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37 Cards in this Set

  • Front
  • Back
warranty
an obligation of the seller to the buyer (or lessor to lessee) concerning title, quality, characteristics, or condition of goods
warranty of title
the obligation of a seller to convey the right of ownership without any other claims on the property by another (in a lease the warranty protects the lessee's right to possess and use the goods)
express warranty
an affirmation of fact or promise about the goods or a description, including a sample of the goods, which becomes a part of the basis of the bargain
implied warranty
a contractual obligation, arising out of certain circumstances of the sale or lease, imposed by operation of law and not found in the language of the sales or lease contract
merchantability
warranty by a merchant seller that the goods are reasonably fit for a particular purpose for which they are manufactured or sold; pass without objection in the trade under the contract description; and are of fair, average quality
fitness for a particular purpose
warranty by any seller that goods are reasonably fit for a particular purpose if, at the time of contracting, the seller had reason to know the buyer's particular purpose and that the buyer was relying on the seller's skill and judgment to furnish suitable goods
disclaimer of warranties
a negation of a warranty, to be effective it must be positive, explicit, unequivocal, and conspicuous
disclaimer of express warranties
express warranties in general cannot be disclaimed
disclaimer of warranty of title
may be excluded or modified by specific language or by certain circumstances, including judicial sale or a sale by a sheriff, executor, or foreclosing lienor
disclaimer of merchantability
the disclaimer must mention 'merchantability' and, in the case of a writing, must be conspicuous (in a lease the disclaimer must be in writing and conspicuous)
disclaimer of implied warranty of fitness for a particular purpose
must be in writing and conspicuous
other implied warranty disclaimers
can also be disclaimed by expressions like "as is" "with all faults", or by course of dealing, course of performance, or usage of trade, or as to defects an examination ought to have revealed where the buyer examined (or refused to examine) the goods
federal legislation related to consumer warranties
Magnuson-Moss warranty act protects purchasers of consumer goods by providing tha twarranty information be clear and useful and that a seller who makes a written warranty cannot disclaim any implied warranty
limitation or modification of warranties
Code allows a seller to limit or modify the buyer's remedies for breach, unless they are unconscionable
privity of contract
a contractual relationship between parties that was necessary at common law to maintain a lawsuit
horizontal privity
doctrine determining who benefits from a warranty and who therefore may bring a cause of action; includes users, consumers, and bystanders that are not the contracting purchaser
Code's 3 alternatives to horizontal privity
A: seller's warranty extends to any natural person who is in family or household of buyer, or a guest. B: any natural person reasonably expected to use goods. C: expands coverage to any person and property damage
vertical privity
doctrine determining who in the chain of distribution is liable for breach of warranty (most states have eliminated this requirement for warranty actions)
notice of breach of warranty
if the buyer fails to notify the seller of any breach within a reasonable time, she is barred from any remedy against the seller
plaintiff's conduct
contributory negligence is not a defense in warranty action, voluntary assumption of the risk is a valid defense
strict liability in tort
tort liability is imposed on merchant sellers for both personal injuries and property damage for selling a product in a defective condition unreasonably dangerous to the user or consumer
requirements for strict liability in tort (6)
defendant engaged in business of selling the product, product sold in defective condition, defect made product unreasonably dangerous, defect existed when it left defendant's hands, physical harm or property damage sustained, and defect proximately caused injury or damage
manufacturing defect
by failing to meet its own manufacturing specifications, the product is not properly made
design defect
the product, though made as designed, is dangerous because the design is inadequate
failure to warn
failure to provide adequate warning of possible danger or to provide appropriate directions for use of a product
unreasonably dangerous product
contains a danger beyond that which would be contemplated by the ordinary consumer (merchant not liable)
contractual defenses for strict product liability
defenses like privity, disclaimers, and notice generally do not apply to tort liablity
contributory negligence
not a defense for tort liability in most states
comparative negligence
most sates have applied this rule for strict liability in tort (mostly modified)
voluntary assumption of risk/misuse or abuse of product
both valid defenses in strict tort liability
subsequent alteration
liability exists only if the product reaches the user or consumer without substantial change in the condition in which it was sold
statute of repose
limits the time period for which a manufacturer is liable for injury caused by its product (typically 6-12 years)
limitations on damages
most states have reduced punitive damages available, many have awarded the state a percentage of the punitive damages and have specified an acceptable ratio between compensatory and punitive
Third Restatement on products liability
one engaged in the business of selling products who sells a defective product is subject to liability for harm to persons or property caused by the defect
manufacturing defect (Restatement)
seller is held to strict liability when the product departs from its intended design
design defect (Restatement)
a product is defective when the foreseeable risks of harm posed by the product could have been reduced or avoided by the adoption of a reasonable alternative design
failure to warn (Restatement)
a product is defected because of inadequate instructions or warnings when the foreseeable risks of harm posed by the product could have been reduced or avoided by the provision of reasonable instructions or warnings