Notice of Breach of Warranty (Sales) Flashcards
If the buyer accepted the goods and then later wants to sue for breach of warranty, the buyer must
give the seller notice of the breach within a reasonable time after the buyer discovers or should have discovered the breach/defect, or the buyer is “barred from any remedy.” [UCC 2-607(a)]
A retail consumer is given more time to provide notice than a merchant buyer. (True/False)
True
The notice merely needs to
inform the seller that there was a breach (or perhaps alternatively only that the goods are “troublesome”)—either way, details are not required.
The notice need not include a threat of litigation or a claim for damages.
Policy Reasons for Requiring Notice:
Reason #1: This will give the seller an opportunity to cure.
Reason #2: This can start a dialogue or negotiation that may result in a settlement.
Reason #3: This will safeguard against stale claims.
The buyer has the burden to prove they provided notice within a reasonable time, and this is generally a question of [choose one: law/fact]
fact
3rd Party Plaintiffs: UCC 2-607(3)(a) only provides for the “buyer”
to give notice to the “seller,” but courts are divided on whether a 3rd party damaged by the goods (such as a family member or guest) must give notice. Similarly, courts are divided on whether the buyer must give notice to the manufacturer in order the sue the manufacturer for breach of warranty.
Ace American Ins. Co. v. Fountain Powerboats, Inc.
(total loss of boat)
A buyer must notify only his immediate seller of potential warranty claims for an allegedly defective product.
Hebron v. American Isuzu Motors, Inc.
The Uniform Commercial Code’s requirement to provide notice of a breach applies to sales to both merchants and retail consumers.
Maybank v. S.S. Kresge Co.
Notice given to a seller by a lay consumer may be found reasonable if it is given within the period of the statute of limitations and the delay does not frustrate the purposes of the notice requirement.
Peavey Electronics Corp. v. Baan U.S.A., Inc.
Notice of breach must inform the seller that the buyer considers the seller in breach of the contract if both parties are merchants under the Uniform Commercial Code.
Delano Growers’ Co-Op Winery v. Supreme Wine Co., Inc.
Oral notice of a breach may be sufficient if it indicates the problem and the specific goods in question.
Item #4: Whether notice was provided in a reasonable time is normally a question of [choose one: fact/law]
fact
Item #5: However, in Rachel Hebron v. American Isuzu Motors (casebook p. 195), the court granted Isuzu summary judgment, concluding that as a matter of [choose one: fact/law] the notice was not timely based on the following facts:
law
Fact #1: Consumer did not provide any notice to Isuzu for 25 months after discovery of the defect, and then the notice was simply filing a lawsuit against Isuzu.
Fact #2: By the time Isuzu had any notice, the customer had already disposed of the good (the truck), which put Isuzu at a great disadvantage in trying to defend.
Fact #3: The customer had no explanation for not notifying Isuzu sooner.
Fact #4: The customer took no pictures of the damaged truck, and the customer had no inspection performed on the damaged truck, again putting Isuzu at a great disadvantage in trying to defend
Note: In Rachel Hebron v. American Isuzu Motors, the opinion itself is unclear about whether the customer purchased the truck from a dealer, or directly from American Isuzu Motors. However, a “summary” at the beginning of the case refers to American Isuzu Motors as the “seller,” so perhaps the customer purchased directly from American Isuzu Motors.]
Does the Buyer’s obligation to provide notice of a breach of warranty apply only when the buyer is a merchant?
No
According to the leading UCC treatise (J.J. White & Summers), a note “on a piece of toilet paper will do.” (T/F)
T
