Sales and Lease Warranties Express warranty Implied warranty of merchantability Implied warranty of fitness for a particular purpose Warranty of Title
Express Warranties Oral or in writing don’t have to use the words “warrant” or “guarantee” any affirmation or promise any description any sample or model
What do you have with you right now with a warranty?
Express Warranties: Basis of The Bargain Buyer must rely on warranty when he enters into contract Statements of Opinion and Value usually just “puffing” - not an express warranty not puffing if given as opinion by an “expert”
Implied Warranties Merchantability Fitness for a Particular Purpose Arising out of Course of Dealing or Trade Usage
Implied Warranty of Merchantability Made only by merchants Goods are of average, fair, or medium- grade Adequately packaged and labeled Conform to promises on label Have a consistent quality and quantity among the commercial units
Implied Warranty of Fitness for a Particular Purpose Made by any seller who knows the particular purpose for which the goods are being bought and knows the buyer is relying on seller’s skill and judgment to select suitable goods
Implied Warranty Arising fromCourse of Dealing or Trade Usage Both parties to a contract have knowledge of a well-recognized trade custom = courts infer that both meant this custom to apply to their transaction
Warranty of Title Good Title No Liens No Infringements
How Is Warranty of Title Disclaimed? By Specific Language Warranty doesn’t occur at sheriff’s sales
Overlapping Warranties Two or more warranties made in a single transaction construed as cumulative if consistent if inconsistent? First: implied warrant of fitness for a particular purpose Then: express samples over general descriptions technical over general descriptions
Warranties and Third Parties Common law: Only buyer because she is the one in the contract w/ the seller = buyer is in privity of contract w/ the seller UCC: provides 3 alternatives from which the states may choose UCC 2-318
Language of the UCC UCC § 2-318. Third Party Beneficiaries of Warranties Express or Implied. [Note: If this Act is introduced in the Congress of the United States this section should be omitted. (States to select one alternative.)]
Language of the UCCAlternative A Alternative B Alternative C A sellers warranty A sellers warranty A sellers warranty whether express or whether express or whether express or implied extends to any natural person who is in implied extends to any implied extends to any the family or household natural person who may person who may of his buyer or who is a reasonably be expected reasonably be expected guest in his home if it is to use, consume or be to use, consume or be reasonable to expect that such person may affected by the goods affected by the goods use, consume or be and who is injured in and who is injured by affected by the goods person by breach of the breach of the warranty. and who is injured in warranty. A seller may A seller may not person by breach of the warranty. A seller may not exclude or limit the exclude or limit the not exclude or limit the operation of this operation of this section operation of this section. with respect to injury to section. the person of an individual to whom the warranty extends.
Language of the UCCN.J.S.A 12A:2-318. 13 Pa. Cons. Stat. § 2318 A sellers warranty whether The warranty of a seller express or implied extends to whether express or implied any natural person who is in extends to any natural person the family or household of his who is in the family or buyer or who is a guest in his household of his buyer or who home if it is reasonable to is a guest in his home if it is expect that such person may reasonable to expect that such use, consume or be affected person may use, consume or by the goods and who is be affected by the goods and injured in person by breach of who is injured in person by the warranty. A seller may not breach of the warranty. A exclude or limit the operation seller may not exclude or limit of this section. the operation of this section.
What is the difference?
Disclaimer of Warranties Express: don’t make any a clear written disclaimer in contract will over- ride an express oral warranty because of the parol evidence rule
Disclaimer of Warranties Implied merchantability: say exact work in disclaimer clearly, or say “as is,” “with all faults” fitness for a particular purpose: must be in writing, don’t have to say exact words “f.p.p.” in disclaimer seller demands buyer inspect or examine the goods subject to skill of buyer Unconscionability
Product Liability Based on Negligence If a manufacturer fails to exercise due care to make a product safe, a person who is injured by the product may sue the manufacturer for negligence
Types of Negligence Manufacturing Defects - when the product, for some reason departs from its intended design Design Defects - when the present design is defective and a reasonable alternative design exists which would remedy or lessen the defect. Warning Defects - inadequate instructions for use or prohibited use
Strict Product Liability When an article is placed into the stream of commerce which causes injury because it is in a defective condition unreasonably dangerous.
Elements of Strict Liability Product was sold Product was defective Product placed into stream of commerce by someone in the business of selling that product Product both Cause in fact Proximate cause Defect existed when it left Ds possession Product was manufactured or sold by D