Section 14.1
Express and Implied Warranties
Section 14.1 Express and Implied
Warranties
Pre-Learning Question
What is a warranty?
Understanding Business and Personal Law
The Importance of Warranties
Section 14.1 Express and Implied
Warranties
Law of Warranties
The UCC provides protection under its
law of warranties for situations such as:
products that don’t work after you buy
them
impurities in foods in restaurants
technical problems with computers
Understanding Business and Personal Law
The Importance of Warranties
Section 14.1 Express and Implied
Warranties
Law of Warranties
A warranty is another name for a
guarantee.
A breach of warranty is a breach of
contract.
Understanding Business and Personal Law
The Importance of Warranties
Section 14.1 Express and Implied
Warranties
Express Warranties
An express warranty is an oral or
written statement, promise or other
representation about the quality,
ability, or performance of a product.
Express warranties apply to goods
that are sold or leased.
Understanding Business and Personal Law
The Importance of Warranties
Section 14.1 Express and Implied
Warranties
Express Warranties
Express warranties are conveyed in
three ways.
1. By a statement of fact or promise
made by the seller
2. By a description of the goods
3. By the use of a sample or model
Understanding Business and Personal Law
The Importance of Warranties
Section 14.1 Express and Implied
Warranties
Statement of Fact or Promise
An express warranty is created when
a private party or a merchant sells
goods and makes a statement of fact
or a promise about the goods to the
buyer.
Understanding Business and Personal Law
The Importance of Warranties
Section 14.1 Express and Implied
Warranties
Statement of Fact or Promise
An express warranty may be a
statement of fact or a promise of
something that may happen in the
future.
Express warranties are often found
in sales brochures, circulars, and
advertisements.
Understanding Business and Personal Law
The Importance of Warranties
Section 14.1 Express and Implied
Warranties
Availability before Sale
Written warranties on consumer
products costing more than $15 must
be made available before you buy the
product.
Understanding Business and Personal Law
The Importance of Warranties
Section 14.1 Express and Implied
Warranties
Advertising Express Warranties
An advertisement stating that a
product is warranted must tell you how
to get a copy of the warranty before
you buy the product.
Understanding Business and Personal Law
The Importance of Warranties
Section 14.1 Express and Implied
Warranties
Magnuson-Moss Warranty Act
The Magnuson-Moss Warranty Act is
a law affecting only the sale of goods
sold in interstate commerce (business
activities that touch more than one
state).
Understanding Business and Personal Law
The Importance of Warranties
Section 14.1 Express and Implied
Warranties
Magnuson-Moss Warranty Act
This federal act gives added
protection to consumers when written
express warranties are made.
Understanding Business and Personal Law
The Importance of Warranties
Section 14.1 Express and Implied
Warranties
Magnuson-Moss Warranty Act
When a written warranty is offered on
consumer goods costing more that
$10 and sold in interstate commerce,
the warranty must be labeled as full or
limited.
Understanding Business and Personal Law
The Importance of Warranties
Section 14.1 Express and Implied
Warranties
Full Warranty
A full warranty promises to fix or
replace a defective product at no
charge to the consumer.
Understanding Business and Personal Law
The Importance of Warranties
Section 14.1 Express and Implied
Warranties
Full Warranty
A full warranty:
must be honored within a
reasonable amount of time.
is good for the period mentioned in
the warranty, regardless of who
owns the item when it breaks.
Understanding Business and Personal Law
The Importance of Warranties
Section 14.1 Express and Implied
Warranties
Limited Warranty
A limited warranty is any written
warranty that does not meet the
requirements for a full warranty.
Understanding Business and Personal Law
The Importance of Warranties
Section 14.1 Express and Implied
Warranties
Limited Warranty
A limited warranty:
does not promise free repair or
replacement
commonly covers only parts, not
labor
may offer a partial refund
Understanding Business and Personal Law
The Importance of Warranties
Section 14.1 Express and Implied
Warranties
Limited Warranty
A limited warranty:
may require you to pay shipping
may only apply to the original buyer
must be labeled “limited warranty”
Understanding Business and Personal Law
The Importance of Warranties
Section 14.1 Express and Implied
Warranties
Description of the Goods
Any description of the goods that is
part of a transaction also creates an
express warranty.
The seller warrants that the goods will
be the same as the description.
Understanding Business and Personal Law
The Importance of Warranties
Section 14.1 Express and Implied
Warranties
Sample or Model
Any sample or model that is part of a
transaction creates an express
warranty.
When displaying a sample or model,
the seller warrants that the goods sold
will be the same.
Understanding Business and Personal Law
The Importance of Warranties
Section 14.1 Express and Implied
Warranties
Implied Warranties
An implied warranty is a guarantee of
quality imposed by law.
Understanding Business and Personal Law
The Importance of Warranties
Section 14.1 Express and Implied
Warranties
Implied Warranties
An implied warranty:
is not in writing
applies only to goods that are sold,
not services contracted
Understanding Business and Personal Law
The Importance of Warranties
Section 14.1 Express and Implied
Warranties
Implied Warranties
There are three types of implied
warranties:
1. warranty of fitness for a particular
purpose
2. warranty of merchantability
3. warranty that comes from a course
of dealing or usage of trade
Understanding Business and Personal Law
The Importance of Warranties
Section 14.1 Express and Implied
Warranties
What is the difference between an
express and an implied warranty?
Understanding Business and Personal Law
The Importance of Warranties
Section 14.1 Express and Implied
Warranties
ANSWER
Express: provided by the seller;
Implied: imposed by law.
