Prepared by Leng kimhok Chapter 8: WARRANTIES What is Warranty ? It is a contractual promise by seller regarding the quality, character or suitability of the goods that he has sold. There are two kinds of warranties: Express warranties Implied warranties Express warranties: The warranties that is explicitly provided in the contract. The seller can communicate to the buyer a warranty by: Statement of fact: The seller promises to the buyer about the fact of goods. Sample: The seller shows the buyer the sample of goods on demonstration. Writing: The seller writes in the contract about the his warranties. Contract § 12/28/2018 Prepared by Leng kimhok

Prepared by Leng kimhok N.U.M. COT Implied warranty A warranty are implicitly held to be part of contract (warranties are imposed by law). There are two kinds: Warranty of title Warranty of fitness 1- Warranty of title: The seller warrants that he or she is the rightful owner of the goods and can transfer that ownership interest to the buyer freely. The imply warranties of title in sale contract under D#38 Art 39: requires the seller to inform the buyer of all “substantial conditions relating to the sale item, particularly information concerning rights that others have in the item.” Art 43: the seller is required to “guarantee the purchaser protection from any action by a third party” claiming a right to the goods. Art 44: in the event of a third party threatening to sue the buyer over the ownership of the goods, the buyer can refer the third party to the seller, who must either prevent the third arty from suing the buyer or go to court to defend the buyer’s right to the goods. 12/28/2018 Prepared by Leng kimhok Prepared by Leng kimhok

Prepared by Leng kimhok 2- Warranty of fitness is a warranty that the goods are “of merchantable quality” and “reasonably fit for the purpose for which the seller knows the goods are being bought.” Most laws governing the sale of goods have an implied warranty of fitness. D#38 does not contain an implied warranty of fitness but providing a remedy for hidden defects. The conditions are: Normally used / operation: The seller may know the buyer’s particular purpose and The buyer is relying on the seller to select the goods. Except: In some jurisdictions, the seller could sells a good “AS IS” meaning that the seller does not warrant that the goods are free of any defects. In Cambodia is not clear. 12/28/2018 Prepared by Leng kimhok

Prepared by Leng kimhok Latent defects (Art.42 of D#38 provides that a seller is “not responsible for any defects perceivable from outside, but shall be liable for latent defects in existence prior to the sale. if the purchaser can prove that such defect existed prior to the sale, then the purchaser can ask to rescind the K or to reduce the price.”) Warranty under the CISG Like the D#38, CISG also implies certain warranties: Art.35: the seller must deliver the goods free from any right or claim of a third party. Under Art.35-40 the seller must ensure that the goods are fit for the purpose for which the purchaser indicated that they are to be used. (warranty of fitness) 12/28/2018 Prepared by Leng kimhok