UCC Warranties Flashcards
UCC Warranties
Warranty of Title
Under the UCC, all sellers of goods warrant that the title conveyed is good and free from any security interest or other lien.
UCC Warranties
Warranty Against Infringement
Under the UCC, if seller is merchant regularly dealing in goods of the kind, then seller warrants that the goods will be delivered free of the rightful claim of any third person by way of infringment UNLESS buyer furnishes specifications for the goods, then seller is held harmless.
* Infringment - intellectual property, etc.
UCC Warranties
Express Warranties
Under the UCC, if seller makes an affirmation of fact relating to the goods and the promise becomes part of the basis of the bargain, then an express warranty is created.
* Same happens for sample or model provided; statement of opinion does not rise to same degree
* BoP - upon seller to show express warrant was not basis of the bargain
* Subsequent - such a warranty can be made subsequent of the contract or sale; technically is a modification of K but UCC allows without consideration
* Exclusion - may negate so long as not unreasonable
UCC Warranties
Implied Warranty of Merchantability
Under the UCC, if seller is a merhcant with resepct to goods of that kind, then warranty that goods are merchantable is implied.
* Merchantable - goods must pass without objection in the trade under the k description; be of fair, average quality within description; be fit for ordinary purposes; be adequately contained and packaged, etc etc.
* Strict Liability & Waiver - seller is held strictly liable unless buyer examined the goods fully (or refused to examine at all) then there is no implied warranty with respect to defects that would have been revealed.
* Exclusion - may exclude orally; if in writing, must be conspicuous and use language such as “as is, with all faults”
UCC Warranties
Implied Warranty for a Particular Purpose
Under the UCC, if seller has a reason to know from any source that the goods will be used for a particular purpose, and that buyer is relying on seller’s skill or judgment to select suitable goods, then there is an implied warranty for that purpose.
* Exclusion - may only be excluded via writing and must be conspicous; “there are no warranties that extend beyond the description on the face hereof” is sufficient” or “as is, with all fault” etc.
UCC Warranties
Exclusion
- Unconscionability - UCC does not specifically provide for unconscionability but some courts have held it does
UCC Warranties
Limitation of Damages
- Consequential - conseq damages for breach (including breach of warranty) may be limited or excluded unless unconscionable UNLESS limit of damages for injury to consumer of good (prima facie unconscionable).
- Liquidated - permited at an amount that is reaonable in light of anticipated or actual harm of breach, difficulties of proof of loss, and inconvenience of an adequate remedy.
UCC Warranties
Third Party Rights
Most states limit causes of action regarding breach of warranty to against the buyer’s immediate seller.
UCC Warranties
Strict Liability
Most states hold manufacturers, distributors, and retail sellers stricly liable for personal injuries or property damage caused by defective products.
