14 1 express and implied warranties
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14.1 Express and Implied Warranties . After finishing this section, you will know how to: Describe the three ways an express warranty can be made State the obligations of merchants under the Magnuson Moss Warranty Act Contrast a full warranty with a limited warranty

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14.1 Express and Implied Warranties

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14 1 express and implied warranties

14.1 Express and Implied Warranties

  • After finishing this section, you will know how to:

    • Describe the three ways an express warranty can be made

    • State the obligations of merchants under the Magnuson Moss Warranty Act

    • Contrast a full warranty with a limited warranty

    • Differentiate between the implied warranty of fitness for a particular purpose and the implied warranty of merchantability


14 1 express and implied warranties

  • Warranty- SELLER’S GUARANTEE THAT THEIR PRODUCT IS NOT DEFECTIVE AND THAT IT IS SUITABLE FOR THE USE FOR WHICH IT WAS INTENDED


14 1 express and implied warranties

  • Warranties are intended to:

  • PROVIDE AN INCENTIVE TO BUY

  • IMPROVE THE QUALITY OF PRODUCTS


14 1 express and implied warranties

  • There are 2 types of warranties under the UCC:

  • Express warranty

  • Implied warranty


14 1 express and implied warranties

  • Express warranty- ORAL OR WRITTEN GUARANTEE BY THE MANUFACTURER OR SELLER

  • There are 3 types of express warranties:

    • STATEMENT OF FACT OR PROMISE BY THE SELLER

    • DESCRIPTION OF THE GOODS

    • USE OF SAMPLE OR MODEL


14 1 express and implied warranties

  • Statement or promise

  • STATEMENT OF AN EXISTING FACT:

  • Example 1

  • PROMISE OF SOMETHING THAT MAY HAPPEN IN THE FUTURE:

  • Example 2

  • EXPRESS WARRANTIES ARE OFTEN FOUND IN SALES BROCHURES, CIRCULARS, AND ADVERTISEMENTS.

  • Example 3


14 1 express and implied warranties

  • STATED IN CLEAR, PRECISE, AND UNDERSTANDABLE TERMS

  • TRY TO GET THE WARRANTY IN WRITING

  • DOESN’T HAVE TO BE WRITTEN, BUT IT MAKES IT EASIER TO PROVE

  • PAROL EVIDENCE RULE APPLIES

  • OPINIONS ARE NOT WARRANTIES


14 1 express and implied warranties

  • Description of the goods- THE SELLER WARRANTS THAT THE GOODS WILL BE THE SAME AS THE DESCRIPTION

  • Example 4

  • Sample or model- THE SELLER WARRANTS THAT THE GOODS WILL BE THE SAME AS THE SAMPLE OR MODEL

  • Example 5


14 1 express and implied warranties

  • Consumer protection

  • Guarantee- A PROMISE OR ASSURANCE OF THE QUALITY OR LIFE OF A PRODUCT

  • ANOTHER NAME FOR EXPRESS WARRANTY

  • Guarantor- ONE MAKING THE PROMISE

  • Example 6


14 1 express and implied warranties

  • A GUARANTEE NEEDS TO BE STATED CLEARLY

  • FTC- FEDERAL AGENCY SET UP IN 1914 TO ENSURE FAIR ECONOMIC PRACTICES


14 1 express and implied warranties

  • Magnuson-Moss Warranty Act (1975)- FTC CAN DEVELOP RULES REGUALTING THE ADVERTISEMENT OF GRARANTEES AND TO ENFORCE THESE GUIDELINES

  • PRODUCT OR PART COVERED BY THE GUARANTEE

  • TIME LIMIT WHEN THE PRODUCT IS ADVERTISED WITH A “LIFETIME GUARANTEE” OF PRODUCT LIFE OR THE LIFETIME OF THE PERSON

  • HOW THEY WILL SETTLE THE CLAIM

  • IDENTITY OF WHO IS THE GUARANTOR


14 1 express and implied warranties

  • Full or Limited Warranty ($10 or more)

  • Full warranty-ONE IN WHICH A DEFECTIVE PRODUCT WILL BE FIXED OR REPLACED FREE WITHIN A REASONABLE TIME AFTER THE COMPLAINT HAS BEEN MADE ABOUT IT.

  • THE CONSUMER DOESN’T HAVE TO ANYTHING UNREASONABLE- SHIP HEAVY PRODUCTS BACK TO THE FACTORY

  • GOOD NO MATTER WHO OWNS IT

  • IF IT CAN’T BE FIXED- NEW ONE OR MONEY BACK


14 1 express and implied warranties

  • Limited warranty- A WARRANTY THAT PROVIDES RESTRICTED PROTECTION

  • MUST BE LABELED

  • WHEN YOU SEE THIS ON A LABEL IT’S A GOOD IDEA TO READ THE WARRANTY


14 1 express and implied warranties

  • Magnuson-Moss Warranty Act- $15 or over the warranty must be:

  • AVAILABLE FOR THE CUSTOMER TO READ

  • FULLY DISCLOSED IN SIMPLE, EASILY UNDERSTANDABLE LANGUAGE AND TERMS AND CONDITIONS OF THE WARRANTY

  • Example 7


14 1 express and implied warranties

  • Implied warranty- GUARANTEE OF QUALITY IMPOSED BY LAW

  • NOT IN WRITING

  • ONLY WITH A SALE OF GOODS


14 1 express and implied warranties

  • There are two principal types of implied warranties:

  • WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE

  • WARRANTY OF MERCHANTABILITY


14 1 express and implied warranties

  • Warranty of Fitness for a particular purpose- THE SELLER GUARANTEES THAT GOODS ARE SUITABLE AND FIT FOR THE PURPOSE FOR THE BUYERS NEEDS

  • THE SELLER ADVISES THE BUYER AND THE BUYER RELIES ON THAT RECOMMENDATION

  • Example 8


14 1 express and implied warranties

  • Warranty of Merchantability- IMPLIED WARRANTY THAT MAKES MERCHANT OR SELLER LIABLE FOR GOODS THAT ARE NOT FAIR OR AVERAGE QUALITY AND FIT FOR ORDINARY PURPOSES FOR WHICH SUCH GOODS ARE USED

  • To be merchantable, goods must be:

  • PASS WITHOUT OBJECTION IN THE TRADE

  • BE FIT FOR ORDINARY PURPOSE

  • ADEQUATELY CONTAINED, PACKAGED, AND LABELED

  • CONFORM TO THE PROMISE


14 1 express and implied warranties

  • ONLY GIVEN BY A MERCHANT

  • Example 9

  • NEW OR USED GOODS

  • Example 10


14 1 express and implied warranties

  • Usage of trade- COMMON PRACTICE- WHEN SELLING A PUREBREAD DOG: THE ANIMAL IS ACCOMPANIED BY PAPERS

  • Warranty of title- SELLER WARRANTS THAT THE TITLE IS GOOD AND DELIVERED FREE OF ANY FINANCIAL OBLIGATIONS

  • Example 11


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