Understanding Business and Personal Law
The Importance of Warranties
Section 14.1 Express and Implied
Warranties
Warranty of Fitness
for a Particular Purpose
A warranty of fitness for a particular
purpose is created when the seller
knows the purpose for which the
goods are needed.
Understanding Business and Personal Law
The Importance of Warranties
Section 14.1 Express and Implied
Warranties
Warranty of Fitness
for a Particular Purpose
The seller advises the buyer in making
a purchase, and the buyer relies on
the seller’s knowledge and advice.
Understanding Business and Personal Law
The Importance of Warranties
Section 14.1 Express and Implied
Warranties
Warranty of Fitness
for a Particular Purpose
In this way the seller warrants by
implication that the goods will be fit for
the purpose for which they are to be
used.
Understanding Business and Personal Law
The Importance of Warranties
Section 14.1 Express and Implied
Warranties
Warranty of Fitness
for a Particular Purpose
This warranty exists whether the seller
is a merchant or a private party.
Understanding Business and Personal Law
The Importance of Warranties
Section 14.1 Express and Implied
Warranties
Warranty of Merchantability
Under an implied warranty of
merchantability the merchant
warrants that the goods being sold are
merchantable.
Understanding Business and Personal Law
The Importance of Warranties
Section 14.1 Express and Implied
Warranties
Warranty of Merchantability
This warranty is given only when the
seller regularly sells goods of that
kind.
Unless disclaimed, retailers,
wholesalers, and manufacturers imply
such a warranty in every sale.
Understanding Business and Personal Law
The Importance of Warranties
Section 14.1 Express and Implied
Warranties
Warranty of Merchantability
This gives assurance that their
products are fit for the purpose for
which they are purchased.
Understanding Business and Personal Law
The Importance of Warranties
Section 14.1 Express and Implied
Warranties
Warranty of Merchantability
Private parties do not provide the
warranty of merchantability.
Understanding Business and Personal Law
The Importance of Warranties
Section 14.1 Express and Implied
Warranties
Usage of Trade
Another implied warranty arises from
the customary ways in which the
parties have dealt in the past, or
usage of trade.
Understanding Business and Personal Law
The Importance of Warranties
Section 14.1 Express and Implied
Warranties
Warranty of Title
When a merchant or a private party
sells goods, the seller warrants that
the title being conveyed is good and
that the transfer is lawful.
This is called the warranty of title.
Understanding Business and Personal Law
The Importance of Warranties
Section 14.1 Express and Implied
Warranties
Section 14.1 Assessment
Reviewing What You Learned
1. What are the three ways an express
warranty can be made?
Understanding Business and Personal Law
The Importance of Warranties
Section 14.1 Express and Implied
Warranties
Section 14.1 Assessment
Reviewing What You Learned
Answer
By a statement of fact or promise made by
the seller, by a description of the goods,
and by the use of a sample or model.
Understanding Business and Personal Law
The Importance of Warranties
Section 14.1 Express and Implied
Warranties
Section 14.1 Assessment
Reviewing What You Learned
2. What are the obligations of
merchants under the MagnusonMoss Warranty Act?
Understanding Business and Personal Law
The Importance of Warranties
Section 14.1 Express and Implied
Warranties
Section 14.1 Assessment
Reviewing What You Learned
Answer
Merchants must label written warranties as
either “full” or “limited” for consumer
products costing more than $10.
Understanding Business and Personal Law
The Importance of Warranties
Section 14.1 Express and Implied
Warranties
Section 14.1 Assessment
Reviewing What You Learned
3. What is difference between a limited
warranty and a full warranty?
Understanding Business and Personal Law
The Importance of Warranties
Section 14.1 Express and Implied
Warranties
Section 14.1 Assessment
Reviewing What You Learned
Answer
A limited warranty is one that does not
meet all of the requirements for a full
warranty.
Understanding Business and Personal Law
The Importance of Warranties
Section 14.1 Express and Implied
Warranties
Section 14.1 Assessment
Reviewing What You Learned
4. What is the difference between the
implied warranty of fitness for a
particular purpose and the implied
warranty of merchantability?
Understanding Business and Personal Law
The Importance of Warranties
Section 14.1 Express and Implied
Warranties
Section 14.1 Assessment
Reviewing What You Learned
Answer
A warranty of fitness for a particular
purpose is created when the seller knows
about a particular purpose for which the
goods are needed.
Understanding Business and Personal Law
The Importance of Warranties
Section 14.1 Express and Implied
Warranties
Section 14.1 Assessment
Reviewing What You Learned
Answer
The seller advises the buyer in making a
purchase and the buyer relies on the
seller’s advice. This warranty exists
whether the seller is a merchant or a
private party.
Understanding Business and Personal Law
The Importance of Warranties
Section 14.1 Express and Implied
Warranties
Section 14.1 Assessment
Reviewing What You Learned
Answer
In contrast, sellers who regularly sell goods
of a particular kind imply a warranty of
merchantability in every sale, assuring that
their products are fit for the purpose for
which they are purchased.
Understanding Business and Personal Law
The Importance of Warranties
Section 14.1 Express and Implied
Warranties
Section 14.1 Assessment
Reviewing What You Learned
Answer
Private parties do not provide the warranty
of merchantability.
Understanding Business and Personal Law
The Importance of Warranties
Section 14.1 Express and Implied
Warranties
Section 14.1 Assessment
Reviewing What You Learned
5. What is the warranty of title?
Understanding Business and Personal Law
The Importance of Warranties
Section 14.1 Express and Implied
Warranties
Section 14.1 Assessment
Reviewing What You Learned
Answer
Guarantees that the title being conveyed is
good, and the transfer is lawful.
Understanding Business and Personal Law
The Importance of Warranties
End of Section 14.1
Express and Implied Warranties