19.1 b a c kn e x t h o m e Chapter 19 Objectives  Define a warranty, and distinguish between express and implied warranties.  Specify the warranties that apply to all sellers and those that apply only to merchants.  Explain how warranties may be excluded or surrendered.  Explain the various means the law uses to provide consumer protection. © 2002 West Educational PublishingTo accompany Law for Business, 14e, by Ashcroft and Ashcroft

19.2 b a c kn e x t h o m e Warranties  A warranty is an assurance that an article will conform to a certain standard.  A warranty made at the time of sale is considered to be part of the contract and is binding.  A warranty after a sale has been completed is binding even though not supported by any consideration.

19.3 b a c kn e x t h o m e Types of Warranties  An express warranty specifically spells out the terms of a warranty orally or in writing.  Seller’s opinion does not constitute an express warranty.  An implied warranty is not made by the manufacturer but is imposed by law.

19.4 b a c kn e x t h o m e Full or Limited Warranties  A full warranty must remedy any defects in a product during a reasonable time.  Full warranties are not restricted to certain parts, labor, time periods, etc.  Limited warranties are all other warranties for consumer products.

19.5 b a c kn e x t h o m e Warranties of all Sellers Warranty of title Warranty of title Warranty of conformity to description, sample, model Warranty of conformity to description, sample, model Warranty against encumbrances Warranty against encumbrances Warranty of fitness for a particular purpose Warranty of fitness for a particular purpose

19.6 b a c kn e x t h o m e More Warranties Warranty against infringement Warranty of merchantability or fitness for normal use Sale of article with patent or trade name Sale of food or drink Sale of secondhand or used goods Leased goods

19.7 b a c kn e x t h o m e Exclusion and Surrender  Warranties may be excluded or modified by agreement of the parties.  Some situations include  Particular provisions  Examination by the buyer  Dealings and customs  Caveat emptor

19.8 b a c kn e x t h o m e Product Liability  Explain the concept of privity of contract and how it affects warranties.  What does the Magnuson-Moss Warranty Act address?  If repairs take an unreasonable amount of time, may the consumer recover any expenses?  What do you think would be an “unreasonable” amount of time? Let’s Discuss Let’s Discuss Let’s Discuss Let’s Discuss Let’s Discuss Let’s Discuss Let’s Discuss Let’s Discuss

19.9 b a c kn e x t h o m e Consumer Protection Explain each of the following and identify the Federal Act associated with it. Quick Quiz Quick Quiz Quick Quiz Quick Quiz Quick Quiz Quick Quiz Quick Quiz Quick Quiz  Product safety  Truth in advertising  Product uniformity  Usury laws  Truth in lending  Statutes prohibiting unconscionable contracts  Fair credit reporting