Business Law: chapter 24
Terms
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- Warranties
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Seller's obligation covering title, quality, characteristics, or condition of goods; seller not required to provide: Code prescribed implied warranties must be affirmatively disclaimed to avoid liability.
- Warranty of TItle
- Seller's duty to convey ownership without any lien; seller implicitly warrants good title, transfer is rightful, no security interest or other lien exists against goods which buyer has no knowledge of at the time of contracting
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Express Warranites
- Statement of fact or promise about goods; description of goods, sale by sample or model; becomes part of basis of bargain; no formal words ("warrant" "guarantee") required; seller not required to know statement is untrue
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creation of express warranty
- Created by seller orally, in writing; making statement (not value or opinion) of fact or promise; covers quality, condition, capacity, performability, or safety
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Implied Warranties
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Contractual obligation arising out of circumstances of sale; exist by operation of law; not found from contract language; both types may apply
- implied warranty of Merchantability
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Code requires merchant sellers to impliedly warrant that goods are reasonable fit for ordinary purposes for which they're manufactured and sold; that they're of fair, average quality.
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Implied warranty of Fitness for a particular purpose
- any seller impliedly warrants that goods are fit for stated purpose; seller selects product knowing buyer's intended use; buyer relies on seller's judgment in selecting goods; applies to specific, not ordinary, purpose.
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Disclaimer of warranties
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Elimination of protection; Code provides reasonable construction of words/conduct for disclaimers, limitations to apply
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Disclaimer of warranties: Express Exclusions
- title warranty excluded by specific language or certain circumstances (judicial sale, sale by sheriff, executor, foreclosure, seller sells only such title as he has)
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Disclaimer of warranties: Implied warranty
- Disclaime, modificaiton language for implied merchantability must mention "merchantability" and be conspicuous; disclaimer of fitness for particular purpose must be written and conspicuous; implied warranties disclaimed by "as is,"
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Disclaimer of warranties: Buyer's examination or refusal to examine
- inspecting goods before entering contract waives implied warranties for apparent, knowable defects; failure to inspect may void consumer warranty protection.
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Disclaimer of warranties: Federal legislation covering consumer warranties
- Federal trade commission admisisters/enforces magnuson-Moss Warranty Act; designated to protect consumer purchasers; requires clear, useful warranty information covering consumer goods (used for persona, family, or household purposes); seller making writt
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Limitations/Modificaitons of warranties
- The Code permits seller to limit or modify buyer's remedies for breach of warranty; limitations cannot be unconscionable or exclude consequential damages language.
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Privity of contract
- 19th century legal doctrine requiring contractual relationship between plaintiff-buyer and defendant-seller for warranty recovery
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Horizontal Privity
- Noncontracting nonpurchaser (user, consumer, bystander_ injured by defective goods; the Code lists recobginized plaintiff; seller's warranty, express or implied, extends to any natural person in the family, household or guest of buyer at home; must be
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Vertical Privity
- Who is liable for breach of warranty; covers remote sellers (manufacturers, wholesalers, retailers) within chain of distribution with whom consumer purchaser has not contracted; most states have eliminated of vertical privity to maintain warranty actions&
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Notice of Breech of Warranty
- Buyer must notify seller of warranty breach within reasonable time to have remedy against seller
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Plaintiff's conduct
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Buyer's contributory negligence not a defense in action against seller for breach of warranty; Buyer discovering defect that might cause injury and proceeds to use goods waives right to recover against seller based on voluntary assumption of risk.
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Strict Liability in Tort Section 402A of Restatement Torts
- Applies liability to merchant sellers for personal injuries and property damage; coversunreasonably dangerous defect; strict liability does not require proof of seller's negligence, seller's reasonable care not a defense
- Manufacturing Defect
- by failing to meet its own manufacturing specifications, the product is not properly made
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Failure to Warn
- a product is defective because of inadequate instructions or warnings when the foreseeable risks of harm posed by the product could have been reduced or avoided by the provision of reasonable instructions or warnings
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Failure to Warn
- failure to provide adequate warnings of possible danger or to prov
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Unreasonably Dangerous
- contains a danger beyond that which would be contemplated by the ordinary consumer
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Subsequent Alteration
- liability exists only if the product reaches the user or consumer without substantial change in the condition in which it is sold
- Tort Law
- Personal injury lawsuits are regularly filed by individuals or groups who have been injured as a result of another party's negligence or wrongdoing. These wrongs, which are civil wrongs because they fall under the umbrella of civil law, are called torts. The area of law that covers torts and lawsuits filed for torts is called tort law. Most any lawsuit filed for a personal injury is going to fall under tort law. In tort cases, the main goal is to collect money, also called damages, to recover from lost income, to account for pain and suffering, and to reimburse any medical expenses that the victim has incurred as a result of their injury. In a few personal injury lawsuits, the plaintiffs seek something other than money, sometimes imprisonment for the defendant, although this is rare.
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Limitations on Damages
- many States have limited the punitive damages that a plaintiff can collect in a product liability lawsuit
- General Rule
- one engaged in the business of selling products who Sells a defective product is subj