Book Opener

CHAPTERASSESSMENTSection 14.1 Express and ImpliedWarranties● An express warranty is an oral or writtenstatement, promise, or other representation aboutthe quality, ability, or performance of a product.Given by manufacturers or sellers, expresswarranties can be made in one of three ways:(1) by a statement of fact or a promise made theseller; (2) by a description of the goods; or (3) bythe use of a sample or model. The use of formallanguage, such as warranty or guarantee, is notnecessary to convey an express warranty.● Merchants must label written warranties as either“full” or “limited” for consumer products costingmore than $10 under the Magnuson-MossWarranty Act. The Magnuson-Moss WarrantyAct is a federal act that applies only to goodssold in interstate commerce (business activitiesthat touch more than one state).● A full warranty promises to fix or replace adefective product at no extra charge to theconsumer. The promise must be honored by thecompany issuing the warranty within a reasonableperiod of time. A full warranty is good forthe period of time mentioned in the warranty,regardless of who owns the product at the time itbreaks. A limited warranty is any warranty thatfalls short of a full warranty. Some of the stipulationsor terms of a limited warranty may include:(1) the consumer pays for repair or replacement;(2) parts are covered, but labor is not; (3) only apartial refund is given; (4) the consumer pays forshipping a product back for service; or (5) theoriginal buyer must own the product.● A seller is responsible for an implied warranty offitness if he or she knows the purpose for whicha good is needed and makes a recommendationto the buyer. In offering advice, the seller issuggesting that he or she has expert knowledge●on which the buyer should rely. This warrantyexists whether the seller is a merchant or aprivate party. In contrast, sellers who regularlysell goods of a particular kind imply a warrantyof merchantability in every sale, assuring thattheir products are fit for the purpose for whichthey are purchased. Private parties do not providethe warranty of merchantability.A warranty of title is made when sellers warrantthat the title on a good being sold is valid andthat the transfer is lawful. A warranty of titleincludes an implied promise that, to the seller’sknowledge, the goods will be delivered free fromany lien or claim by another. This warrantycannot be excluded.Section 14.2 Exclusion of Warranties,Privity, and Duty to Notify● A seller may exclude the warranty ofmerchantability by expressly mentioning that itbe excluded on a warranty document. If thewarranty of merchantability is excluded bywritten notice, the exclusion must be writtenprominently. Implied warranties can also beexcluded by including the words “as is” or “withall faults” on a warranty document. Having abuyer examine and accept goods as being defectfreeis another way to exclude warranties.● Warranties are made to buyers of goods.Warranties also extend to those who wouldreasonably be expected to use or be affected bygoods purchased by the buyer. People affected bya good purchased by a buyer may include peoplewho live in the buyer’s household.● To succeed in a claim for breach of warranty, thebuyer must notify the seller of the defect within areasonable time after the defect is discovered.Failure to do so will prevent the buyer fromrecovering.310 Unit 3: Understanding Consumer Law