14.1 Express and Implied Warranties

After finishing this section, you will know how to: Describe the three ways an express warranty

can be made State the obligations of merchants under the

Magnuson Moss Warranty Act Contrast a full warranty with a limited warranty Differentiate between the implied warranty of

fitness for a particular purpose and the implied warranty of merchantability

Warranty- SELLER’S GUARANTEE THAT THEIR PRODUCT IS NOT DEFECTIVE AND THAT IT IS SUITABLE FOR THE USE FOR WHICH IT WAS INTENDED

Warranties are intended to: PROVIDE AN INCENTIVE TO BUY IMPROVE THE QUALITY OF

PRODUCTS

There are 2 types of warranties under the UCC:

Express warranty Implied warranty

Express warranty- ORAL OR WRITTEN GUARANTEE BY THE MANUFACTURER OR SELLER

There are 3 types of express warranties: STATEMENT OF FACT OR PROMISE BY

THE SELLER DESCRIPTION OF THE GOODS USE OF SAMPLE OR MODEL

Statement or promise STATEMENT OF AN EXISTING FACT: Example 1 PROMISE OF SOMETHING THAT MAY

HAPPEN IN THE FUTURE: Example 2 EXPRESS WARRANTIES ARE OFTEN FOUND

IN SALES BROCHURES, CIRCULARS, AND ADVERTISEMENTS.

Example 3

STATED IN CLEAR, PRECISE, AND UNDERSTANDABLE TERMS

TRY TO GET THE WARRANTY IN WRITING

DOESN’T HAVE TO BE WRITTEN, BUT IT MAKES IT EASIER TO PROVE

PAROL EVIDENCE RULE APPLIES OPINIONS ARE NOT WARRANTIES

Description of the goods- THE SELLER WARRANTS THAT THE GOODS WILL BE THE SAME AS THE DESCRIPTION

Example 4 Sample or model- THE SELLER

WARRANTS THAT THE GOODS WILL BE THE SAME AS THE SAMPLE OR MODEL

Example 5

Consumer protection Guarantee- A PROMISE OR

ASSURANCE OF THE QUALITY OR LIFE OF A PRODUCT

ANOTHER NAME FOR EXPRESS WARRANTY

Guarantor- ONE MAKING THE PROMISE Example 6

A GUARANTEE NEEDS TO BE STATED CLEARLY

FTC- FEDERAL AGENCY SET UP IN 1914 TO ENSURE FAIR ECONOMIC PRACTICES

Magnuson-Moss Warranty Act (1975)- FTC CAN DEVELOP RULES REGUALTING THE ADVERTISEMENT OF GRARANTEES AND TO ENFORCE THESE GUIDELINES

PRODUCT OR PART COVERED BY THE GUARANTEE

TIME LIMIT WHEN THE PRODUCT IS ADVERTISED WITH A “LIFETIME GUARANTEE” OF PRODUCT LIFE OR THE LIFETIME OF THE PERSON

HOW THEY WILL SETTLE THE CLAIM IDENTITY OF WHO IS THE GUARANTOR

Full or Limited Warranty ($10 or more) Full warranty-ONE IN WHICH A DEFECTIVE

PRODUCT WILL BE FIXED OR REPLACED FREE WITHIN A REASONABLE TIME AFTER THE COMPLAINT HAS BEEN MADE ABOUT IT.

THE CONSUMER DOESN’T HAVE TO ANYTHING UNREASONABLE- SHIP HEAVY PRODUCTS BACK TO THE FACTORY

GOOD NO MATTER WHO OWNS IT IF IT CAN’T BE FIXED- NEW ONE OR MONEY

BACK

Limited warranty- A WARRANTY THAT PROVIDES RESTRICTED PROTECTION

MUST BE LABELED WHEN YOU SEE THIS ON A LABEL IT’S

A GOOD IDEA TO READ THE WARRANTY

Magnuson-Moss Warranty Act- $15 or over the warranty must be:

AVAILABLE FOR THE CUSTOMER TO READ

FULLY DISCLOSED IN SIMPLE, EASILY UNDERSTANDABLE LANGUAGE AND TERMS AND CONDITIONS OF THE WARRANTY

Example 7

Implied warranty- GUARANTEE OF QUALITY IMPOSED BY LAW

NOT IN WRITING ONLY WITH A SALE OF GOODS

There are two principal types of implied warranties:

WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE

WARRANTY OF MERCHANTABILITY

Warranty of Fitness for a particular purpose- THE SELLER GUARANTEES THAT GOODS ARE SUITABLE AND FIT FOR THE PURPOSE FOR THE BUYERS NEEDS

THE SELLER ADVISES THE BUYER AND THE BUYER RELIES ON THAT RECOMMENDATION

Example 8

Warranty of Merchantability- IMPLIED WARRANTY THAT MAKES MERCHANT OR SELLER LIABLE FOR GOODS THAT ARE NOT FAIR OR AVERAGE QUALITY AND FIT FOR ORDINARY PURPOSES FOR WHICH SUCH GOODS ARE USED

To be merchantable, goods must be: PASS WITHOUT OBJECTION IN THE TRADE BE FIT FOR ORDINARY PURPOSE ADEQUATELY CONTAINED, PACKAGED, AND

LABELED CONFORM TO THE PROMISE

ONLY GIVEN BY A MERCHANT Example 9 NEW OR USED GOODS Example 10

Usage of trade- COMMON PRACTICE- WHEN SELLING A PUREBREAD DOG: THE ANIMAL IS ACCOMPANIED BY PAPERS

Warranty of title- SELLER WARRANTS THAT THE TITLE IS GOOD AND DELIVERED FREE OF ANY FINANCIAL OBLIGATIONS

Example 11

Assignment

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