor's secutiry interst

what is the warranty of no liens

it protects buyers/lessees who are unaware of any encumbrances (claims, charges or liabilities-usually called liens) against goods at the time the contract is made.

what are lemon laws

laws creating remedies for purchasers of defective automobiles, called lemons which are in addition to remedies in UCC (example of implied warranty from trade custom) but note that generally seller or manufacture is given a number of opportunities to cure the defect and most require arbitration rather than lawsuit

what is required to be included in the disclosure

name and address of warrantor, what is warranted, procedures for enforcing warranty and clarify the buyer has legal rights and explain limitations on warranty relief.

does a buyer with actual notice of a security interest have a claim for breach of lien warranty

no

Do UCC sections on disclaimers identify unconscionability as a factor

no but the courts will test warranty disclaimers with reference to unconscionability standards

what words are required to constitute an express warranty

no formal words- it is only necessary that a reasonable buyer or lessee would regard the representation as being part of the basis of the bargain

does a seller have to have actual knowledge of the buyers/lessees particular purpose

no it is sufficient if seller/lessor has reason to know the purpose- however for an implied warranty to be created the buyer/lessee must have relied on the skill or judgment of the seller or lessor in selecting or furnishing suitable goods and the seller/lessor must have reason to know that the buyer or lessee is relying o her judgment or skill

can statements of opinion and value create express warranties

no only statements of fact, UNLESS the seller or lessor is an expert ad gives an opinion as an expert to a layperson, then a warranty may be created

What is an implied warranty

one that the law derives by inference from the nature of the transaction or the relative situations or circumstances of the parties

what is a limited warranty

one where the buyer's recourse is limited in some fashion, such as to replacement of an item. - it must be conspicuously stated to be effective.

how can a seller disclaim or modify title warranties

only by specific language in the contract

what is a warranty of good title

sellers warrant that they have good and valid title to the goods sold and that the transfer of title is rightful.

what is a buyers remedy if the buyer subsequently learns the seller did not have good title

the buyer can sue the seller for breach of warranty

what happens if the buyer fails to give the seller notice of breach w/i a reasonable time

the buyer is barred from any remedy against the seller for liability established by the litigation (if buyer wins but did not notify the seller, then the buyer cannot sue the seller for litigation costs)

what are the buyers obligations in the event of breach of warranty of infringement

the buyer must noticy the seller w/i a reasonable time to enable the seller time to decide whether to defend the lawsuit and bear the expenses of the action.

what is required to disclaim the implied warranty of fitness

the disclaimer must be in writing (or record) and must be conspicuous

what is the implied warranty of fitness for a particular purpose

the implied warranty of fitness for a particular purpose arises in the sale/lease of goods when a seller/lessor (merchant or nonmerchant) knows both of the following: 1. the particular purpose for which a buyer or lessee will use the goods 2. that the buyer or lessee is relying on the skill and judgment of the seller or lessor to select suitable goods

Since it is not always easy to tell if a statement is a warranty or puffery, what is the controlling point in most cases

the reasonableness of the buyer/lessees reliance appears to be the controlling criteria, though the context of the statement may be relevant (written more reasonable to rely on than oral)

is there a similar warranty for leases

yes- Art. 2A provides that during the term of the lease, no claim of any third party will interfere with the lessee's enjoyment of the leasehold interest.

does a particular purpose of the buyer/lessee differ from the ordinary purpose for which goods are used

yes- goods can be merchantable but unfit for a particular purpose

what is the exception to the infringement warranty for leases

there is an exception for leases to individual consumers for personal, family or household purposes. A consumer who fails to notify the lessor w/i a reasonable time does not lose his or her remedy against lessor for whatever liability is established in the litigation

Under the UCC what is the implied warranty that exists for merchants

they impliedly warrant that the goods they sell or lease are merchantable and, in certain circumstances, are fit for a particular purpose; though in addition implied warranties may arise from a course of delaing or usage of trade.

what is specifically required to disclaimer of the implied warranty of merchantability

to specifically disclaim an implied warranty of merchantability, a seller/lessor must mention "merchantability", and while disclaimer need not be written, if it is written, it must be conspicuous

If the seller agrees in writing (or record) to defend a lawsuit and to pay the expenses what must the buyer do

turn over control of the litigation to the seller.

what is the statute of limiations on breach of warranty

w/i 4 years after breach accrues

what is the Magnuson-Moss Warranty Act

was designed to prevent deception in warranties by making them easier to understand.

Under the UCC, when is a term conspicuous

when it is written or displayed in such a way that a reasonable person would notice it= capital letters, larger font, different color

what type of contract automatically creates a no infringement warranty

when the seller or lessor is a merchant because they warrant that the buyer or lessee takes the goods free of infringement from any copyright, trademark or patent claim of third persons

when does breach of warranty claim accrue

when the seller or lessor tenders delivery even if the buyer or lessee is unaware of the breach at that time. + normally the nonbreaching party must notify the breaching party w/i reasonable time after discovering the breach or be barred from pursuing any remedy

when will a warrant be implied from prior dealings or trade custom

without 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 custom to apply to their contract

can the warranty of merchantability be breached even though the merchant did not know or could not have discovered that a product was defective.

yes

Can two overlapping warranties be enforced

yes- they are cumulative if consistent. However, if it is unreasonable for two warranties to be consistent then the court looks to parties intention to see which is dominant