Chapter 25Chapter 25WarrantiesWarranties

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Warranty (Definition):Warranty (Definition):

Seller’s promise(s) regarding Seller’s promise(s) regarding certain characteristics of good(s) certain characteristics of good(s)

soldsold

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““Express” Warranty Versus Express” Warranty Versus “Implied” Warranty“Implied” Warranty

Express Warranty: Explicitly stated in Express Warranty: Explicitly stated in contractcontract

Implied Warranty: Automatically (by Implied Warranty: Automatically (by operation of law) applied to contractoperation of law) applied to contract

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Types of WarrantiesTypes of Warranties

Warranties of TitleWarranties of Title

Passage of good titlePassage of good title

Implied promise of no liens/judgments against Implied promise of no liens/judgments against titletitle

Implied promise that title not subject to claims of Implied promise that title not subject to claims of intellectual property (copyright, patent, or intellectual property (copyright, patent, or trademark) infringementtrademark) infringement

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Types of WarrantiesTypes of Warranties

Express WarrantiesExpress Warranties

Description of good’s physical nature or its use Description of good’s physical nature or its use

May be found in advertisements or brochuresMay be found in advertisements or brochures

May be material term of contractMay be material term of contract

Salesperson’s oral promise concerning good can give rise to Salesperson’s oral promise concerning good can give rise to express warrantyexpress warranty

Buyer’s reliance on seller’s representations generally means Buyer’s reliance on seller’s representations generally means those representations become express warranties, and part those representations become express warranties, and part of contractof contract

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Sales “Puffery”Sales “Puffery” Definition: Salesperson’s mere statement Definition: Salesperson’s mere statement

of opinion, rather than representation of of opinion, rather than representation of factsfacts

““Puffing” generally does not create Puffing” generally does not create express warranty liabilityexpress warranty liability

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Types of Warranties: Implied Types of Warranties: Implied WarrantiesWarranties

Implied Warranty of MerchantabilityImplied Warranty of Merchantability (Definition): (Definition): Warranty based on reasonable expectation of product Warranty based on reasonable expectation of product performanceperformance

Good purchased must:Good purchased must:

Pass without objection in trade/market for similar goodsPass without objection in trade/market for similar goods

Be of fair quality (within the product’s description)Be of fair quality (within the product’s description)

Be fit for “ordinary use”Be fit for “ordinary use”

Have “even kind, quality and quantity”Have “even kind, quality and quantity”

Be adequately packaged and labeledBe adequately packaged and labeled

Conform to promises made on package/product labelConform to promises made on package/product label

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Types of Warranties: Implied Types of Warranties: Implied WarrantiesWarranties

Implied Warranty of Fitness For Particular Implied Warranty of Fitness For Particular PurposePurpose

(Definition): Warranty that arises when seller (Definition): Warranty that arises when seller knows purpose for which buyer purchasing knows purpose for which buyer purchasing goods, and buyer relies on seller’s judgment to goods, and buyer relies on seller’s judgment to recommend/select certain productrecommend/select certain product

Seller does Seller does notnot have to be merchant to make this have to be merchant to make this warrantywarranty

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Types of Warranties: Implied Types of Warranties: Implied WarrantiesWarranties

Implied Warranty of Trade UsageImplied Warranty of Trade Usage

(Definition): Warranty that arises as (Definition): Warranty that arises as result of generally-accepted trade result of generally-accepted trade practicespractices

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Warranty Rights of Third Parties:Warranty Rights of Third Parties: Third Party Beneficiaries of Third Party Beneficiaries of

WarrantiesWarranties Seller’s warranties may extend to:Seller’s warranties may extend to:

Buyer’s household members and guestsBuyer’s household members and guests

Any “reasonable and foreseeable” userAny “reasonable and foreseeable” user

Anyone injured by goodAnyone injured by good

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Warranty Disclaimers and WaiversWarranty Disclaimers and Waivers

Methods of Disclaiming/Waiving Warranties:Methods of Disclaiming/Waiving Warranties:

Seller does not make express warrantiesSeller does not make express warranties

Seller disclaims implied warranties in clear, unambiguous, Seller disclaims implied warranties in clear, unambiguous, conspicuous languageconspicuous language

Buyer fails/refuses to examine goodsBuyer fails/refuses to examine goods

Buyer fails to file suit within applicable statute of Buyer fails to file suit within applicable statute of limitations periodlimitations period

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Magnuson-Moss Magnuson-Moss Warranty ActWarranty Act

Provides that if seller decides to issue Provides that if seller decides to issue written warranty for consumer good, written warranty for consumer good,

seller must specify whether warranty is seller must specify whether warranty is “full” or “limited”“full” or “limited”

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