Chapter 16 Law of Warranties

Warranty- A guarantee by the seller or manufacturer that a good or service is not defective.

Implied Warranty– Ordered by the federal government. Both merchants and non merchants are bound by warranties.

  1. Fitness for particular purpose
    • buyer is relying on sellers words that the product/service is to perform for a purpose and does not

Warranty of Merchantibility

  • good musrt be what is in the description
  • fit for ordinary use
  • must be adequately packaged and labeled
  • must conform to statements or promises made on packaging

Express Warranties

  • oral or written guarentee by a manufacturer or a seller
  • created: by a statement of fact or promise made by the seller; by a description of the goods; or by the use of a sample or model

Limited Warranty

  • warranty that provides restricted protection
  • under federal law, it must be labeled as such

Full Warranty

  • a defective product will be fixed or replaced free within a reasonable time after a complaint has been made about it
  • if product breaks down, consumer has choice to get new product, or their money back

Warranty of Title

  • seller warrants that the goods  shall be delivered free of any financial obligations about which the buyer has no knowledge
  • When stolen goods are sold to an innocent purchaser, the true owner, if discovered, is entitled to the return of the goods
  • The innocent purchasers remedy is against the seller for breach of warranty of title

Privity of Contract Not Required

  • People who contract directly with each other are said to be in privity of contract
  • Under UCC, a seller’s warranty extends not only to the buyer, but also to any person in the buyers family or household, or guest if it is reasonable to assume that a guest may use the goods

Exclusion of Warranties

  • sellers are allowed to esclude warranties
  • must be writtena and presented so that it will be readily noticed by the buyer
  • the word merchantability must be mentioned specifically

Duty to Notify and Remedies for Breach

  • in order to recover any money damages for breach of warranty, the buyer myst notify the seller of the defect within a reasonable time after the defect is discovered
  • when sellers are notified that they have a defective product, they work to correct the situation

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