Warranties and Disclaimers Flashcards
Express Warranty
A promise that a thing or fact is true, will become true, or will remain true
* A breach of warranty will result in a breach of contract claim allowing the non-breaching party to pursue damages
* CBS v. Ziff-Davis is an example of “representations and warranties”clauses in sophisticated business purchase agreements (mergers &acquisitions)
* A breach of the representations and warranties by Ziff-Davis allowed CBS to recover no matter what CBS’ actual knowledge was
case:
UCC Implied Warranties
These warranties accompany all sales of goods unless explicitly excluded
- Implied Warranty of Merchantability (2-314) – a warranty that the thing sold would be acceptable for purchase and re-sale by a merchant who deals in that particular good (merchant sellers only) ** **Example could be a best buy merchandise in the box..
- Implied Warranty of Fitness for a Particular Purpose (2-315)– a warranty that arises when a purchaser 1) expresses a particular purpose for a good and 2) relies on the expertise and judgment of the seller to select appropriate goods **Example: boat seller or lawn mower example…
Implied Warranty of Merchantability
Goods to be merchantable must be at least such as
:(a) pass without objection in the trade under the contract description; and
(b) in the case of fungible goods, are of fair average quality within the description; and
(c) are fit for the ordinary purposes for which such goods are used; and
(d) run, within the variations permitted by the agreement, of even kind, quality and quantity within each unit and among all units involved; and
(e) are adequately contained, packaged, and labeled as the agreement may require; and
(f) conform to the prom or affirmations of fact made on the container or label if any.
ALL UCC WARRANTIES CAN BE DISCLAIMED
COURTS TYPICALLY REQUIRE DISCLAIMERS OF WARRANTIES TO BE FULLYCAPITALIZED AND CONSPICUOUS IN ORDER TO BE VALID
- THE AMAZON SERVICES AND ALL INFORMATION, CONTENT, MATERIALS,PRODUCTS (INCLUDING SOFTWARE) AND OTHER SERVICES INCLUDED ON OROTHERWISE MADE AVAILABLE TO YOU THROUGH THE AMAZON SERVICES AREPROVIDED BY AMAZON ON AN “AS IS” AND “AS AVAILABLE” BASIS, UNLESSOTHERWISE SPECIFIED IN WRITING. AMAZON MAKES NO REPRESENTATIONS ORWARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, AS TO THE OPERATION OF THEAMAZON SERVICES, OR THE INFORMATION, CONTENT, MATERIALS, PRODUCTS(INCLUDING SOFTWARE) OR OTHER SERVICES INCLUDED ON OR OTHERWISEMADE AVAILABLE TO YOU THROUGH THE AMAZON SERVICES, UNLESSOTHERWISE SPECIFIED IN WRITING. YOU EXPRESSLY AGREE THAT YOUR USE OFTHE AMAZON SERVICES IS AT YOUR SOLE RISK.
UCC 2-317 CUMULATION AND CONFLICT OF Warranties
Warranties whether express or implied shall be construed as consistentwith each other and as cumulative, but if such construction isunreasonable the intention of the parties shall determine whichwarranty is dominant. In ascertaining that intention the following rulesapply:*
(a) Exact or technical specifications displace an inconsistent sample or model or general language of description.* (b) A sample from an existing bulk displaces inconsistent general language of description.* (c) Express warranties displace inconsistent implied warranties other than an implied warranty of fitness for a particular purpose
Basic Obligations
Once the contract for sale is made 2-204 any manner sufficient to show agreement
The obligation of the seller is to transfer and deliver goods
The obligations of the buyer is to accept and pay for the goods 2-301.
2-703 - Sellers Remedies in General
Where the buyer wrongfully rejects or revokes acceptance of goods or fails to make apayment due on or before delivery or repudiates with respect to a part or the whole,then with respect to any goods directly affected and, if the breach is of the wholecontract (Section 2-612), then also with respect to the whole undelivered balance, theaggrieved seller may
(a) withhold delivery of such goods;
(b) stop delivery by any bailee as hereafter provided (Section 2-705);
(c) proceed under the next section respecting goods still unidentified to the contract;
(d) resell and recover damages as hereafter provided (Section 2-706);
(e) recover damages for non-acceptance (Section 2-708) or in a proper case the price(Section 2-709)
;(f) cancel
2-708 Sellers Damages for non acceptance or repudiation
(1) Subject to subsection (2) and to the provisions of this Article with respect toproof of market price (Section 2-723), the measure of damages for non-acceptance or repudiation by the buyer is the difference between the market price at the time and place for tender and the unpaid contract price together with any incidental damages provided in this Article (Section 2-710), but less expenses saved in consequence of the buyer’s breach.*
(2) If the measure of damages provided in subsection (1) is inadequate to put the seller in as good a position as performance would have done then the measure of damage is the profit (including reasonable overhead) which the seller wouldhave made from full performance by the buyer, together with any incidentaldamages provided in this Article (Section 2-710), due allowance for costs reasonably incurred and due credit for payments or proceeds of resale.* [Lost Volume Seller concept]
2-238 sale by auction
(1) In a sale by auction if goods are put up in lots each lot is the subject of a separate sale
.(2) A sale by auction is complete when the auctioneer so announces by the fall of the hammeror in other customary manner. Where a bid is made while the hammer is falling in acceptanceof a prior bid the auctioneer may in his discretion reopen the bidding or declare the goods soldunder the bid on which the hammer was falling.
(3) Such a sale is with reserve unless the goods are in explicit terms put up without reserve. Inan auction with reserve the auctioneer may withdraw the goods at any time until he announcescompletion of the sale. In an auction without reserve, after the auctioneer calls for bids on anarticle or lot, that article or lot cannot be withdrawn unless no bid is made within a reasonabletime. In either case a bidder may retract his bid until the auctioneer’s announcement ofcompletion of the sale, but a bidder’s retraction does not revive any previous bid.
(4) If the auctioneer knowingly receives a bid on the seller’s behalf or the seller makes orprocures such a bid, and notice has not been given that liberty for such bidding is reserved, thebuyer may at his option avoid the sale or take the goods at the price of the last good faith bidprior to the completion of the sale. This subsection shall not apply to any bid at a forced sale
2-710 Sellers Incidental Damages
Incidental damages to an aggrieved seller include any commerciallyreasonable charges, expenses or commissions incurred in stoppingdelivery, in the transportation, care and custody of goods after thebuyer’s breach, in connection with return or resale of the goods orotherwise resulting from the breach
