Contracts: Terms - Warranties & Product Liabilities

Question 1

UCC Article 2:

Express Warranties

Answer 1

• Affirmation of fact/promise of performance
• Description of goods
• Samples or models
  Nature:
• can be oral or written
• in brochures, advertisments, etc.
• created without words warranty or guarantee
• given by merchants and non-merchants alike
  Disclaimer:
• Impossible to disclaim a written express warranty
• disclaimer of oral warranties must be specific, unambiguous, and call attention of the buyer.

Question 2

UCC Article 2:

Implied Warranty of Title

Answer 2

Content:
- seller has good title and it is transferable
- No outstanding liens, encumbrances, or security interests are hidden
- If seller is a merchant, goods will be delivered free from third party claims
Disclaimer:
- Can be disclaimed by language or buyer’s knowledge of title problems
- General disclaimer of warranties doesn’t work
- or circumstances where buyer should have been aware there was no warranty of title (trunk of car)

Question 3

UCC Article 2:

Implied Warranty of Merchantibility

Answer 3

Criteria:
- Made only by a merchant. 
Disclaimer:
- must mention word "merchantibility"
- can be oral or in writing (conspicuous)

Question 4

UCC Article 2:

Implied Warranty of Fitness for a Particular Purpose

Answer 4

Criteria:
- seller must expressly or by implication know the purpose or buyers use of goods AND
- buyer must rely on sellers selection or recommendation in making the purchase
Disclaimer:
- must be in writing and conspicuous

Question 5

UCC Article 2:
Both:
Implied Warranty of Merchantibility
Implied Warranty of Fitness for a Particular Purpose

Answer 5

Can be disclaimed by words such as
“sold as is”
“sold with all faults”
“As they stand”

Other warranties cannot be disclaimed w/ this wording

Question 6

UCC Article 2:

Strict Tort Liability

Answer 6

Privity Issue:
- Article 2 does not require privity of contract for liability
- Extends warranty protection to third parties that could be expected to use a product
Requirements:
- Unreasonably Dangerous:
1. Defective in design
2. Defective in manufacture
3. Defective in lack of warnings
- Seller is in business of selling and/or manufacturing
- Product reached the buyer in same condition it was when it left the manufacturer
Negligence:
- same elements as strict tort liability
- but also requires knowledge, the seller/manufacturer was aware
- knowledge allows for recovery of punitive damages