Warranties in Sale-of-Goods Flashcards
Express Warranty
Any promise, affirmation, description, or sample that is part of the basis of the bargain is an express warranty, unless it is merely the seller’s opinion or commendation of the value of the goods.
- A statement of opinion or puffery, however, is not treated as creating an express warranty.
The use of a sample or model will create a warranty that the goods the buyer is to receive will be like the proffered sample or model.
Can an express warranty be made subsequent to the K for sale?
YES.
An express warranty can be made subsequent to the contract for sale.
Although this would modify the original agreement, under the UCC, no consideration is needed to make a modification enforceable.
What is the effect of disclaimer clauses and express warranties grossly conflicting?
Under Article 2, words or conduct relevant to the creation of an express warranty and words or conduct tending to negate or limit warranty are construed as consistent with each other, but negation or limitation is inoperative to the extent such construction is unreasonable.
Thus, disclaimer clauses that grossly conflict with the express warranties, such as “all warranties, express or implied, are disclaimed,” are ignored.
Note, however, that the parol evidence rule may bar evidence of oral express warranties or disclaimers of such warranties.
Implied Warranty of Merchantability
A warranty of merchantability is implied whenever the seller is a merchant.
- For this purpose, to be merchant, the seller must deal in goods of the kind sold. UCC § 2-104(1), cmt. 2.
To be merchantable, goods must be fit for their ordinary purpose and pass without objection in the trade under the contract description.
- A breach of this warranty must have been present at the time of the sale. UCC § 2-314.
Implied Warranty of Fitness for a Particular Purpose
A warranty that the goods are fit for a particular purpose is implied whenever the seller has reason to know (from any source, not just from the buyer) that the buyer has a particular use for the goods, and the buyer is relying upon the seller’s skill to select the goods. UCC § 2-315.
Note that the seller need not be a merchant for this implied warranty to apply.
Disclaimer of Implied Warranties
Implied Warranty of Merchantability
One way for the seller to disclaim the implied warranty of merchantability is to use the term “merchantability.”
This may be done orally.
If it is in writing, the disclaimer language must be conspicuous. UCC § 2-316(2).
Disclaimer of Implied Warranties
Implied Warranty of Fitness for a Particular Purpose
One way for the seller to disclaim the implied warranty of fitness for a particular purpose is to make the disclaimer in writing and use conspicuous language.
Unlike the implied warranty of merchantability, implied warranties of fitness for a particular purpose may be excluded by general language, but only if it is in writing and conspicuous.
Language to exclude all implied warranties of fitness is sufficient if it states, for example, that “There are no warranties that extend beyond the description on the face hereof.”
Disclaimer of Both Implied Warranties
1) “As is” language
* Unless the circumstances indicate otherwise, an implied warranty can also be disclaimed by stating that the goods are sold “as is,” “with all faults,” or by using similar language that makes plain that there is no implied warranty. UCC § 2-316(3)(a).
2) Buyer’s inspection of the goods
* If the buyer, before entering into the K, has examined the goods or a sample or model as fully as the buyer desires, or has refused to examine the goods, then there is no implied warranty with respect to defects that an examination ought to have revealed to the buyer. UCC § 2-316(3)(b).
3) Course of dealing or performance or trade usage
* An implied warranty can also be excluded or modified by course of dealing or course of performance or trade usage. UCC § 2-316(3)(c).
