Porter's Glossary Part II

Question 1

Warranty of Fitness

Answer 1

Fitness for a particular purpose. If the seller has reason to know of any particular purpose for which the goods are required and that the buyer is relying on the seller’s skill or judgment to furnish suitable goods for that purpose, an implied warranty of fitness for that particular purpose arises.

Question 2

Warranty of Merchantability

Answer 2

An “implied warranty that goods are merchantable” means that the consumer goods meet each of the following: pass without objection in the trade under the contract description; are fit for the ordinary purposes for which such goods are used; are adequately contained, packaged, and labeled; and conform to the promises or affirmations of fact made on the container or label.

Question 3

Warranty of Title

Answer 3

An implied promise that the seller owns the item offered for sale; the title conveyed shall be good, its transfer rightful, and the goods shall be delivered free from any security interest or other lien or encumbrance of which the buyer at the time of contracting has no knowledge.

Question 4

Work Change Directive

Answer 4

AIA Document G714, Construction Change Directive, and EJCDC C-940, Work Change Directive, direct the contractor to make a change to the project before the owner and contractor have agreed upon the proposed changes in contract sum or time. Change directives are used in the absence of an agreement between the owner and the contractor on the terms of a change order or when the value of a change cannot be determined until after the work is performed. The change directive may or may not affect the contract sum or time; however, the change directive serves as notice that the change will be incorporated in a change order once the value of the work is established.

Question 5

Workers’ Compensation

Answer 5

All states have laws that provide compensation to a worker if the worker is injured while at work for an employer, whether or not the employer has been negligent. The workers’ compensation laws apply to all individuals, except those specifically excluded.

Question 6

Workers’ Compensation Insurance

Answer 6

Although popularly classified as liability insurance, workers’ compensation insurance is more accurately described as protection given to an employee by an employer in accordance with a statutory no-fault/limited liability agreement. Under workers’ compensation laws, some form of which exists in all states, employers must compensate their employees for employment-related injuries, regardless of fault.

Question 7

Workmanship

Answer 7

Workmanship is often confused with the term quality. As quality is a mirror of the requirements, the requirements need to reflect what is intended. Workmanship generally refers to precision, perfection, and craftsmanship. These requirements have measurable properties and can be specified with a means to verify compliance.

Question 8

XCU Exclusion

Answer 8

In its basic form, the comprehensive general liability policy has an exclusion usually called the XCU exclusion, which is an abbreviation for explosion, collapse, and underground damage.

Question 9

XCU Exclusion (not defined by IRMI)

Answer 9

A common exclusion from liability coverage for damages to others caused by blasting and explosion, collapse of structures, and underground excavation damage to property.