Ba-18: Chapter 15

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Warranty

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Defined as a promise that a proposition of fact is true. Since a warranty involves a promise it becomes a part of the contract. This is especially important in the sale of goods. Warranty protection is often the best protection and a buyer can have in the sale. There are two types of warranties and sales; Express and implied

They're also statutory warranty Provisions, but these tend to be more informational rather than coverage based. These types of warranties are not mutually exclusive. Frequently they will be present in a contract together

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Common law

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The courts and common law presume that the parties the contract have equal bargaining power. The courts also strongly believe in the freedom of contract. Due to the growth in business affecting location bargaining power who actually is selling and Manufacturing the goods the cords and legislators began to seek means of protecting consumers. Implied warranties and statutory warranty provisions and product liability provided those means. The consumer has this now become so protected that many people feel the modern rule of Commerce is caveat venditor- let the seller beware

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Caveat Emptor

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Let the buyer beware. Historic rule that was regularly followed. As business grew larger and equivocation business became more likely to be geographically removed from the location of the individual buyer. It became less likely that the parties would truly have equal bargaining power.

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Caveat venditor

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Let the seller beware

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Express warranty

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Can only be given by the seller. Is not present until such time as a seller gives it. However once given such a warranty is said by the UCC to be a part of the basis of the bargain.

Three different ways in which the seller creates an Express warranty are:

1. Any affirmation of a fact or a promise that relates to the goods creates an Express warranty that the goods will match the fact or the promise.

2. Any description of the goods creates an Express warranty that the goods will match the description.

3. Any sample or model of the goods creates an Express warranty that the goods will conform to the sample or the model.

It is not necessary for the seller to use words such as warranty or guarantee. Isn't even necessary for the seller to intend to create an Express warranty. All that is necessary is that the seller employs one of these methods in a manner that causes a fire to reason we believe that a warranty covering the goods has been given. The seller creates a belief in the mind of the buyer as to the character, quality, or nature of the goods, the seller is likely to have given an Express warranty.

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Fact

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Obvious statement of the fact qualifiable and measurable. Creates an Express warranty

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Gray area

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Possible statement of fact, possible statement of opinion.

May create an Express warranty depending on other circumstances including the relative knowledge and expertise of the parties

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Opinion

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Obvious statement of opinion not qualifiable or measurable.

No Express warranty is created this is mere puffing or sales talk.

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Advertisements

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Advertisements that claim certain characteristics for a product may also be treated by the courts as a formation of fact and does Express warranty is given.

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Express warranties as viewed under UCC code

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Reliance appears to be presumed. The rule under the code is the seller must disprove the existence of an Express warranty.

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Express warranties focus on

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Facts. Opinions are not taken to be warranties. A certain amount of puffing or sales talk is allowed. There's often a fine line between fact and opinion on the seller should be extremely careful.

Express warranties are a part of the contract. They are not present until given by the seller. The court will not find an Express warranty unless it is created by the seller as part of the basis of the bargain. That's a careful seller will not give many if any Express warranties until and less so desired.

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Code considers the what of the statement or conduct from the buyer's perspective

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The code considers the timing. This means that the seller can create an Express warranty for the contract is formed through sales talk, negotiations, or even commercials. Wall forming the contract in the language used in the agreement of the oral commitments made while forming the writing or even after the contract is formed through continued reassurances to the buyer that he or she is made a good deal. Seller should remember two things:

1. If they know in fact, they should say that honestly.

2. If they do not know a fact, they should not speculate. Is too easy to give an Express warranty without realizing it.

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Implied warranty

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Imposed by operation of law, subject to certain limitations involving the status of the seller. These warranties will automatically be present in the contract unless they are voluntary surrendered by the buyer, generally because of warranties were included by the seller.

The UCC recognizes four types of implied warranties. The warranty of title, the warranty against infringement, the warranty of merchantability, And the warranty of Fitness for a particular purpose. Some all or none of these warranties may be present in any given sales contract, depending on the circumstances surrounding the transaction and on the status of the seller of the goods.

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Warranty of title

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A warranty of title insurance the buyer of the following

1. The transfer of the Good by the seller is proper.

2. The buyer is receiving good title.

3. The goods are free of hidden security interest, encumbrances, or leans.

In other words the buyer is a sure that no one may assert a hidden lien or claim to the goods that is superior to the claim of the buyer.

