10. Warranties (Art 2)

Question 1

Who do warranties apply to?

Answer 1

Initial buyer (UCC)

Buyer’s family/household
- Natural persons

Buyer’s home (guests) (Alternative A - some states)

1) Reasonably expected to use goods
2) Suffers personal injury from goods

Question 2

What is required for express warranty?

Answer 2

1) Affirmation of fact/promise/description/model/sample (becomes basis of bargain)
- No intent required
- NOT value of goods/opinion

2) Came at time when Buyer could have relied on
- No actual reliance required

Question 3

Can express warranties be disclaimed?

Answer 3

Yes (very difficult)

Question 4

What is the purpose of warranty of title?

Answer 4

Good title

Rightful transfer

No liens/encumbrances that Seller is unaware of

Question 5

Must warranty of title be included in the contract?

Answer 5

No (automatically included)

Question 6

What is required for disclaiming warranty of title?

Answer 6

By specific language

By notifying Buyer that Seller has no claim to title

By notifying Buyer that Seller/TP is selling rights

Question 7

What is the purpose of implied warranty of merchantability?

Answer 7

Goods fit for ‘ordinary’ purpose for which goods are used

Seller is ‘absolutely’ liable whether or not Seller knew defects

Question 8

What is required for implied warranty of merchantability?

Answer 8

1) Merchant seller

2) Deals in goods of the kind sold

Question 9

What is required for implied warranty of fitness for purpose?

Answer 9

1) Seller has reason to know particular purpose + Buyer’s reliance on Seller’s skill to select suitable goods
2) Buyer relies on Seller’s skill

Question 10

What is required for disclaiming implied warranties?

Answer 10

General disclaimer (less likely effective - depends on circumstances)

• ‘As is’/’With all faults’
• Buyer’s examination/refusal to examine before entering contract
• By course of dealing/performance/usage of trade

Specific disclaimer

1) Conspicuous writing
2) ‘Merchantability’ mentioned (only for implied warranty of merchantability)

Question 11

What remedies are available for breach of warranties?

Answer 11

Express/Implied warranty

1) Damages (based on warranted value)
2) Incidental damages
3) Consequential damages

Warranty of title (true owner dispossesses Buyer)

• Rescission
• Rejection
• Damages (warranted value)

Question 12

Are there limits to remedies/disclaimers?

Answer 12

Limitation on damages clause (remedies)

• UNLESS personal injury
• UNLESS remedy fails of its essential purpose

Unconscionability test (remedies/disclaimers)