Isabella Carter
The topic of whether possible misuse constitutes a waiver of implied warranties is a complex one, with varying laws and interpretations across different jurisdictions. In general, an implied warranty refers to a type of guarantee that the law infers to exist as part of a contract or sale of goods, unless expressly excluded. One common example is the implied warranty of merchantability, which asserts that goods sold by a merchant are fit for the purpose intended and meet reasonable expectations of quality. While this can be a strong defence in certain cases, it may also create unexpected liability if not properly addressed. The effectiveness of a waiver of implied warranties depends on factors such as the specific jurisdiction, the language and presentation of the disclaimer, and the conduct of the dealer or seller.
Characteristics and Values
| Characteristics | Values |
|---|---|
| Implied warranties | Implied warranty of merchantability, implied warranty of fitness |
| Requirements to exclude the implied warranty of merchantability | Written contract with a conspicuous disclaimer that either expressly identifies "merchantability" or includes an expression stating that the goods are sold "as is" or "with all faults" |
| Conspicuous disclaimer | Written, displayed, or presented in a way that a reasonable person should have noticed; may depend on heading, font, color, or style of the provision |
| Jurisdictions | Different jurisdictions have different standards for determining the effectiveness of a disclaimer; some require larger or differing font or color, while others allow bolding, italicizing, or indenting |
| Buyer's experience | Considered by some jurisdictions in determining whether an exclusion of the warranty of merchantability is conspicuous |
| State law | Most states simplify the process by allowing dealers to disclaim implied warranties of merchantability and fitness for a particular purpose by using specific language |
| Federal law | Prohibits dealers from disclaiming implied warranties if a service contract is offered within 90 days of the sale or a written warranty is provided |
| Dealer's conduct | A disclaimer of implied warranties may be rendered ineffective by the dealer's conduct, such as fraudulent representation |
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What You'll Learn
Implied warranty of merchantability
An implied warranty of merchantability is a type of warranty defined in U.C.C. § 2-314. U.C.C. § 2-314(1) states that a warranty of merchantability is implied in a contract for the sale of goods if the seller is a merchant of these goods, unless explicitly excluded or modified. In other words, if the seller deals in a particular type of good or holds themselves out as having knowledge or skill about the goods, it is implied that they promise the good is fit for its ordinary purposes with each sale. This warranty operates independently of the seller's actions or statements. However, if the buyer has examined the goods or a sample as fully as desired or refused to examine them, there is no implied warranty regarding defects that should have been discovered.
For example, in Webster v. Blue Ship Tea Room, 347 Mass. 421 (1964), the plaintiff was injured after consuming a piece of bone in fish chowder. The court ruled that the plaintiff waived the implied warranty of merchantability, given their voluntary purchase and familiarity with fish chowder, and the natural expectation of finding fish bones in such a dish.
The Magnuson-Moss Warranty Act is the federal law governing warranties on consumer products in the United States. The Federal Trade Commission (FTC) works to prevent deceptive and unfair business practices and provides resources to help consumers identify and avoid them. While the FTC provides guidance on federal law, state laws may vary, and specific state law information may be necessary for certain business contexts.
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Exclusion of implied warranties
The exclusion of implied warranties is a crucial aspect of warranty law, and it involves preventing customers from relying on unstated guarantees. This is achieved by explicitly stating that there are no implied warranties or by using phrases that commonly indicate the absence of such warranties. For instance, the description "as is" or "with all faults" can be used to exclude implied warranties effectively.
In the context of product sales, implied warranties can be excluded by the seller's explicit statements or by the buyer's actions. If a buyer examines or refuses to examine a product before purchase, they cannot later claim an implied warranty regarding defects that an inspection would have revealed. This is because the purpose of excluding implied warranties is to prevent customers from being surprised by unbargained-for language or hidden issues with the product.
To exclude or modify implied warranties effectively, specific requirements must be met. For instance, under the Uniform Commercial Code (UCC), to exclude or modify the implied warranty of merchantability, the language used must mention "merchantability," and the exclusion must be conspicuous, whether written or not. On the other hand, to exclude or modify any implied warranty of fitness, the exclusion must be in writing and conspicuous.
It is worth noting that the Magnuson-Moss Act, which governs warranties on consumer products, allows sellers to limit or exclude implied warranties within its constraints. However, due to variations in state law, it is advisable to consult a private attorney or the relevant state's attorney general's office for specific information. Additionally, any limitations on the duration of implied warranties must be stated, and the warranty must include a disclaimer that these limitations may not apply in all states.
