Warranties UCC Terms in Sales of Goods Contracts Flashcards
What is an express warranty?
Look for words that promise, describe or state facts. Distinguish from sales talk which is more general, an opinion. Or, look for sample or model.
Fact pattern will have
1. sale of goods
2. Buyer has goods
3. Unhappy with the quality
Then what are the K terms relating to the goods
1. Express Warranties
What is an implied warranty of merchantability?
When any person buys any goods from any merchant, a term is automatically added to the contract by operation of law – that the goods are fit for the ordinary purpose for which such goods are used.
(a) Triggering fact: seller is a merchant WHICH HERE MEANS IT DEALS IN GOODS OF THAT KIND.
(b) Warranty: goods are fit for ordinary purposes.
HYPO: Warranty of Merchantability: Conviser buys a “gold” chain from Golden Fleece Fine Jewelry Store. Nothing was written or said about the quality of the chain. When Conviser puts the new chain on, his seven chest hairs fall out. Can Conviser recover from the seller on a breach of warranty theory?
Yes - Implied “fit for ordinary purpose” and this was not
HYPO: Warranty of Merchantability: Conviser buys a car from the Golden Fleece Fine Jewelry Store. One day later Conviser cannot get the car to start. Can Conviser recover from the seller on a breach of warranty theory?
No - Because the merchant is not in the business of selling cars
What is the implied warranty of fitness for a particular purpose
(a) Triggering facts: buyer has particular purpose; buyer is relying on seller to select suitable goods; seller has reason to know of purpose and reliance.
(b) Warranty: goods fit for particular purpose.
HYPO: Implied warranty of fitness:
1) Bubba Conviser, Richard’s country cousin, tells a clerk at a shoe store that he needs some shoes to wear to interviews with Wall Street firms. The clerk shows and sells Bubba a pair of white, patent leather loafers. The Wall Street lawyers take one look at Bubba’s shoes and terminate the interview. Is there an implied warranty of fitness?
2) Has it been breached?
3) Is there an implied warranty of merchantability?
4) Has it been breached?
1) Yes - (a)
2) Yes - (b)
3) Yes, the store was a show store
4) Has it been breached?
What are the Limitations on warranty liability?
- Statute of limitations
- Privity
- Buyer’s examination of the goods
4) Disclaimer - e.g. there are no warranties
With Limitations on warranty liability what is the statute of limitations?
There is a four-year statute of limitations, and generally the statute starts running on possible warranty actions when the “tender of delivery is made,” not when the buyer learns that the product is defective. (4 years from tender)
With Limitations on warranty liability what is privity
Privity of contract means that the plaintiff contracted with the defendant. If the plaintiff did not buy the goods from the defendant, there is a possible lack of privity issue. There is a division among states as to how to resolve lack of privity issues. Your state materials will explain the privity law in your state if lack of privity is a possible state essay issue.
What is Privity = Plaintiff and Defendant contracted with each other (ie you bought a gm car from dealer and sue gm, not in privity with gm, in privity with dealer)
With Limitations on warranty liability, what is the buyers examination of the goods?
Look for a fact pattern that tells you that the buyer has examined the goods. There are no implied warranties as to defects which would be obvious on examination.
With Limitations on warranty liability, what is a disclaimer?
(a) Express warranties generally cannot be disclaimed.
(b) Implied warranties of merchantability and fitness can be disclaimed in EITHER of the following ways:
(i) CONSPICUOUS language of disclaimer, mentioning merchantability, OR
(ii) “as is” or “with all faults.”
HYPO: Disclaimer: B buys a big screen television “as is” from S TV Store. Shortly after B turns the television on in her home, it explodes. Can B sue S for breach of the implied warranty of merchantability?
No - Bought “as is”
- “As is” does not have to be conspicuous and neither do “with all faults”
- No effect on express warranties
Do limitations for remedies eliminate warranties?
Limitation of remedies: does not eliminate warranties, simply limits or sets recovery for any breach of warranty:
(a) possible to limit remedies even for express warranties.
(b) general test is unconscionability.
(c) prima facie unconscionable if breach of warranty on consumer goods causes personal injury.
HYPO: Limitation of remedies: B buys an oven from S. The contract provides that, “All operating parts are guaranteed for two years” and “Warranty liability shall be limited to replacement parts.” A defective heating element causes a fire which causes $100 of property damages. If B sues S for breach of contract, what can B recover?
Only the replacement part, to what is limited by the language
