Chapter 14

WARRANTIES

ChapterScope

This chapter covers provisions of the UCC that govern certain express and implied guarantees made by a seller of goods to a buyer, called “warranties.” Key concepts:

• Express warranties: A seller will be found to make an express warranty if she makes an explicit promise that the goods will have certain qualities. Such a warranty can take the form of: (1) an affirmation of fact or promise; (2) a description of the goods; or (3) a sample or model upon which the buyer relies.
• Implied warranty of merchantability: A merchant is normally held to make an implied warranty of merchantability as to the goods she sells, that is, an implied promise that the goods are “fit for the ordinary purposes for which such goods are used.”
  • Disclaimer: This warranty may be disclaimed. However, the disclaimer must mention the word “merchantability.” Also, if the disclaimer is in writing, the disclaimer must be conspicuous.
• Implied warranty of fitness for a particular purpose: A merchant may be held to have made an implied warranty that the goods she sells are fit for a particular purpose. This will happen where these conditions are all met:

[1] the merchant has reason to know of the buyer’s purpose for purchasing the goods,

[2] the merchant has reason to know that the buyer was relying on the seller’s skill or judgment to furnish suitable goods; and

[3] the buyer did rely on the seller’s skill or judgment.

Disclaimer: An express disclaimer of this warranty must be in writing and conspicuous.

• Implied limitations on implied warranties: Implied warranties may be excluded or disclaimed by the seller’s use of expressions like “as is.” Implied warranties will not be held to exist with regard to defects which should have been revealed upon examination by the buyer.