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37 Cards in this Set
- Front
- Back
warranty
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an obligation of the seller to the buyer (or lessor to lessee) concerning title, quality, characteristics, or condition of goods
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warranty of title
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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)
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express warranty
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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
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implied warranty
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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
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merchantability
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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
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fitness for a particular purpose
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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
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disclaimer of warranties
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a negation of a warranty, to be effective it must be positive, explicit, unequivocal, and conspicuous
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disclaimer of express warranties
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express warranties in general cannot be disclaimed
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disclaimer of warranty of title
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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
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disclaimer of merchantability
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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)
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disclaimer of implied warranty of fitness for a particular purpose
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must be in writing and conspicuous
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other implied warranty disclaimers
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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
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federal legislation related to consumer warranties
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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
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limitation or modification of warranties
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Code allows a seller to limit or modify the buyer's remedies for breach, unless they are unconscionable
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privity of contract
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a contractual relationship between parties that was necessary at common law to maintain a lawsuit
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horizontal privity
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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
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Code's 3 alternatives to horizontal privity
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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
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vertical privity
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doctrine determining who in the chain of distribution is liable for breach of warranty (most states have eliminated this requirement for warranty actions)
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notice of breach of warranty
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if the buyer fails to notify the seller of any breach within a reasonable time, she is barred from any remedy against the seller
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plaintiff's conduct
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contributory negligence is not a defense in warranty action, voluntary assumption of the risk is a valid defense
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strict liability in tort
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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
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requirements for strict liability in tort (6)
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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
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manufacturing defect
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by failing to meet its own manufacturing specifications, the product is not properly made
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design defect
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the product, though made as designed, is dangerous because the design is inadequate
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failure to warn
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failure to provide adequate warning of possible danger or to provide appropriate directions for use of a product
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unreasonably dangerous product
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contains a danger beyond that which would be contemplated by the ordinary consumer (merchant not liable)
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contractual defenses for strict product liability
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defenses like privity, disclaimers, and notice generally do not apply to tort liablity
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contributory negligence
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not a defense for tort liability in most states
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comparative negligence
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most sates have applied this rule for strict liability in tort (mostly modified)
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voluntary assumption of risk/misuse or abuse of product
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both valid defenses in strict tort liability
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subsequent alteration
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liability exists only if the product reaches the user or consumer without substantial change in the condition in which it was sold
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statute of repose
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limits the time period for which a manufacturer is liable for injury caused by its product (typically 6-12 years)
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limitations on damages
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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
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Third Restatement on products liability
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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
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manufacturing defect (Restatement)
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seller is held to strict liability when the product departs from its intended design
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design defect (Restatement)
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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
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failure to warn (Restatement)
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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
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