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Express warranties
An express warranty is an agreement by a seller or manufacturer to provide repairs or a replacement for a faulty product, component, or service within a specified time period after it was purchased. It is a guarantee that a product will live up to the promises made by the seller.
Under the Magnuson-Moss Warranty Act, passed by the US Congress in 1975, companies providing written express warranties must adhere to federal guidelines. This means that if a company does not honour its written warranty, consumers are protected by the Act. It is important to note that not all statements made by sellers constitute an express warranty. For instance, exaggerated claims in advertisements do not necessarily fall under warranty law unless specifically stated.
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Written contracts
One of the most common types of implied warranties is the warranty of merchantability, which applies to all sales of goods by a "merchant". This warranty implies that the goods are fit for their ordinary purpose and meet the standards of similar goods in the trade. For example, a batch of T-shirts is expected to have a certain number of properly stitched items, and a polymer is expected to have a certain tensile strength.
To exclude or disclaim the implied warranty of merchantability in a written contract, the contract must contain a conspicuous disclaimer. This means that the disclaimer must be written, displayed, or presented in a way that a reasonable person should notice it. The term "merchantability" must be expressly identified, or the disclaimer must include a statement that the goods are sold "as is" or "with all faults". This is governed by Section 2-316 of the Uniform Commercial Code (UCC), which has been adopted by all 50 states except Louisiana.
However, it is important to note that the interpretation of these rules can vary between different jurisdictions. Some jurisdictions may require the disclaimer to be in a larger or different font or colour, while others may allow for bolding, italicizing, or indenting. The buyer's experience and level of sophistication may also be considered in determining whether the disclaimer was conspicuous enough.
Another example of an implied warranty is the warranty of habitability, which applies to residential leases. This warranty implies that the landlord is obligated to maintain the property to be suitable for residential use, meeting minimal living requirements and not substantially threatening the tenant's health and safety. This warranty generally cannot be waived by the tenant, either explicitly or by taking possession of the property with knowledge of the conditions. If the warranty is breached, the tenant has several options, including moving out and terminating the lease, remedying the defect at the landlord's cost, or suing the landlord for money damages.
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Fraudulent conduct
In the context of implied warranties, fraudulent conduct refers to a dealer or seller's intentional misrepresentation or concealment of material facts about a product or service. This can include making false statements, providing misleading information, or failing to disclose known defects or issues.
For example, in the case of *Sorchaga v. Ride Auto, LLC* (2017), the Court of Appeals of Minnesota found that Ride Auto engaged in fraudulent conduct by failing to disclose known engine problems with a truck sold to Esmeralda Sorchaga. During the test drive, the truck smoked, and the check-engine light was on. Ride Auto's salesperson attributed the smoking to the truck being a diesel vehicle and the check-engine light to a faulty oxygen sensor, assuring Sorchaga that it was a minor issue. However, within days of the purchase, the truck continued to smoke and lacked power. The court ruled that Ride Auto's failure to disclose the engine problems and its misleading representations about the truck's condition constituted fraud.
To effectively disclaim the implied warranty of merchantability, sellers must ensure that their disclaimers are clear, conspicuous, and comply with the specific requirements of their jurisdiction. This may include using specific language, such as "as is" or "with all faults," and presenting the disclaimer in a way that a reasonable person should notice, such as through the use of distinct formatting or language.
However, even with proper disclaimers, fraudulent conduct can render them ineffective. In the case of *Sorchaga v. Ride Auto, LLC*, Ride Auto's fraudulent conduct precluded them from effectively disclaiming the implied warranties, and they were held liable for breach of the implied warranty of merchantability.
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Frequently asked questions
The implied warranty of merchantability applies to all sales of goods by a "merchant" with respect to the goods. In such sales, the seller impliedly warrants that the goods are "merchantable".
The written contract must contain a conspicuous disclaimer that either:
- Expressly identifies "merchantability"
- Includes an expression stating that the goods are sold "as is" or "with all faults".
A disclaimer is conspicuous if it is written, displayed, or presented in such a way that a reasonable person should have noticed. For instance, some jurisdictions require provisions excluding the implied warranty of merchantability to be printed in a larger or differing font or color.
An implied warranty disclaimer may be ineffective if the state prohibits dealers from disclaiming implied warranties, the dealer offers a service contract within 90 days of the sale, or the dealer engages in fraudulent conduct.
