1. Chapter 25 Warranties Chapter 25: Warranties
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2. Overview LO25-1: What are express warranties?
LO25-2: What is the implied warranty of title?
LO25-3: What is the implied warranty of merchantability?
LO25-4: What is the implied warranty of fitness for a particular purpose?
LO25-5: Do warranties apply to third parties?
LO25-6: Can warranties be disclaimed?

3. Chapter 25 Hypothetical Case 1
Last week, Richard Stamos purchased a used 2007 Honda Civic from his neighbor, Adam Lourdes. Yesterday, Stamos experienced mechanical difficulties with his new purchase, and his mechanic diagnosed an automatic transmission problem with a repair estimate of $2,150. Lourdes has refused to rescind the contract and has said he will not pay for the transmission repair.
Does the Uniform Commercial Code (UCC) or the common law provide any remedies, warranty or otherwise, for Richard Stamos in a lawsuit against Adam Lourdes for the failed transmission?
Chapter 25 Hypothetical Case: Last week, Richard Stamos purchased a used 2007 Honda Civic from his neighbor, Adam Lourdes. Yesterday, Stamos experienced mechanical difficulties with his new purchase, and his mechanic diagnosed an automatic transmission problem with a repair estimate of $2,150. Lourdes has refused to rescind the contract and has said he will not pay for the transmission repair.
Does the Uniform Commercial Code (UCC) or the common law provide any remedies, warranty or otherwise, for Richard Stamos in a lawsuit against Adam Lourdes for the failed transmission?
[Instructor: See Types of Warranties in Chapter 25]

4. Chapter 25 Hypothetical Case 2
Recall from the Chapter 16 Hypothetical Case that Imogen Ledbetter was seriously injured in an automobile accident when the steering wheel of a new car she had just purchased detached from the steering column (the steering wheel literally came off in her hands), causing Ledbetter to crash into a culvert.
In terms of drafting the personal injury complaint against Fjord Motors, Inc. (the manufacturer of the sedan) and Bjorn Fjord Motors, Inc. (the dealership), what theories of warranty liability should Ledbetter's attorney include? Are there any non-warranty (i.e., non-Uniform Commercial Code) theories of liability that might be applicable in this case?
Chapter 25 Hypothetical Case 2: Recall from the Chapter 16 Hypothetical Case that Imogen Ledbetter was seriously injured in an automobile accident when the steering wheel of a new car she had just purchased detached from the steering column (the steering wheel literally came off in her hands), causing Ledbetter to crash into a culvert.
In terms of drafting the personal injury complaint against Fjord Motors, Inc. (the manufacturer of the sedan) and Bjorn Fjord Motors, Inc. (the dealership), what theories of warranty liability should Ledbetter's attorney include? Are there any non-warranty (i.e., non-Uniform Commercial Code) theories of liability that might be applicable in this case?
[Instructor: See Types of Warranties in Chapter 25]

5. What Is a Warranty?
Definition: Assurance by one party that the other party can rely on its representations of fact
A warranty is an assurance by one party that the other party can rely on its representations of fact.

6. Express Warranty Versus Implied Warranty
Express warranty: Explicitly stated in contract
Implied warranty: Automatically (by operation of law) applied to contract
An express warranty is explicitly stated in the contract, while an implied warranty is automatically, by operation of law, applied to the contract.

7. Express Warranties
Any description of the good's physical nature or its use, either in general or specific, that becomes part of the contract
May be found in advertisements or brochures
May be material term of contract
Salesperson's oral promise concerning good can give rise to express warranty
Buyer's reliance on seller's representations generally means those representations become express warranties, and part of contract
An express warranty is a description of a good's physical nature or its use, either in general or specific, that becomes part of the contract. An express warranty may be a material term of a written contract, but it may also be found in an advertisement or a brochure. Further, a salesperson's oral promise concerning a good can give rise to an express warranty. A buyer's reliance on a seller's representations generally means those representations become express warranties, and part of the contract between the parties.

8. Sales Puffing
Definition: Salesperson's mere statement of opinion, rather than representation of facts
Puffing generally does not create express warranty liability
Sales puffery represents a salesperson's mere statement of opinion, rather than a representation of facts pertaining to the goods sold. Puffing generally does not create express warranty liability.

