warranties Flashcards
Steps for Courts to Assess an Express Warranty:
Determine if the statement was an affirmation of fact or opinion.
Determining Whether an Affirmation is a Fact or Opinion
An affirmation is a fact if it can be proven.
Example:
Opinion: “In good health” (subjective, not provable).
Fact: “Never had a broken leg” (provable statement).
If yes, decide if the statement was part of the basis of the bargain.
Assess whether the warranty was breached.
Express Warranty Created when
- Seller makes an affirmation of fact or promise that relates to the goods and becomes part of the basis of the bargain. Or whether the statements were the sellers opinions or puffery.
- OR Seller provides a description of the goods as part of the basis of the bargain.
- OR Seller provides a sample or model, and the goods must conform to it.
all as part of bargain
Express Warranty Created when
(affirmation, description or samp/mod) - all as part of bargain
Sample vs. Model
Sample: Taken from the bulk of goods; common for crops.
Model: Offered for inspection when the actual item is unavailable; e.g., trying on a different-sized garment in-store before ordering.
Implied Warranty of Merchantability arises when
- Ensures goods are fit for ordinary purposes.
- Arises automatically unless expressly disclaimed.
- Guarantees that the goods will function as intended.
- The seller must be a merchant
Implied Warranty of Fitness for a Particular Purpose arises when
- The seller knows the buyer’s specific reason for purchasing the product.
- The buyer relies on the seller’s advice to choose the product.
- It is not required to demonstrate reliance, it is a presumption
claim of implied warrant of merchantability
- Merchant sold the goods.
- Goods were not merchantable at the time of sale.
- Buyer sustained injury or property damage.
- Injury was caused by the defective product.
- Buyer notified the seller.
Implied Warranty of Fitness for a Particular Purpose
Requirements for a claim:
* Seller knew of the buyer’s particular purpose.
* Seller knew buyer relied on their advice.
* Buyer relied on the seller’s skill to select the goods.
As Is
- if a buyer examines or refuses to examine the goods before contracting, there is no implied warranty for defects that should have been discovered.
Implied warranties can be modified by
Course of performance
Course of dealing
Trade usage
general requirements for a buyer to recover damages
- Seller made a warranty (express or implied).
- Warranty was breached (goods did not comply).
- Buyer’s injury was caused by the defective nature of the goods.
- Damages sought .
Merchantability Disclaimer
- exclude or modify the implied warranty of merchantability (could be by course of performance, trade, or dealing
- Must mention “merchantability” clearly. Can be oral or written, but written disclaimers must be conspicuous. (a reasonable person would have noticed it)
implied warranty for fitness for a particular purpose it must only
be in writing, cannot be oral, still must be conspicuous
Conspicuous Terms:
Capital letters, larger text, bold/contrasting color, or symbols that highlight the disclaimer.
It is not determined by the court
* (a reasonable person would have noticed it)
Express Warranty Disclaimer
Not allowed since it contradicts the warranty itself.
Exclusion or limitation or Modification of Warranties
A buyer can limit the warranty of a good but it is typically just limited to “return of the goods and repayment of the price or to repair and replacement
if a seller limits remedy to ultimately be no remedy:
If this is found, the buyer will be fairly placed where they were before the contract.
Statute of Limitations
Warranty breach claims typically have a longer period to file than tort claims.
Post-Sale Disclaimer
If a disclaimer is added after the contract (e.g., on a label or invoice), it is ineffective.
Reason: It would be a modification, which requires assent from both parties.
Warranty of Title:
- The seller is warranting that they have good title to the goods being sold.
- If it is found that the seller does not have the title to the goods, then the rightful owner of the title can receive their goods back.
- And the buyer can sue for bearch of warranty of title, whether or not they knew that they did not have good title, because it is under strict liability.
Consequential damages occur when
a defective product causes substantial harm.
Sellers may disclaim consequential damages, but:
- The disclaimer must be conspicuous.
- Courts may limit a disclaimer if it is deemed unconscionable.
- If the essential purpose of the original remedy fails, a buyer can argue that the consequential damages limitation should also be void.
