Chapter 18
Defective Products
What are Express and Implied
Warranties?
• Warranty -A statement about the product’s qualities or
performance that the seller assures the buyer is true.
• Express Warranty -An assurance of quality or promise of
performance explicitly made by the seller.
• Full Warranty -An express warranty that obligates the
seller to repair or to replace a defective product without
cost to the buyer and within reasonable time.
• Limited Warranty -Any warranty that provides less
protection that a full warranty.
• Implied Warranty -An implicit, unstated warranty
obligation imposed on all sellers in order to ensure minimal
standards of contractual performance.
What are 9 things seller are supposed to make
available to a consumer when they buy
products?
• To whom the warranty is extended.
• A description of the product and any excluded parts.
• What the warrantor will and will not so in the event of a breach of
warranty.
• When the warranty begins and when it ends.
• The step-by-step procedure to follow to obtain performance of
warranty obligations.
• The availability of any informal methods of settling disputes.
• Any Limitation on how long implied warranties last.
• Any exclusion or limitation on how incidental or consequential
damages.
• The word “This warranty give you specific legal rights, and you may
also have other rights which vary from state to state.
Are Sellers’ Claims Always
Warranties?
• Puffing -Exaggerated sales talk.
• What is meant by: “Caveat Emptor”?
• Caveat Emptor -Let the buyer beware.
• Caveat Venditor -Let the seller beware.
• Good Faith -Honesty in business conduct and
transactions.
What Warranties Are Implied By
Law In All Sales?
• Warranty of Title
• Warranty Against Encumbrances
– Encumbrances -claims of third party
• Warranty of a Fitness for a Particular Purpose
– A) personally selects the goods
– B) orders the goods according to the buyer’s own
specifications
– C) does not rely on the skill and judgement of the
seller, because of independent testing or for other
reasons
What Express Warranties Can Be
Made By All Sellers?
• Warranty of Conformity to seller’s
statement or promise
• Warranty of Conformity to Description,
sample, or model
When and How May Warranties
Be Excluded?
• Refrain form making any express
warranties.
• use appropriate language that will
exclude implied warranties.
What Additional Warranties Are Implied
By Law For Merchants Only?
• Warranty Against Infringement
• Warranty of Merchantability
– Warranty of Merchantability -the requirement
that goods are fit for the ordinary purposes for
which such goods are used.
– Disclaimer -notice of exclusion
What Is Product Liability?
• Privity of contract -relationship or
connection that exists only between or
among the contracting parties as a result of
their legally binding agreement
• Product Liability -Responsibility for injury
caused by a defective product, based on
warranty, fraud, negligence, or strict liability