business law chapter 21 notes
CHAPTER 21: WARRANTIES AND PRODUCT LIABILITY
A warranty is an assurance by one party of the existence of a fact on which the other party can rely.
WARRANTIES: Several types of warranties: (1) warranties of title, (2) express warranties, (3) implied warranties.
1. WARRANTIES OF TITLE: 3 types of title warranties- good title, no liens, and no infringements-can automatically arise in sales and lease contracts. Sellers warrant they have good and valid title; if buyer learns they don’t the buyer can sue seller for breach of warranty. Liens-protects buyers who unknowingly purchase goods that are subject to a creditor’s security interest. Free of infringements-when seller is merchant, s/he automatically warrants that the goods delivered are free from any copyright, trademark, or patent claims of a third person.
2. EXPRESS WARRANTIES: arise when a seller/lessor indicates any of the following:
Goods conform to any affirmation (declaration that something is true) or promise of fact that seller makes to the buyer about the goods. (i.e. statements such as “these drill bits will penetrate stainless steel-and without dulling.”)
Goods conform to any description of them (i.e. a label that reads “crate contains one 150 horsepower diesel engine” or delivery of “camel’s hair coat”)
Goods conform to any sample or model of the goods shown to buyer
BASIS OF THE BARGAIN: A seller does not have to use formal words such as warrant or guarantee. It is only necessary that a reasonable buyer would regard the representation of fact as part of the basis of the bargain.
STATEMENTS OF OPINION AND VALUE: only statements of fact create express warranties. If seller makes a statement that relates to the supposed value or worth of the goods, or makes a statement of opinion or recommendation about the goods, seller is not creating an express warranty. PUFFERY- is the expression of opinion by a seller that is not made as a representation of fact and creates no warranty. IF seller is an
A warranty is an assurance by one party of the existence of a fact on which the other party can rely.
WARRANTIES: Several types of warranties: (1) warranties of title, (2) express warranties, (3) implied warranties.
1. WARRANTIES OF TITLE: 3 types of title warranties- good title, no liens, and no infringements-can automatically arise in sales and lease contracts. Sellers warrant they have good and valid title; if buyer learns they don’t the buyer can sue seller for breach of warranty. Liens-protects buyers who unknowingly purchase goods that are subject to a creditor’s security interest. Free of infringements-when seller is merchant, s/he automatically warrants that the goods delivered are free from any copyright, trademark, or patent claims of a third person.
2. EXPRESS WARRANTIES: arise when a seller/lessor indicates any of the following:
Goods conform to any affirmation (declaration that something is true) or promise of fact that seller makes to the buyer about the goods. (i.e. statements such as “these drill bits will penetrate stainless steel-and without dulling.”)
Goods conform to any description of them (i.e. a label that reads “crate contains one 150 horsepower diesel engine” or delivery of “camel’s hair coat”)
Goods conform to any sample or model of the goods shown to buyer
BASIS OF THE BARGAIN: A seller does not have to use formal words such as warrant or guarantee. It is only necessary that a reasonable buyer would regard the representation of fact as part of the basis of the bargain.
STATEMENTS OF OPINION AND VALUE: only statements of fact create express warranties. If seller makes a statement that relates to the supposed value or worth of the goods, or makes a statement of opinion or recommendation about the goods, seller is not creating an express warranty. PUFFERY- is the expression of opinion by a seller that is not made as a representation of fact and creates no warranty. IF seller is an