Warranties Flashcards
Implied Warranty of Title
Any seller of goods warrants:
1) the title conveyed shall be goods and the transfer rightful; and
2) the goods are free from any security interests, liens, or encumbrances of which the buyer does not have actual knowledge at the time of formation.
Warranty Against Infringement
A seller who is a merchant who deals in goods of the kind warrants against infringement claims, but a buyer who furnishes specifications to the seller for fabrication must hold the seller harmless for compliance with the specifications
infringement claims - IP, copyright, patents
Abrogation of Implied Warranty of Title
For a seller to remove the implied warranty of title, there must be specific language or circumstances which give the buyer reason to know that the seller either does not claim title or is only purporting to convey the title the seller has.
Language which merely attempts to limit the seller’s liability will fail
Power to Transfer Title
A transferor has the power to transfer as much title as the transferor has. If the title is merely voidable, a transferor has the power to transfer perfect title to a good faith purchaser for value. If the title is void, no one will have title.
Entrustment
Any entrustment of possession of goods to a merchant who deals in goods of the kind gives the merchant the power to transfer perfect title to a buyer in the ordinary course.
Express Warranty
The elemental requirements for the creation of an express warranty are an affirmation of a fact or promise, or a description, sample, or model, which relates to the goods, and forms the basis of the bargain
NOTE – a statement relating merely to the value of the goods or purporting only to be the seller’s opinion does not create an express warranty
Creation of an Express Warranty
It is not necessary to the creation of an express warranty that the seller use formal words such as “warranty” or “guarantee” or the seller have the specific intent to make a warranty. (can do so accidentally)
Implied Warranty of Merchantability
The implied warranty of merchantability will be present if the seller is a merchant who deals in goods of the kind, and the warranty has not been abrogated.
The seller will warrant at least:
1) The goods would pass without objection in the trade; and
2) the goods are fit for the ordinary purposes for which such goods are used
Implied Warranty of Fitness for Particular Purpose
If at the time of contracting, the seller has reason to know of the particular purpose for which the buyer intends to use the goods, the seller has reason to know the buyer is relying on the seller’s skill or judgment for selection of the goods, and the buyer actually relies, there is, unless excluded, an implied warranty that the goods shall be fit for such purpose.
Abrogation of Express Warranty
A seller cannot abrogate an express warranty, but the buyer is still required to prove the existence of the express warranty
Individual Abrogation of Merchantability and Fitness
1) If the seller wants to individually abrogate the implied warranty of merchantability, the seller must use the word merchantability and IF ITS IN WRITING it must be conspicuous
2) If the seller wants to individually abrogate the implied warranty of fitness for a particular purpose, no specific language is required but IT MUST BE IN WRITING and conspicuous
GA Conspicuous
Printed heading in capital = conspicuous
language in body that is larger or contrasting type or color = conspicuous
Any stated term in a telegram is conspicuous
As Is Abrogation
Unless the circumstances indicate otherwise, all implied warranties are excluded by expressions like “as is”, “with all faults”, or “as they stand”, if they are in writing and conspicuously located.
NOTE - doesn’t abrogate the implied warranty of title
Abrogation by Examination
1) If before formation, the buyer examines the goods to the buyer’s satisfaction, the buyer cannot maintain claims for defects the buyer ought to have found during the examination.
2) If the seller demands inspection before formation, and the buyer refuses, the buyer cannot maintain claims for defects the buyer could have ascertained through inspection.
To Whom do Warranties Extend To
Most states hold that the seller’s warranty liability extends to any natural person who is in the family or household of the buyer or who is a guest in the buyer’s home if it is reasonable to expect that person may use, consume, or to be affected by the goods and that person suffers personal injury because of a breach of warranty.
