After reading this chapter, you will be able to answer the following questions: What are express warranties? What is the implied warranty of title? What is the implied warranty of merchantability? What is the implied warranty of fitness for a particular purpose? Do warranties apply to third parties? Can warranties be disclaimed?
Chapter 25 Warranties Copyright © 2015 McGrawHill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGrawHill Education Warranty (Definition): Seller’s promise(s) regarding certain characteristics of good(s) sold 252 “Express” Warranty Versus “Implied” Warranty Express Warranty: Explicitly stated in contract Implied Warranty: Automatically (by operation of law) applied to contract 253 Types of Warranties Express Warranties Description of good’s physical nature or its use May be found in advertisements or brochures May be material term of contract Salesperson’s oral promise concerning good can give rise to express warranty Buyer’s reliance on seller’s representations generally means those representations become express warranties, and part of contract 254 Sales “Puffery” Definition: Salesperson’s mere statement of opinion, rather than representation of facts “Puffing” generally does not create express warranty liability 255 Types of Warranties Implied Warranties of Title Passage of good title Implied promise of no liens/judgments against title Implied promise that title not subject to claims of intellectual property (copyright, patent, or trademark) infringement 256 Types of Warranties: Implied Warranties of Quality Implied Warranty of Merchantability (Definition): Warranty based on reasonable expectation of product performance Good purchased must: Pass without objection in trade/market for similar goods Be of fair quality (within the product’s description) Be fit for “ordinary use” Have “even kind, quality and quantity” Be adequately packaged and labeled Conform to promises made on package/product label 257 Types of Warranties: Implied Warranties of Quality Implied Warranty of Fitness For Particular Purpose (Definition): Warranty that arises when seller knows purpose for which buyer purchasing goods, and buyer relies on seller’s judgment to recommend/select certain product Seller does not have to be merchant to make this warranty 258 Types of Warranties: Implied Warranties of Quality Implied Warranty of Trade Usage (Definition): Warranty that arises as result of generallyaccepted trade practices 259 Warranty Rights of Third Parties: Third Party Beneficiaries of Warranties Seller’s warranties may extend to: Buyer’s household members and guests Any “reasonable and foreseeable” user Anyone injured by good 2510 Warranty Disclaimers and Waivers Methods of Disclaiming/Waiving Warranties: Seller does not make express warranties Seller disclaims implied warranties in clear, unambiguous, conspicuous language Buyer fails/refuses to examine goods Buyer fails to file suit within applicable statute of limitations period 2511 MagnusonMoss Warranty Act Provides that if seller decides to issue written warranty for consumer good, seller must specify whether warranty is “full” or “limited” 2512 ... Express Warranty: Explicitly stated in contract Implied Warranty: Automatically (by operation of law) applied to contract 253 Types of Warranties Express Warranties Description of good’s physical nature or its use May be found in advertisements or brochures... Warranty Disclaimers and Waivers Methods of Disclaiming/Waiving Warranties: Seller does not make express warranties Seller disclaims implied warranties in clear, unambiguous, conspicuous language... Implied promise that title not subject to claims of intellectual property (copyright, patent, or trademark) infringement 256 Types of Warranties: Implied Warranties of Quality Implied Warranty of Merchantability (Definition): Warranty based on