Chapter 18

Defective Products

What are Express and Implied Warranties?

• Warranty -A statement about the product’s qualities or performance that the seller assures the buyer is true.

• Express Warranty -An assurance of quality or promise of performance explicitly made by the seller.

• Full Warranty -An express warranty that obligates the seller to repair or to replace a defective product without cost to the buyer and within reasonable time.

• Limited Warranty -Any warranty that provides less protection that a full warranty.

• Implied Warranty -An implicit, unstated warranty obligation imposed on all sellers in order to ensure minimal standards of contractual performance.

What are 9 things seller are supposed to make available to a consumer when they buy products?

• To whom the warranty is extended.• A description of the product and any excluded parts.• What the warrantor will and will not so in the event of a

breach of warranty.• When the warranty begins and when it ends.• The step-by-step procedure to follow to obtain performance

of warranty obligations.• The availability of any informal methods of settling disputes.• Any Limitation on how long implied warranties last.• Any exclusion or limitation on how incidental or consequential

damages.• The word “This warranty give you specific legal rights, and

you may also have other rights which vary from state to state.

Are Sellers’ Claims Always Warranties?

• Puffing -Exaggerated sales talk.

• What is meant by: “Caveat Emptor”?

• Caveat Emptor -Let the buyer beware.• Caveat Venditor -Let the seller beware.• Good Faith -Honesty in business conduct and

transactions.

What Warranties Are Implied By Law In All Sales?

• Warranty of Title• Warranty Against Encumbrances

– Encumbrances -claims of third party

• Warranty of a Fitness for a Particular Purpose– A) personally selects the goods – B) orders the goods according to the buyer’s

own specifications– C) does not rely on the skill and judgement of

the seller, because of independent testing or for other reasons

What Express Warranties Can Be Made By All Sellers?

• Warranty of Conformity to seller’s statement or promise

• Warranty of Conformity to Description, sample, or model

When and How May Warranties Be Excluded?

• Refrain form making any express warranties.

• use appropriate language that will exclude implied warranties.

What Additional Warranties Are Implied By Law For Merchants Only?

• Warranty Against Infringement• Warranty of Merchantability

– Warranty of Merchantability -the requirement that goods are fit for the ordinary purposes for which such goods are used.

– Disclaimer -notice of exclusion

What Is Product Liability?

• Privity of contract -relationship or connection that exists only between or among the contracting parties as a result of their legally binding agreement

• Product Liability -Responsibility for injury caused by a defective product, based on warranty, fraud, negligence, or strict liability