Consumer Rights

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An express warrant may be created in three ways (arise from sellers):

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1. By affirmation of fact or promise;
2. By description; or
3. By model or sample

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Affirmation of Fact or Promise

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An express warranty is created by the seller whenever (1) the seller makes an "affirmation of fact" or a "promise" relating to such goods to the buyer (must be made by the seller) AND
(2) such statement becomes part of the basis of the bargain (in Texas, there is a need for reliance).

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Description

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Any description can become a warranty. If buyer asks for something with a description, becomes a basis for the bargain. 2. Express warranties by description need not be made by words. Thus, warranties by description may arise from advertising brochures, quotation forms, labels, and order forms.
3. Although warranties made by affirmation of fact or promise must be made by the seller to the buyer, warranties created by description arise whenever there is a description that forms the basis of the bargain. Thus, an order form submitted by the buyer describing the goods would form a warranty by description.

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Model or Sample

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The use of a sample or model gives rise to a warranty that the goods will conform to the sample or model. The only requirement is that they form part of the basis of the bargain. A. Importance of Express Warranties – Cannot be disclaimed
B. Cannot disclaim express warranties – can preclude the introduction of any evidence about the warranty per the Parole Evidence Rule – UCC §2.202 (if written contract, will not be able to use oral express warranties)

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2. Implied Warranties

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A. In the absence of an agreement to the contrary, the law imposes upon the seller the duty to provide goods that meet certain minimal quality standards.
i. UCC §2.316 – can disclaim implied warranties by expressly mentioning the warranty or selling “as is” (very easy to disclaim)
ii. Note: Implied warranties ARISE AS A MATTER OF LAW.

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Implied Warranty of Merchantability (UCC §2.313)

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Implied Warranty of Merchantability (UCC §2.313) 1. An implied warranty of merchantability arises ONLY when three requirements are
satisfied:
a. The warranty has not been excluded or modified;
b. There is a contract for the sale of goods; and
c. The seller is a merchant.


2. The implied warranty does NOT apply IF the seller is not a merchant who deals in the specific goods involved. The rationale is that an experienced seller familiar with the goods in question should be held to a high standard because of their familiarity with the goods in question.

3. Although the UCC creates six factors to consider in assessing merchantability, they really address whether the goods are fit for the ordinary purposes for which they are used.
a). To meet the standard, goods must be:
i) Reasonably safe when delivered to the buyer; and
ii) Reasonably capable of performing in accordance with reasonable expectations.

1. Price can affect reasonable expectations.

2. If the Price for a car is high but the car is used then then seller is warranting the car to be more than just operable, but if the price is what a person would usually expect to pay for such a used car then he is warranting the car is operable.

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Implied Warranty of Fitness for a Particular Purpose (must have special purpose)

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.An implied warranty of fitness for a particular purpose arises ONLY when

a. The warranty has not been excluded or modified (use words like “as is”—get rid of all implied warranties);

b. The seller has reason to know of a particular purpose for which the goods are required (actual or constructive knowledge) and that the buyer is relying on the seller's judgment; and

c. The buyer in fact relies.

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Consumer Status rule

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a. Definition of consumer: A person seeking to qualify as a consumer must satisfy two requirements: (1) the person must have sought or acquired goods or services by purchase or lease; and (2) the goods or services purchased or leased must form the basis of the complaint. A person need not seek or acquire goods or services furnished by the D to sue under the DTPA. There is no privity requirement. A consumer must, to prevail under the DTPA, also establish that each D violated a specific provision of the Act, and that the violation was a producing cause of the claimant's injury. However, it does not appear that the DTPA was intended to reach upstream manufacturers and suppliers when their misrepresentations are not communicated to the consumer. A D's deceptive conduct must occur "in connection with" a consumer transaction. The seller can pursue upstream manufacturers by contribution and indemnity.

