BUSINESS LAW
AND ETHICS
Chapter 19
WARRANTIES
 EXPRESS WARRANTY
 The statement of the seller in which the article
sold Is warranted or guaranteed is known as an
Express Warranty
IMPLIED WARRANTY
 An implied warrantee is one that the seller did not
make but that is imposed by the law
WARRANTY OF TITLE

The seller is confirming ownership of
the goods and that ownership is being
transferred to the buyer.
PRIVITY OF CONTRACT
 A contract relationship
How it applies to “Breach of Warranty”
A stranger can (one who does not have a
contractual relationship) sue on the theory of
Breach of Warranty.
MANUSON-MOSS
WARRANTY & FRC
IMPROVEMENT ACT

This act requires that
The consumer must be
written warranties for
informed of the warranty
consumer goods must
prior to the sale.
meet certain
requirements.
TO PROVE BREACH OF
WARRANTY

Only the facts of when the plaintiff has
direct knowledge, or about which
information can readily be learned, need
to be proven.
QUESTION #1
 Why is it important that the buyer examine the
product before signing the contract?
 Answer pg.
: No implied warranty exists with
respect to defects in goods that an examination
should have revealed before making the final
contract.
QUESTION #2

What is the relationship of Privity of Contracts?
 Answer pg. 217: In the past, in common law there could
be no suit for Breach of Warranty unless a Privity of Contract
existed between the plaintiff and the defendant. However a
“stranger” (one who does not have a contractual relationship
can sue on the Theory of Breach of Warranty.
QUESTION #3

What is Consumer Protection?
Answer pg. 220: Laws designed to protect
the parties to a contract from abuse, sharp
dealing and fraud. They also strengthen
legitimate business interests.
QUESTION #4
 What is TILA?
 Answer pg. 222: The Federal
Truth in Lending Act.