9. Implied Warranty of Title
Implied warranty of title assumes:
Seller has good and valid title to goods
Seller has right to transfer title free and clear of liens, judgments, or infringements of intellectual property rights of which buyer has no knowledge
An implied warranty assumes that the seller has good and valid title to the goods being sold, and has the right to transfer title free and clear of any liens, judgments, or infringements of intellectual property rights of which the buyer has no knowledge.

10. Implied Warranty of Merchantability
Implied warranty of merchantability: Warranty based on reasonable expectation of product performance
Good purchased must:
Pass without objection in trade/market for similar goods
Be of fair quality (within the product's description)
Be fit for ordinary use
Have even kind, quality, and quantity
Be adequately packaged and labeled
Conform to promises made on package/product label
Another type of implied warranty is the implied warranty of merchantability, a warranty based on reasonable expectations of product performance. In order to satisfy the implied warranty of merchantability, the good purchased must pass without objection in the market for similar goods; be of fair quality within the product's description; be fit for ordinary use; have even kind, quality, and quantity; be adequately packaged and labeled; and conform to promises made on the package or product label.

11. Implied Warranty of Fitness for Particular Purpose
Implied warranty of fitness for particular purpose: Warranty that arises when seller knows purpose for which buyer purchasing goods, and buyer relies on seller's judgment to recommend/select certain product
Seller does not have to be merchant to make this warranty
The implied warranty of fitness for a particular purpose arises when the seller knows the purpose for which the buyer is purchasing the goods, and the buyer relies on the seller's judgment to recommend a certain product. The seller does not have to be a merchant to make the implied warranty of fitness for a particular purpose.

12. Implied Warranty of Trade Usage
Definition: An assurance created through well-accepted course of dealing or trade usage
The implied warranty of trade usage is an assurance created through well-accepted course of dealing or trade usage.

13. Third Party Beneficiaries of Warranties
Seller's warranties may extend to:
Buyer's household members and guests
Any reasonable and foreseeable user
Anyone injured by good
A seller's warranties may extend to third party beneficiaries, including the buyer's household members and guests, any reasonable and foreseeable user, and anyone injured by the good.

14. Warranty Disclaimers and Waivers
Methods of disclaiming/waiving warranties:
Seller does not make express warranties
Seller disclaims implied warranties in clear, unambiguous, conspicuous language
Buyer fails/refuses to examine goods
Buyer fails to file suit within applicable statute of limitations period
There are several methods to waive or disclaim warranties, including the seller's refusal to make express warranties; the seller's disclaimer of implied warranties in clear, unambiguous, and conspicuous language; the buyer's failure or refusal to examine goods; and the buyer's failure to file suit within the applicable statute of limitations period.

15. Magnuson-Moss Warranty Act
Provides that if seller decides to issue written warranty for consumer good, seller must specify whether warranty is "full" or "limited"
The Magnuson-Moss Warranty Act provides that if a seller decides to issue a written warranty for a consumer good, the seller must specify whether the warranty is "full" or "limited."

16. Chapter 25 Hypothetical Case 3
Aristotle Mythos is having a mid-life crisis at 50. In an attempt to conquer his depression and prove that he is equivalent to a 20-year-old (at least in spirit), Mythos plans to climb Mount Zeus, the highest peak in his ancestral homeland of Greconia. In preparation for his climb, Mythos patronizes a local outdoors shop, Athena's Garden, and asks to speak with a trained sales associate. Mythos specifies that he will be climbing Mount Zeus, and that he will need a tent and sleeping bag that can survive the wind and elements for two nights during his ascent and descent. The associate selects a tent and sleeping bag from a wide variety of possibilities, and Mythos leaves the store a happy camper. Mythos begins his climb the following day and successfully reaches his checkpoint, halfway to Zeus's peak, before nightfall. He prepares his campsite and looks forward to some much-needed rest. Unfortunately, he has a fitful night, shivering in his sleeping bag in a partially collapsed tent, with the wind and the cold getting the best of Mythos and his camping gear.
Chapter 25 Hypothetical Case 3: Aristotle Mythos is having a mid-life crisis at 50. In an attempt to conquer his depression and prove that he is equivalent to a 20-year-old (at least in spirit), Mythos plans to climb Mount Zeus, the highest peak in his ancestral homeland of Greconia. In preparation for his climb, Mythos patronizes a local outdoors shop, Athena's Garden, and asks to speak with a trained sales associate. Mythos specifies that he will be climbing Mount Zeus, and that he will need a tent and sleeping bag that can survive the wind and elements for two nights during his ascent and descent. The associate selects a tent and sleeping bag from a wide variety of possibilities, and Mythos leaves the store a happy camper. Mythos begins his climb the following day and successfully reaches his checkpoint, halfway to Zeus's peak, before nightfall. He prepares his campsite and looks forward to some much-needed rest. Unfortunately, he has a fitful night, shivering in his sleeping bag in a partially collapsed tent, with the wind and the cold getting the best of Mythos and his camping gear.

