Chapter 22 (Warranties & Product Liability)

Front 1

When does product liability arrise?

Back 1

when goods have caused an injury

Front 2

What are the three types of legal ideas related to liability cases?

Back 2

(i) warranty - a contractual assurance that goods will meet certain standards
(ii) negligence - manufacturing the product without using the standard of care that a reasonable manufacturer would use
(iii) strict liability - the manufacturer of the product is liable regardless of its behavior

Front 3

express warranties

Back 3

a warranty that the seller creates by his words or action (seller could be either or both of the manufacturer or retailer)

Front 4

three ways seller can create an express warranty

Back 4

(i) affirmation of fact or purpose (specific and can be proven true or false - no sales "puffery")
(ii) description of the goods (oral or written, can appear anywhere like on tag)
(iii) with a sample or model (product will perform as well as model/sample)

Front 5

What must the buyer demonstrate was part of the bargain to create an express warranty?

Back 5

the seller's conduct (said or did)

Front 6

What creates implied warranties?

Back 6

the Uniform Commercial Code itself rather than any act or statement of the seller

Front 7

implied warranty of merchantability

Back 7

merchants are implied to warrant that the goods are fit for the ordinary purposes for which they are used unless excluded or modified

Front 8

implied warranty of fitness for a particular purpose

Back 8

if the seller knows about a particular purpose for which the buyer wants the goods and knows that the buyer is relying on the seller's skills or judgment, the seller is implied to warrant that the goods are fit for that purpose

Front 9

implied warranty of title

Back 9

seller warrants that it has valid title to the goods and that they are free of any security interest

Front 10

implied warranty against infringement

Back 10

merchants warrant that the goods do not infringe on anyone's copyright, patent, or trademark

Front 11

disclaimer

Back 11

a statement that a particular warranty does not apply (sellers can disclaim most warranties)

Front 12

oral express warranties - disclaim?

Back 12

can be disclaimed

Front 13

written express warranties - disclaim?

Back 13

almost impossible to disclaim (no contradictory positions in a document, no unfair surprises from contradictory positions in other docs)

Front 14

implied warranties - disclaim?

Back 14

can be disclaimed

Front 15

What must disclaimer of implied warranty of merchantability include?

Back 15

must prominently provide word "merchantability" in disclaimer

Front 16

limitation of remedies

Back 16

clause by which parties may limit or exclude the normal remedies permitted to buyer for breach of warranty under the UCC

Front 17

consequential damages

Back 17

losses stemming from the particular requirements of the buyer

Front 18

When is an exclusion of consequential damages void?

Back 18

if unconscionable - a remedy restriction is shockingly one-sided and fundamentally unfair (seldom found unless buyer a consumer)

Front 19

What is it called when two parties contract (directly)?

Back 19

they are "in privity"

Front 20

Traditionally, from who could a buyer recover for breach of contract?

Back 20

only from a seller with which the buyer was in privity

Front 21

Now, when do state courts not require privity for recovery from breach of warranty?

Back 21

if personal injury is involved or it the end user is a consumer (more likely if end user a corporation)

Front 22

What does buyer's misuse usually preclude?

Back 22

a claim of breach of warranty

Front 23

4-year statute of limitations

Back 23

buyer must bring any lawsuit for breach of warranty no later than four years after the goods were delivered

Front 24

The UCC also requires the buyer do what in a reasonable amount of time in regard to breach of warranty?

Back 24

notify the seller of any claimed defects

Front 25

negligent design

Back 25

product was not designed free of unreasonable risks

Front 26

negligent manufacture

Back 26

design ok but failure to inspect or other careless conduct caused a faulty product to leave plant and be sold

Front 27

failure to warn

Back 27

applies to dangers of normal use and foreseeable misuse

Front 28

strict liability

Back 28

injured party does not have to prove that defendant's conduct was unreasonable, only that it made or sold a product that was defective and the defect caused harm (defective condition must be unreasonably dangerous to user)

Front 29

What is the only real defense against strict liability?

Back 29

the defendant exercised "all possible care" (much tougher than ordinary negligence, which requires only reasonable care)