Lecture Dynamic business law - Chapter 25: Warranties

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?

Warranties

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Seller’s promise(s) regarding certain 

characteristics of good(s) sold

Warranty

 Express Warranty:  Explicitly stated in contract

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

Express Warranties

warranty

representations become express warranties, and part of contract

Sales “Puffery”

 Definition:  Salesperson’s mere statement of opinion,  rather than representation of facts

 “Puffing” generally does not create express warranty 

liability

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

Types of Warranties:  Implied Warranties of 

Quality

reasonable expectation of product performance

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

Types of Warranties:  Implied Warranties of 

Quality

Implied Warranty of Trade Usage    (Definition):  Warranty that arises as result of 

generally­accepted trade practices

  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

Warranty Disclaimers and Waivers

language

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

whether warranty is “full” or “limited”