Chap 24 Products Liability Warranties

Question 1

a warranty

Answer 1

obligates the seller to assure that the goods he/she sells will conform to certain qualities, characteristics or conditions

Question 2

a seller, however, is not required to warrant

Answer 2

the goods and in general, he may by appropriate words, disclaim (exclude) or modify a particular warranty or even all warranties

Question 3

in bringing a warranty action, the buyer must prove that

Answer 3

1 a warranty existed
2 the warranty has been breached
3 the breach of the warranty caused the loss suffered and
4 notice of the breach of warranty was given to the seller

Question 4

in a breach of warranty

Answer 4

the buyer may choose to reject or revoke acceptance of the goods

in either case, the buyer may recover a judgement against the seller for damages, including personal injury, damage to property and economic loss

Question 5

a warranty may arise out of

Answer 5

the mere existence of a sale (warranty of title), our of any affirmation of fact or promise made by the seller to the buyer (an express warranty), or out of the circumstances under which the sale is made (an implied warranty)

Question 6

warranty of title

Answer 6

a seller implicitly guarantees that good title is conveyed to the buyer

this includes warranting that the property is not subject to a lien or security interest of which the buyer is unaware

Question 7

warranty against infringement

Answer 7

merchant sellers regularly dealing in goods of the kind warrant to buyers that the goods will be delivered to the buyer free of any infringement of patent or trademark

buyers who furnish to the sellers the specifications for the manufacture of the product likewise agree to hold the seller harmless against any such claim for infringement which results from the sellers compliance with such specifications

Question 8

which warranties are put there by law

Answer 8

warranty of title and warranty against infringement

Question 9

express warranties

Answer 9

expressions by the seller regarding the quality or nature of the goods; may include affirmation of facts or promises, descriptions or a sale by a model or sample of the goods, which relate to the goods and are made a part of basis of the bargain

such actions create an express warranty that such goods shall conform to the affirmation, promise, description, sample or model

Question 10

express warranties may be

Answer 10

oral or in writing

Question 11

it is not necessary that the seller

Answer 11

have intent to create an express warranty or use formal word such as “warrant” or “guarantee”

Question 12

sales talk

Answer 12

puffing, a commendation of the goods or rendering a non expert opinion is not normally considered to be factual and will not create an express warranty

Question 13

expression of value based on fact

Answer 13

such as the price previously paid for the merchandise does create an express warranty

even if a seller does not have knowledge of the falsity of a statement she makes, she may still be liable for breach, however to prove fraud on the part of the seller, the buyer would have to demonstrate both intent and knowledge of falsity (scienter)

Question 14

basis of bargain

Answer 14

the code does not require that the buyer rely on the expression, it matters only that the warranty was part of the basis of the bargain

Question 15

is sales talk a breach of warranty?

Answer 15

no

Question 16

implied warranties

Answer 16

are not created by expressions of the seller like express warranties; rather, the code makes implied warranty implicit in the transaction in order to provide protection to the buyer

Question 17

an implied warranty arises

Answer 17

out of the circumstances under which the parties enter into their contract and is simply an operation of law

Question 18

merchantability

Answer 18

the implied warranty of merchantability guarantees that the product is merchantable

Question 19

merchantable

Answer 19

i.e. among other things it will pass without objection in the trade, is in the case of fungible goods of fair, average quality, are fit for the ordinary purpose for which the goods are used, run within variations permitted by the agreement, adequately contained, packaged and labeled as per the agreement, conform to any promise or affirmation made on the container label, if any

Question 20

a warranty of merchantability

Answer 20

is only made by a merchant seller and also provides that the serving of food or drink for value to be consumed either on the premises or elsewhere is a sale to which the implied warranty of merchantability applies

Question 21

fitness for a particular purpose

Answer 21

if a seller (including merchants and non merchants alike) sells a product having reason to know the buyers purpose in purchasing the goods and that the buyer is relying on the sellers skill and judgement in furnishing suitable goods to the buyer there is unless excluded or modified an implied warranty that the goods shall be fit for such purpose

Question 22

note that reliance by the buyer

Answer 22

on the sellers skill and judgement is critical to establishing the existence of fitness for a particular purpose warranty

Question 23

technical obstacles which limit the use of a warranty for a buyer

Answer 23

to recover loss or damages include disclaimers of warranties, limitations or modifications of warranties, privity, notice of breach and the conduct of the plaintiff

Question 24

a disclaimer

Answer 24

(negation of warranty) must be positive, explicit, unequivocal and conspicuous

in general, a seller cannot provide an express warranty and then disclaim it

a seller can however carefully refrain from making an express warranty by not making any promises or affirmations of fact, not describing the goods or not using a sample of model in a sale

Question 25

to exclude or to modify the warranty of title

Answer 25

the seller must use specific language or there must be circumstances in which the buyer should know that the seller would not ordinarily have title to goods which are being sold

Question 26

in an implied warranty of merchantability

Answer 26

the language of the disclaimer or modification must mention merchantability and in the case of writing must be conspicuous

Question 27

to exclude or modify the implied warranty of fitness for the particular purpose of the buyer

Answer 27

the disclaimer must be in writing and conspicuous

language to exclude all implied warranties of fitness will be sufficient if it states, for example, “there are not warranties which extend beyond the description on the face hereof”

