Black-letter propositions
- 01
Any affirmation of fact or promise by the seller that relates to the goods and becomes part of the basis of the bargain creates an express warranty that the goods will conform to it; so does any description of the goods or any sample or model that becomes part of the basis of the bargain.
- 02
A seller need not use formal words such as warrant or guarantee, or intend to make a warranty, but an affirmation merely of the value of the goods, or a statement of the seller's opinion or commendation, does not create a warranty.
- 03
Unless excluded or modified, a warranty of merchantability is implied in a contract for the sale of goods if the seller is a merchant with respect to goods of that kind, and serving food or drink for value is a sale.
- 04
Merchantable goods must at least pass without objection in the trade under the contract description, be fit for the ordinary purposes for which such goods are used, be adequately contained, packaged and labeled as the agreement may require, and conform to promises or affirmations of fact on the container or label.
- 05
Where the seller at the time of contracting has reason to know any particular purpose for which the goods are required and that the buyer is relying on the seller's skill or judgment to select or furnish suitable goods, an implied warranty of fitness for that purpose arises unless excluded or modified.
- 06
To exclude or modify the implied warranty of merchantability the language must mention merchantability and, in a writing, be conspicuous; to exclude any implied warranty of fitness the exclusion must be in a writing and be conspicuous.
- 07
Unless the circumstances indicate otherwise, expressions like as is or with all faults exclude all implied warranties, and there is no implied warranty as to defects that an examination the buyer made, or refused to make, ought to have revealed.
- 08
Warranties, whether express or implied, are construed as consistent with each other and as cumulative, but if that is unreasonable the parties' intention decides which is dominant; exact or technical specifications displace an inconsistent sample or general description, and express warranties displace inconsistent implied warranties other than fitness for a particular purpose.
- 09
After the buyer has accepted goods, the buyer must within a reasonable time after it discovers or should have discovered any breach notify the seller of the breach or be barred from any remedy, and the buyer has the burden of establishing any breach with respect to accepted goods.
- 10
The measure of damages for breach of warranty is the difference, at the time and place of acceptance, between the value of the goods accepted and the value they would have had if they had been as warranted, unless special circumstances show proximate damages of a different amount; incidental and consequential damages may also be recovered in a proper case.
- 11
An agreement may limit the buyer's remedies to return of the goods and repayment of the price or to repair and replacement, and such a remedy is exclusive if expressly agreed to be; where an exclusive or limited remedy fails of its essential purpose, remedy may be had as provided in the Code.
- 12
Consequential damages may be limited or excluded unless the limitation is unconscionable; limitation of consequential damages for injury to the person in the case of consumer goods is prima facie unconscionable, while limitation where the loss is commercial is not.
Use this attack sequence under time
Frame the issue
Look for statements, descriptions, samples or models by the seller that formed part of the basis of the bargain.
Resolve the next checkpoint
Decide whether the seller is a merchant, and whether the buyer relied on the seller to select goods for a particular purpose.
Resolve the next checkpoint
Check any disclaimer for the required words, conspicuousness and writing, or for language like as is.
Finish the conclusion
Check the buyer's notice, the damages measure, and any contractual limit on remedies.
Common wrong turns
- Sales talk about value or the seller's opinion does not create an express warranty.
- The merchantability disclaimer must use the word merchantability, while as is language can disclaim all implied warranties.
- A remedy limit that fails of its essential purpose does not shield the seller from the ordinary Code remedies.
Worked example
A retailer tells a buyer, who says she needs a saw for cutting wet stone, that a certain saw will do the job. The buyer relies on the retailer, and the saw fails when cutting wet stone.
The retailer had reason to know the particular purpose and that the buyer was relying on its judgment, so an implied warranty of fitness for a particular purpose arose unless properly excluded, and the statement may also be an express warranty.
Practice this topic
Express and implied warranties
Under UCC section 2-313, an affirmation of fact or promise by the seller relating to the goods, or a description, sample or model, creates an express warranty when it becomes part of the basis of the bargain. The section says the seller need not use formal words such as warrant or guarantee or have a specific intention to make a warranty, but a statement merely of the value of the goods or the seller's opinion or commendation of the goods does not create a warranty.
Section 2-314 implies a warranty of merchantability where the seller is a merchant with respect to goods of that kind, and it defines merchantable goods to pass without objection in the trade under the contract description, be fit for the ordinary purposes for which they are used, run of even kind, quality and quantity, be adequately contained, packaged and labeled, and conform to any promises or affirmations of fact on the container or label. Section 2-315 implies a warranty of fitness for a particular purpose where the seller at the time of contracting has reason to know the purpose and that the buyer is relying on the seller's skill or judgment.
Disclaimers and conflicts among warranties
Section 2-316(2) requires that language excluding or modifying the implied warranty of merchantability mention merchantability and, if written, be conspicuous, and requires any exclusion of the implied warranty of fitness to be in a writing and conspicuous. Under section 2-316(3), expressions like as is or with all faults exclude all implied warranties unless the circumstances indicate otherwise, and if the buyer examined the goods as fully as it desired, or refused to examine them, there is no implied warranty as to defects the examination ought to have revealed.
Section 2-317 provides that warranties are construed as consistent and cumulative, but if that is unreasonable the parties' intention determines which is dominant, and that exact or technical specifications displace inconsistent samples or general descriptions, a sample from an existing bulk displaces inconsistent general language, and express warranties displace inconsistent implied warranties other than fitness for a particular purpose.
Notice, damages, and limiting remedies
Section 2-607(3)(a) requires a buyer who has accepted goods to notify the seller of breach within a reasonable time after it discovers or should have discovered it or be barred from any remedy, and section 2-607(4) puts the burden on the buyer to establish any breach with respect to accepted goods. Section 2-714(2) measures damages for breach of warranty as the difference at the time and place of acceptance between the value of the goods as accepted and their value as warranted, unless special circumstances show proximate damages of a different amount.
Section 2-719 allows the agreement to substitute or add remedies and to limit damages, for example to return of the goods and repayment of the price or repair and replacement, and a remedy is exclusive only if expressly agreed to be. Under section 2-719(2), an exclusive or limited remedy that fails of its essential purpose permits remedy under the Code, and under section 2-719(3), consequential damages may be limited unless the limitation is unconscionable, with a limitation for personal injury from consumer goods prima facie unconscionable.
Frequently asked questions
What is the controlling rule for ucc warranties: express, merchantability, fitness, disclaimers, and remedy limits?+
Identify the warranty source (express, merchantability, fitness), test any disclaimer under section 2-316, give notice under section 2-607, and measure damages under section 2-714.
How is an express warranty created?+
By any affirmation of fact or promise, description, sample or model that becomes part of the basis of the bargain, under UCC section 2-313.
Does the seller's opinion create a warranty?+
No. Section 2-313(2) says a statement of value or of the seller's opinion or commendation does not create a warranty.
Who gives the warranty of merchantability?+
A seller that is a merchant with respect to goods of that kind, unless it is excluded or modified, under UCC section 2-314.
How can a seller disclaim merchantability?+
By language that mentions merchantability and, in a writing, is conspicuous, or by an expression like as is, under section 2-316.
How long does a buyer have to notify the seller of breach?+
A reasonable time after the buyer discovers or should have discovered the breach, or it is barred from any remedy, under section 2-607(3)(a).