> For the complete documentation index, see [llms.txt](https://studies-de-jure.gitbook.io/learn/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://studies-de-jure.gitbook.io/learn/sourcebooks/business-law-i/contract-law-sales-contracts-and-warranties/warranties.md). # Warranties ## Introduction A **warranty** assures a buyer that the good or service is free from defects, and it is a legally binding commitment that the good or service satisfies a certain standard. Warranties are offered for a range of different goods and services, from manufactured goods to real estate to plumbing services. In the event that the product or service fails to meet the standards set out in the warranty, then the contract provides a specific remedy, such as a replacement or repair. *** {% hint style="danger" %} **Remember ...** Although services often include warranties, ***warranties under the UCC apply*** ***only to goods***. {% endhint %} ### Good Faith According to UCC § 1-304, the performance and execution of all contracts must be undertaken in good faith, which includes honoring warranties. Good faith means honesty in fact and the observance of reasonable commercial standards of fair dealing. If the parties in the contract are merchants, the UCC also requires that the contract be undertaken in accordance with commercial reasonableness. This requirement means that the transaction should be undertaken in a sensible and prudent way. ## Express Warranties An express warranty is (1) a manifestation of the nature or quality of goods that becomes a basis of the bargain and (2) is created whenever the seller affirms that the product will perform in a certain manner. Formal words such as “warrant” or “guarantee” are not necessary. A seller may create an express warranty as part of the basis for the bargain of sale by means of (1) an affirmation of a fact or promise relating to the goods, (2) a description of the goods, or (3) a sample or model. Any of these will create an express warranty that the goods will conform to the fact, promise, description, sample, or model. Thus, a seller who states that “the use of rustproof linings in the cans would prevent discoloration and adulteration” has given an express warranty, regardless of whether they realized it. Claims of breach of express warranty are, at base, claims of misrepresentation. But the courts will not hold a manufacturer to every statement that could conceivably be interpreted to be an express warranty. Manufacturers and sellers constantly “**puff**” their products, and the law is content to let them inhabit that gray area without having to make good on every claim. UCC § 2-313(2) says that “an affirmation merely of the value of the goods or a statement purporting to be merely the seller’s opinion or commendation of the goods does not create a warranty"; but an affirmation of fact does create a warranty. It is not always easy, however, to determine the line between an express warranty and a piece of **puffery**. Consider two classic cases: One of a defective used car and the other of the "faulty" bull. In the former, the salesperson said the car was in “A-1 shape” and “mechanically perfect.” The car, carrying the buyer’s seven-month-old child, broke down while the buyer was on the way to visit her husband in the army during World War II. The court said that the salesperson had made an express warranty.[1](#user-content-fn-1)[^1] In the latter case, the seller said not only that the bull calf would “put the buyer on the map” but also that “his father was the greatest living dairy bull.” The bull calf turned out to be sterile, putting the farmer on the judicial rather than the dairy map. The court said the seller’s spiel was "trade talk," not a warranty that the bull would impregnate cows.[2](#user-content-fn-2)[^2] **hull**: in this context, the outer covering of a fruit or seed **huller:** in this the outer co hand tool for removing hulls from strawberries; a machine that removes outer husks or shells from grains, nuts, or sees; can also be Is there any qualitative difference between these decisions, other than the quarter century that separates them and the different courts that rendered them? Perhaps the most that can be said is that the more specific and measurable the statement’s standards, the more likely it is that a court will hold the seller to a warranty, and that a written statement is easier to construe as a warranty than an oral one. It is also possible that courts look, if only subliminally, at how reasonable the buyer was in relying on the statement, although this ought not to be a strict test. A buyer may be unreasonable in expecting a car to get 100 miles to the gallon, but if that is what the seller promised, that ought to be an enforceable warranty. *** {% hint style="danger" %} **Contracts for the International Sale of Goods** Express warranties are summed up well by the United Nations Convention on Contracts for the International Sale of Goods (CISG): > The seller must deliver goods which are of the quantity, quality and description required by the contract and which are contained or packaged in the manner required by the contract. \[And the] goods must possess the qualities of goods which the seller has held out to the buyer as a sample or model.