Question 28

notwithstanding the above

Answer 28

all implied warranties may be disclaimed by using words such as “as is” “with all faults” or other language that in common understanding calls the buyers attention to the exclusion of warranties and makes it plain that there is no implied warranty

Question 29

examination or refusal to examine

Answer 29

if the buyer inspects the goods, implied warranties do not apply to obvious defects that are apparent on examination

the warranties also do not apply where the buyer has refused to examine the goods or where the examination should have revealed the obvious

Question 30

if buyer knows of lack of conformity upon entering the contract

Answer 30

the seller is not liable for the warranty of particular purpose, ordinary purpose or sale by sample or model

Question 31

the FTC has established

Answer 31

guidlines for the type of consumer product warranty information a seller must supply

Question 32

limitation or modification of warranties

Answer 32

if not unconscionable, the parties may by contract limit or modify warranties or impose time limits within which the warranty is effective

Question 33

privity of contract

Answer 33

common law required that the plaintiff have a contractual relationship with the defendant in order to pursue a breach of warranty action

this relationship is known as privity of contract

Question 34

horizontal privity refers

Answer 34

to noncontracting parties injured by defective goods

the code relaxes the requirements for determining to whom horizontal privity extends

in addition, the UICC provides three alternatives which are available for adoption by the states

Question 35

UCC 2-318 alternative A

Answer 35

sellers warranty whether express or implied

1 extends to natural persons (but not artificial entities such as corporations)
2 in the family or household of the buyer or a guest in the home
3 if such person may reasonably be expected to use, consumer or be affected by the goods
4 who is injured in person (not property) by breach of warranty
5 seller may not exclude or limit the operation of this section

Question 36

most states have, for all practical purposes

Answer 36

eliminated privity of contract in warranty cases

Question 37

notice of breach of warranty

Answer 37

the buyer must notify the seller of any warranty breach within a reasonable time or she will not be permitted to recover

in determining a reasonable period of time, commercial standards apply to a merchant buyer while more lenient standards apply to a retail consumer

Question 38

plaintiffs conduct

Answer 38

contributory and comparative negligence are tort defenses and usually cannot be used as a defense to a breach of warranty action

voluntary assumption of the risk is a defense if the buyer is aware of defects in the product and continues to use it

Question 39

elements of negligence

Answer 39

1 defendant owes plaintiff a legal duty (i.e. duty imposed by law)
2 defendant breaches the legal duty
3 plaintiff sustains injury (to person or property)
4 injury to plaintiff is proximately caused by breach of the legal duty

Question 40

for proximate cases

Answer 40

the injury must be foreseeable

in other words it cannot be so remote as to not be reasonably contemplated by the defendant

Question 41

obstacles to recovery

Answer 41

contributory negligence

comparative negligence

Question 42

contributory negligence

Answer 42

if plaintiff is found to have been negligent (irrespective of the percentage) in contributing to his/her injury, he/she will recover nothing

few states still follow this doctrine

Question 43

comparative negligence

Answer 43

this is the more modern view

measures the negligence between plaintiff and defendant

some states hold that if a plaintiffs share of the responsibility exceeds a stated amount (75%) plaintiff will recover nothing

Question 44

strict liability in tort

Answer 44

402A of the Restatement of Torts 2nd imposes strict liability in tort on merchant sellers for personal injuries and property damage that result from selling a product in a defective condition, which makes the product reasonably dangerous to the user or consumer

strict liability actions focus on the product, not on the conduct of the manufacturer, and do not require the plaintiff to prove that the injury or property damage resulted from the negligence of the seller, or that the consumer had a contractual relationship with the seller

Question 45

requirements of strict liability in tort

Answer 45

1 the defendant was engaged in the business of selling such a product (i.e. a merchant)
2 the defendant sold the product in a defective condition
3 the defective made the product unreasonably dangerous
4 there was no substantial change in the condition go the goods from the time they were sold (i.e. the defect existed a the time it left the defendants hands, and the goods were not modified between the time that they left the seller to the time they reached the hands of the consumer or user
5 the plaintiff sustained physical harm or property damage by use or consumption of the product and the defect was the proximate cause of the injury or damage
6 seller is liable even though it used all possible care in the preparation and sale of the product (i.e. seller was not negligent)
7 seller is liable even though the ultimate used or consumer has not bought the goods from or entered into any contractual relationship with the seller (i.e. there is not privity of contract needed between seller and ultimate user)

Question 46

majority of courts have held that

Answer 46

402A imposes liability only for injury to person and property damage, not for commercial loss, such as business interruption

Question 47

some jurisdictions are including

Answer 47

merchant-sellers of used goods, but not the occasional seller

Question 48

manufacturing defect

Answer 48

product does not work properly

malfunction

Question 49

design defect

Answer 49

created by inadequate plans or specifications, such as deficient engineering or selection of materials

Question 50

failure to warn

Answer 50

where use of a product gives rise to a foreseeable danger of physical injury without adequate instructions or warning, the seller has a duty to warn

if a product is dangerous, it will be held to be defective absent a warning where it can be shown that a superior design or production process existed

Question 51

unreasonably dangerous

Answer 51

products are unreasonably dangerous because of the defect (i.e. the danger) is beyond that to be reasonably assumed by the ordinary buyer

Question 52

construe defect

Answer 52

broadly, not narrowly