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Misrepresentation

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1. False, Misleading, or deceptive act or practice relied on by the consumer to the consumers Detriment.

a. Failure to disclose with the intent to induce and C would not have done transtn if info was disclosed.
1. INTENT=actual awareness of falsity+ Consumer Detrimental Reliance.
b. Goods/servs are of particular standard when they are not
c. Goods/servs have characteristics when they don’t.
d. Passing off G/S

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Unconscionability rule

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a. Definition: "Unconscionable action or course of action" means "an act or practice which, to a consumer's detriment, takes advantage of the lack of knowledge, ability, experience, or capacity of the consumer to a grossly unfair degree."
1. Grossly Unfair: Taking advantage of a consumer's lack of knowledge to a grossly unfair degree thus requires a showing that the resulting unfairness was glaringly noticeable, flagrant, complete and unmitigated

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Breach Of Express Warranty Created in 3 ways?

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1. Affirmation of fact or promise
1. An express warranty is created by the seller whenever
A. (1) the seller makes an "affirmation of fact" or a "promise" relating to such goods to the buyer (must be made by the seller) AND
B. (2) such statement becomes part of the basis of the bargain (in Texas, there is a need for reliance).
2. Any description can become a warranty. If buyer asks for something with a description, becomes a basis for the bargain.
3. The use of a sample or model gives rise to a warranty that the goods will conform to the sample or model. The only requirement is that they form part of the basis of the bargain. Cannot Be Disclaimed**

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Warranty: Constructed in workman like manner with the sale of a new Home

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1. Warranty: Constructed in workman like manner with the sale of a new Home

1. A builder of a new home impliedly warrants that the residence is constructed in a good and workmanlike manner and is suitable for human habitation.
2. The implied warranty of good and workmanlike construction may be disclaimed by the parties when their agreement provides for the manner, performance or quality of the desired construction. Centex

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Warranty: Sale of a home that the home will be habitable. (habitability)

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2. Warranty: Sale of a home that the home will be habitable. (habitability)
1. The court does not lay out any specific elements for these warranties. Caveat Emptor is outdated as applied to new houses. A builder of a new home impliedly warrants that the residence is constructed in a good and workmanlike manner and is suitable for human habitation. The court replaced caveat emptor with these two warranties. Humer v. Morton The implied warranty of habitability only extends to defects that render the property so defective that is unsuitable for its intended use as a home. Further, the implied warranty of habitability extends only to latent defects. It does not include defects, even substantial one, that are known by or expressly disclosed by the buyer.
2. The warranty of habitability cannot be disclaimed generally. The implied warranty of habitability can be waived only to the extent that defects are adequately disclosed. Centex Homes v. Buecher

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Warranty: Implied warranty of suitability for a commercial lease

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3. Warranty: Implied warranty of suitability for a commercial lease
1. There is an implied warranty by a commercial landlord that the leased premises are suitable for their intended commercial purpose. This warranty means that at the inception of the lease there are no latent defects in the facilities that are vital to the use of the premises for their intended commercial purpose and that these essential facilities will remain in a suitable condition. If, however, the parties to a lease expressly agree that the tenant will repair certain defects, then the provisions of the lease will control. Further, the tenant's obligation to pay rent and the landlord's implied warranty of suitability are therefore mutually dependent. Among the factors to be considered when determining whether there has been a breach of this warranty are the following: (1) the nature of the defect (2) its effect on the tenant's use of the premises (3) the length of time the defect persisted (4) the age of the structure (5) the amount of the rent (6) the area in which the premises are located (7) whether the tenant waived the defects and (8) whether the defect resulted from any unusual or abnormal use by the tenant. Davidow v. Inwood North Professional Group-Phase 1

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Warranty: implied warranty to repair or modify existing tangible goods or property in a good and workmanlike manner

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4. Warranty: implied warranty to repair or modify existing tangible goods or property in a good and workmanlike manner .
1. An implied warranty to repair or modify existing tangible goods or property in a good and workmanlike manner is available to consumers suing under the DTPA. Good and workmanlike is that quality of work performed by one who has the knowledge, training, or experience necessary for the successful practice of a trade or occupation and performed in a manner generally considered proficient by those capable of judging such work. This warranty does not required repairmen to guarantee the results of their work. It only requires those who repair or modify existing tangible goods or property to perform those services in a good and workmanlike manner.
2. Further, the implied warranty that repair or modification services of existing tangible goods or property will be performed in a good and workmanlike manner may not be waived or disclaimed.