Warranties and Express Conditions

Question 1

Warranty

Answer 1

a promise about a term of the contract that explicitly shifts risk to the party making the promise.

You can disclaim it

Question 2

What are the 3 types of warranties

Answer 2

1. Express Warranties
2. Implied Warranty of Merchantability
3. Implied Warranty Fit for a Particular Purpose

Question 3

Express Warranties

Answer 3

a promise that affirms or describes the goods and that itself is part of the basis for the bargain.

the use of a sample or model good creates an express warranty that the goods sold will be like the sample

Question 4

Implied warranty of merchantably

Answer 4

Is triggered when the seller is a merchant dealing in the goods at issue

The merchant makes an implied warranty (unless disclaimed) that the good are fit for ordinary commercial purposes

• can be disclaimed - conspicuous language that mentions words of warranty of merchantability or words like “as is”

Question 5

Implied Warranty Fit for a Particular Purpose

Answer 5

triggered when a buyer relied on a seller’s expertise to select a special type of good that will be used for a special purpose.

The seller makes an implied warranty (unless disclaimed) that the goods wills satisfy this special purpose.

Applies/can apply to non-merchants as long as the buyer relies on the a seller’s expertise. So if you’re a non-merchant you can exit by implication unless you disclaim it
explicitly or as is basis

Question 6

Conditions

Answer 6

is another way to shift risk by stating that one party’s contractual obligation will kick in only if some future even takes place.

Question 7

Express Conditions

Answer 7

created by language in the K. Magic words like “only if” “provided that” “on the condition that” “only in the event that”

Express Conditions must be satisfied completely(even if harsh) unless excused.

Question 8

How are express conditions met?

Answer 8

Objective standard of satisfaction
- if the most reasonable people would be satisfied, then the condition is met

Exception
- contracts involving aesthetic tastes i.e. arts or tutoring services- subjective standard… Parties can still breach if they claim dissatisfaction in bad faith.

Question 9

Can an express condition be waived?

Answer 9

Yes, by the the party receiving the protection of the condition and can do it by words or conduct.

Also be waived if the other party who is receiving it, hinders the occurrence of the condition.

Question 10

Implied Conditions- Constructive Condition of Exchange

Answer 10

One party’s performance is conditioned on the other side’s performance

Question 11

CCE - common law

Answer 11

CML
- Substantial performance so long as there is no material breach and breach is not wilful

• If Divisibility K is divisible then it will be broken down into mini-Ks for the purposes of determining that there has been substantial performance.

Question 12

CCE- UCC

Answer 12

Requires Perfect Tender - exception- installment Ks

( the parties an contractually change the default rules to include discussion of substnatial performance instead of perfect tender.

Question 13

What is perfect Tender Rule?

Answer 13

CCE- UCC- goods

1. perfect goods
2. perfect delivery

Buyers can revoke an acceptance - when goods seem okay and are accepted at delivery but later find defect with a reasonable time.

Buy must give chance to cure if seller fails to tender perfect goods and time is left on the K or the seller had reasonable groudns to believe that the buyer would accept a replacement

Question 14

Can a non-breaching party in a service K recover?

Answer 14

Yes! they can recover damages for deficiency and typically measured as the cost to complete the performance BUT sometimes the damages will be limited to diminution in market value

Question 15

Breaching Party

Answer 15

Breaching party who fails to satisfy CEE due to material breach will not get paid on the K, but maybe on the Quasi K.

***A breaching party who fails to satisfy an express condition usually is not paid in a quasi K

Question 16

What is the default method of delivery under the UCC in regards to CCE?

Answer 16

1 delivery of goods but the UCC allows for installment Ks agreements for delivery in separate lots -over pieces overtime

Question 17

Rejection in installment Ks

Answer 17

Perfect tender is not required. The buyer can reject a specific delivery that isn’t perfect only where there is a substantial impairment in the installment that cannot be cured.

Question 18

When Goods are not perfect what can the seller do

Answer 18

Two things
1. You can reject/revoke the acceptance of the good.

2. or if you accepted the delivery of goods but later find defect… you can revoke it later, so long as you discover the defect in a reasonable time.
   - Buyer MUST GIVE SELLER a chance to CURE -if time is left on the K or the has reasonable grounds to believe that the buyer would accept replacement

Question 19

Perfect Delivery of goods K?

Answer 19

1. Tender at the seller’s place of biz
2. Shipment K- seller has to take three actions
   i. get the goods to a common carrier (i.e usps, fedex)
   ii. make arrangements for delivery and
   iii. notify the buyer
3. Destination K-(buyer’s place of Biz) The seller must get the good to the buyer’s biz and notify the buyer

*** Destination- buyer shipment- seller

Question 20

what if the there is damage or destruction to goods?

Answer 20

Risk of loss prob

1. check whether the parties have already delt w/ the risk of the prob in the K.
   - if so then their agreement with control but
   - if no, then ask whether either party has breached another part of the K.
   - If so, then the breaching party bears the ROL. this is true even when breach is totally unrelated to the delivery damage.
2. If there is no breach and the goods are shipped, then ask what type of delivery K it was

if shipment K- then ROL during delivery will rest with the buyer

If destination K - ROL rests w buyer

In all other cases, ask whether the seller is a merchant.
if so ROL stays with seller until the buyer receives the goods…if not the risk of loss moves to the buyer when the seller Tenders the goods.