That's the UCC specifies that every seller of goods gives an implied warranty of title unless the contract contains specific language that the warranty is being excluded or their circumstances of the cell are such that the buyer should realize that the seller does not warranty title.

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Warranty against infringement

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Implied warranty against infringement is unique and that it can be given by either the buyer or the seller, although it is normally given by the seller. None of the other implied warranties can be given by the buyer. The infringement protected against is the rightful claim of any third person concerning the goods

Patent infringement is most common type of problem dealt with under this warranty, but another area that is becoming increasingly important is copyright infringement.

In order for a seller to give this warranty the seller must be a merchant who regular deals in this type of goods involved. A buyer who gives the warranty against infringement need not be a merchant. Any buyer who furnishes specifications to the seller in order to have the seller special we manufacture the good described warrants against infringement if the seller complies with the specifications.

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Warranty of merchantability

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Most commonly reached, and the most commonly asserted, implied warranty is a warranty of merchantability. Warranty of merchantability is given whatever in merchant of goods, including a merchant of food and drink, makes a sale. It is designed to assure buyers of the goods they purchase when the merchant will be suitable for normal and intended use of goods of that kind. Failure to satisfy any of the following six criteria means that the goods are not merchantable and at the warranty has been breached.

1. The goods must be able to pass without objection in the trade, under the description in the contract.

2. If the goods are fungible, they must be a fair average quality within

3. The goods must be suitable for their ordinary purpose and use.

4. The Gods Must Be of even kind, quality, and quantity.

5. The goods must be adequately contained, packaged, and labeled as required under the agreement.

6. The goods must conform to the promises and facts contained on the label if any.

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Reasonable expectations test

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Under the reasonable expectations test the court attempts to establish what a reasonable person expect to find in the food. Reasonable person does not expect to find a foreign object in the food so any foreign object found constitutes a breach. However a reasonable person may not expect to find a natural object in their food either, so finding such a natural object can also constitute a breach. Reasonable expectations test replaced the foreign natural test.

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Foreign natural test

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Foreign objects would constitute a breach as for natural objects would not constitute a breach. An example would be the fish bone in the clam chowder. The fish is natural to the chowder and thus no breach. A dead rat is foreign and would constitute a breach

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Warranty of Fitness for a particular purpose

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Remember that the warranty of merchantability refers to Fitness for a normally intended or expected purpose. In order for this warranty to come into existence all of the following conditions must be present.

1. The seller must know that the buyer is contemplating a particular use for the goods.

2. The seller must know that the buyer is relying on the seller skill, judgment, or knowledge in selecting the proper good for the purpose.

3. The buyer must not restrict the seller's range of choices to particular brand or price range or otherwise limit the scope of the sellers expert judgment.

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Warranty exclusions

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Seller can modify or exclude warnings. Simplest way to exclude an Express warranty is not to give one. To exclude her more modify a warranty of merchantability, either orally or in writing, the word merchantability must be used. Is possible to exclude all implied warranties of quality which normally do not exclude title or infringement protection under three sets of circumstances:

1. Language such as as is or with faults must be used properly so the buyer is duly informed that no implied warranties of quality are given

2. If the buyer has thoroughly examine the goods or has refused to examine them before the sale, no implied warranty of quality is given for defects that the examination should have revealed.

3.

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Implied warranties

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Statutory warranty provisions Magnuson Moss Warranty Act

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Law covers any consumer good manufactured after January 1975. Manufacturer must provide the customer with presale warranty information. Manufacturer also should set up informal settlement procedures to benefit the customer. The manufacturer does not have to give any Express warranty under the statue. However according to the law of the manufacturer who does give an Express warranty must designate if it as either full or Limited.

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Full warranty we'll meet these four requirements

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1. It must warrant that defects in the good will be remedied within a reasonable time.

2. It must conspicuously display any exclusions or limitations of consequential damages.

3. Any implied warranty must not be limited in time.

4. It must warranty that if the sellers attempts to remedy defects in the goods fail the customer will be allowed to select either a refund or replacement.

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Product liability

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Because they're part of contract warranty protections are obvious to the buyer and the seller. Less obvious the buyer and seller and too many sellers are the other source of remedies to which the buyer may be entitled. Sellers in particular I need to beware of potential liability they face for injuries caused by Goods they sell beyond the liabilities imposed under warranty law. Injuries while using a product the customer decides to seek remedies for the injury suffered. The first alternate many people consider is a breach of warranty claim. An injured party may be able to ascertain negligence against the manufacturer or may even be able to establish strict tort liability against a manufacturer or seller of the good.