17. Chapter 25 Hypothetical Case 3 (cont'd)
The following morning, Mythos awakens to see that the toes on both of his feet have turned a sickening shade of blue, and he realizes with great disappointment that he will not be able to fulfill his dream of climbing Mount Zeus. Upon closer examination of his tent and sleeping bag, he sees that both are labeled "The Young Mythologist"—gear clearly intended for children's backyard camping. As a result of his misfortune, Mythos must have four toes (two toes on each foot) amputated, and he incurs medical expenses of $58,000 for treatment and rehabilitation. Mythos's doctor has rated him with a 20% permanent partial disability as a result of his toe amputations.
Is Athena's Garden legally responsible for Mythos's medical expenses and partial disability? If so, on what theory?
Chapter 25 Hypothetical Case 3: The following morning, Mythos awakens to see that the toes on both of his feet have turned a sickening shade of blue, and he realizes with great disappointment that he will not be able to fulfill his dream of climbing Mount Zeus. Upon closer examination of his tent and sleeping bag, he sees that both are labeled "The Young Mythologist"—gear clearly intended for children's backyard camping. As a result of his misfortune, Mythos must have four toes (two toes on each foot) amputated, and he incurs medical expenses of $58,000 for treatment and rehabilitation. Mythos's doctor has rated him with a 20% permanent partial disability as a result of his toe amputations. Is Athena's Garden legally responsible for Mythos's medical expenses and partial disability? If so, on what theory?
[Instructor: See Types of Warranties in Chapter 25]

18. Chapter 25 Hypothetical Case 4
Sanford Ngobo decided to purchase a new car from Fortuna Motors. Ngobo enjoys closed-track racing on the weekends, so he was seeking a car that was better and faster than all the rest.
Before making his purchase, Ngobo browsed the cars for quite some time—but what really interested him were the recommendations of the sales clerk he worked with, Sophia Farrell. Farrell told Ngobo that the Satyr 1000, a new model the dealership had just gotten in, would guarantee Ngobo 's dominance in all the races in which he competed, as it had an extraordinarily powerful engine. Despite the fact that the Satyr was at least 30 percent more expensive than the other cars he'd considered, he decided that it was what he was looking for.
A month later (and after putting 2,000 miles on his new car), Ngobo took his new Satyr to the track—and came in dead last. Furious, he went back to Fortuna, and Farrell, and demanded his money back.
Should Fortuna take the Satyr back because it didn't live up to Farrell's promises? Is she guilty of puffing?
Chapter 25 Hypothetical Case 4: Sanford Ngobo decided to purchase a new car from Fortuna Motors. Ngobo enjoys closed-track racing on the weekends, so he was seeking a car that was better and faster than all the rest.
Before making his purchase, Ngobo browsed the cars for quite some time—but what really interested him were the recommendations of the sales clerk he worked with, Sophia Farrell. Farrell told Ngobo that the Satyr 1000, a new model the dealership had just gotten in, would guarantee Ngobo 's dominance in all the races in which he competed. Despite the fact that the Satyr was at least 30 percent more expensive than the other cars he'd considered, he decided that it was what he was looking for.
A month later (and after putting 2,000 miles on his new car), Ngobo took his new Satyr to the track—and came in dead last. Furious, he went back to Fortuna, and Farrell, and demanded his money back.
Should Fortuna take the Satyr back because it didn't live up to Farrell's promises?
[Instructor: See Types of Warranties in Chapter 25]