[3](#user-content-fn-3)[^3] > {% endhint %} *** ## Implied Warranties In certain circumstances where no express warranty was made, the law implies a warranty. This statement means that the warranty automatically arises from the fact that a sale was made. With regard to implied warranties, the law distinguishes between casual sellers and merchant sellers, with the latter held to a higher standard, given that they are in the business of buying or selling the good or service rendered. For example, unless otherwise agreed, goods sold by merchants carry an implied warranty against claims by any third party by way of trademark infringement, patent infringement, or any other intellectual property law infringement. This type of warranty is known as the warranty against infringement. Another implied warranty provided by merchant sellers is the implied warranty of fitness for normal use, which means that the goods must be fit for the ordinary purposes for which they are sold. It is important to note that if express warranties are made, this does not preclude implied warranties. If an express warranty is made, it should be consistent with implied warranties, and can be treated as cumulative, if such a construction is reasonable. If the express and implied warranties cannot be construed as consistent and cumulative, the express warranty generally prevails over the implied warranty, except in the case of the implied warranty of merchantability, or fitness for purpose. #### Implied Warranty of Merchantability If the buyer believes that there has been a breach of the implied warranty of merchantability, it is their responsibility to demonstrate that the good was defective, that this defect made the good not fit for its ordinary purpose, and that this defect caused the plaintiff harm. Typical examples of defects are: * Design defects * Manufacturing defects * Inadequate instructions on the use of the good * Inadequate warning against the dangers involved in using the good. **Specific Examples of Goods Under the Warranty of Merchantability** | Type | Description | | -------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | Second-hand goods | The UCC treats warranties arising for used goods in the same way as warranties arising for new goods, but second-hand products tend to be held to a lower standard on the warranty of merchantability. | | Buyer-designed goods | The same warranties arise for mass manufactured goods as for goods that have been specified or made to order for the buyer. However, in this case, no warranty of fitness for a particular purpose can arise since the buyer is using his or her own decisions, skill, and judgment when making the purchase. | | Food and drink | The sale of food or drink carries the implied warranty of being fit for human consumption. | #### Implied Warranty of Fitness for the Particular Purpose If a buyer relies on the seller’s skill or judgment to select the product, the buyer informs the seller at the time of purchase of his or her intention for the specific use of the good and the buyer relies on the seller’s judgment and skill in making the final choice. If the seller is not made aware of the buyer’s true intention, or does not offer his or her skill and judgment in aiding the sale, then warranty of fitness for a particular purpose does not arise. For this reason, it is common for vendors to include provisions in the average terms and conditions of sale with regard to the true and intended purpose of use. #### Warranty of Title By the mere act of selling, the vendor implies a warranty that the title is good and that the transfer of title is lawful. In addition, the act of the sale creates a warranty that the goods shall be delivered free from any lien of which the buyer was unaware. In some circumstances, the warranty of title can be excluded from the contract documents. For instance, when the seller makes the sale in a representative capacity (e.g. as an executor of an estate), then a warranty of title will not arise. #### Remedies to Buyers under the UCC | Remedy | Description | | --------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | Cancel the contract | The UCC allows buyers to cancel the contract for nonconforming goods and to seek remedies that give them the benefit of the bargain. | | Obtain cover | Buyers are allowed to substitute goods for those due under the sales contract. However, substitutes must be reasonable, acquired without delay, and obtained in good faith. | | Obtain specific performance | If the goods are unique or a legal remedy is inadequate, the seller may be required to deliver the goods as identified in the contract. | | Sue | Buyers are entitled to consequential and incidental damages if there is a breach of contract. They may also be able to obtain liquidated damages (damages before the breach occurs) or punitive damages. | ***
Attributions and Licensing Except where otherwise noted, this page's content is adapted from: * [Warranties](https://2012books.lardbucket.org/books/the-legal-environment-and-foundations-of-business-law/s20-02-warranties.html) in [*The Legal Environment and Foundations of Business Law*](https://2012books.lardbucket.org/books/the-legal-environment-and-foundations-of-business-law/index.html) by Mayer, D., Warner, D. M., Siedel, G. J., Lieberman, J. K., & Martina, A. R., used under [CC BY-NC-SA 3.0](https://creativecommons.org/licenses/by-nc-sa/3.0/). * [Warranties and Sales Contracts](https://openstax.org/books/business-law-i-essentials/pages/8-2-warranties-and-sales-contracts) in [*Business Law I Essentials* ](https://openstax.org/details/books/business-law-i-essentials/)by Mirande Valbrune and Renee De Assis (2024), used under [CC BY-NC-SA 4.0](https://creativecommons.org/licenses/by-nc-sa/4.0/). undefined * [Warranties](https://pressbooks.pub/introductiontobusinesslaw/chapter/chapter-11/) in [*Fundamentals of Business Law* ](https://pressbooks.pub/introductiontobusinesslaw/)by Melissa Randall (2020), used under [CC BY-NC-SA 4.0](https://creativecommons.org/licenses/by-nc-sa/4.0/). This page is licensed under [CC BY-NC-SA 4.0](https://creativecommons.org/licenses/by-nc-sa/4.0/).
[^1]: *Wat Henry Pontiac Co. v. Bradley*, 210 P.2d 348 (Okla. 1949) [^2]: *Frederickson v. Hackney*, 198 N.W. 806 (Minn. 1924) [^3]: [CISG, Art. 35](https://cisg-online.org/cisg-article-by-article/part-3/art.-35-cisg) --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://studies-de-jure.gitbook.io/learn/sourcebooks/business-law-i/contract-law-sales-contracts-and-warranties/warranties.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.