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Negligence

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Injured party trying to establish that the tort of negligence has occurred to show the requisite elements of negligence which are Duty, breach of Duty, harm, and proximate cause. The injured party then has to show that he or she was injured while using the goods that the injury was proximately caused by the sellers breach of Duty.

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Imminent danger and inherent Danger

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Eminent or inherent Danger a product is seem to be eminently dangerous if it is reasonably certain to threaten death or severe bodily harm as produced and or sold. And item is considered to be inherently dangerous if it is dangerous by its nature imminent danger is most commonly found in negligent production, inherent danger is most commonly found in negligent use

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Strict liability in tort

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Frequently referred to as strict liability or strict tort liability. Appears to be a public policy area. Is possible for the manufacture to disclaim warranty Provisions leaving a purchase or without the protection and vision to buy warranty law. Severally and injured consumer may not be able to establish a necessary element for a successful negligence suit. The basis for this theory of recovery is found in restatement of torts the section States

1. One who sells any product in a defective condition unreasonably dangerous to the use or consumer or to his property is subject to liability for physical harm their by cause an ultimate user or customer or to his property if a the seller is engaging a business of selling such a product and be it is expected to and does reach the user or customer without substantial change and the condition in which it is

2. The rules stated in subjection one applies although a the seller has exercised all possible care in the preparation and sell of his product and be the user or consumer has not bought the product from or entered into any contractual relationship with the seller

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Disclosure law

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Designed to ensure that customers are made aware of the warranty protections available with different products so that the consumer can make an informed and intellectual choice between products based on all available information including warranty

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Planned obsolescence

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A product is useful life is supposed to end before too many technological advances can be made is less likely to lead to liability to the manufacturer which is known as an argument for planned obsolescence of products

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Leases

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What goods are lease the lessee receive certain warranties and these warranties are either the same as or at least Anna logus to the warranties given to the buyer and the sale of goods. There are some differences in a few of the warranties for these differences are due to the difference in the reason the contract is entered. Police receives Express warranties on the same basis as the buyer of goods does. Lisey's also receive for implemented warranties and their lease contracts. He's implied warranties are the warranty against interference, the warranty against infringement, the warranty of merchantability, in the warranty of Fitness for a particular purpose

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CISG

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The cisg does not expressly provide for warranties as the UCC does. It does not make any provisions for liability. It appears that International sales of goods treat the issue of product liability or negligence under the apical National laws of the Forum cord. The UCC does not provide for product liability or negligence either. These areas are both areas of state law developed through the common law tradition and applied by The Forum Court when appropriate

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ISO 9000

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International standards organization

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Summary

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Warranty law and product liability are major areas of consumer protection. They are also areas of potential liability for businesses.

There are two broad types of warranties Under the UCC, Express warranties and implied warranties.Express warranties are given by the seller. Any words models or samples that create a belief in the mind of the buyer as to the character, quality or nature of the goods May create an Express warranty.

Statements of opinion do not rise to the level of an Express warranty but statements of fact do create warranties. Statements that fall in the middle ground not quite a fact but more then an opinion may be treated as creating an Express warranty under some circumstances.

Implied warranties are given by operation of Law and our present depending to some extent on the status of the parties unless surrendered by the buyer.

The buyer surrenders the protection of the implied warranty when he or she agrees to a contract in which the seller has excluded one or more of the warranties.

Implied warranties cover title, protection against infringement, assurance that the goods are merchantable if the seller is a merchant, and cover fitness for a particular purpose under some circumstances.

Warranties generally extend two parties other than the buyer, if those others are foreseeable users or consumers of the goods covered by the warranty.

The magnuson-moss consumer product Warranty Act is a disclosure statute. It requires Merchant sellers who are selling to Consumers to disclose the warranty coverage on the product prior to the cell good. It does not provide warranty protection but does provide pre-sell warranty information.

Product liability goes beyond warranty protection. It provides a person injured by a product with the possibility of recovering due to negligence or strict product liability.

Lisa's have cellular coverage in both the warranty and the product liability areas. The cisg does not address warranties directly but it does allow for course of dealings to provide warranty coverage. It also treat some performance issues and matter that provides the same protection as warranties.

The ISO 9000 is a certification program that deals with quality control. Well it does not deal directly with the quality of the product it does address of process and the quality control utilized in production.