Chapter 12 Warranties Product Liability and Consumer Law Warranties of Title The UCC provides for the following warranties of title Good title He or she is the proper owner of what is being sold No liens A seller warrants that the goods sold are free of any liens or any encumbrances No infringements A merchant seller warrants that the good are free of claims that a patent trademark or copyright has been infringed Lien The legal claim of one person upon the property of another person to secure the payment of a debt or the satisfaction of an obligation Express Warranties A contractual promise concerning the quality condition description or performance of the goods being sold or leased a An affirmation or promise of fact b A description of the goods c A sample shown as conforming to the contract goods Under the Magnuson Mass Warranty Act Express written warranties covering consumer goods priced as more than 25 if made must be labeled as one of the following o Full Warranty Free repair or replacement of defective parts Or if the goods cannot be repaired in a reasonable time refund or replacement is available o Limited Warranty When less than a full warranty is being offered Implied Warranty A warranty not stated explicitly by the seller of merchandise or real property but presumed for reasons of commercial or legal custom Implied Warranty of Merchantability When a seller or lessor is a merchant who deals in goods of the kind sold or leased The seller or lessor warrants that the goods sold or leased are Properly packaged and labeled Are of proper quality Reasonably fit for the ordinarily purposes for which such goods are used Applies to food Implied Warranty of Fitness for a Particular Purpose Arises when the buyer s or lessee s purpose or use is expressly or impliedly known by the seller or lessor and the buyer or lessee purchases or leases the goods in reliance on the seller s or lessor s selection Other implied warranties can arise as a result of course of dealing or usage of trade Particular purpose key factor Overlapping Warranties The UCC construes warranties as cumulative if they are consistent with each other If warranties are inconsistent then express warranties take precedence over implied warranties except for the implied warranty of fitness for a particular purpose Also samples take precedence over general descriptions and exact or technical specifications displace inconsistent samples or general descriptions Warranty Disclaimers An oral express warranty can be disclaimed in writing if the disclaimer is clear conspicuous and called to the buyers or lessees attention at the time the contract is formed A disclaimer of the implied warranty of merchantability must specifically mention the word merchantability The disclaimer need not be in writing but if it is written it must be conspicuous A disclaimer of the implied warranty of fitness must be in writing and be conspicuous though it need not mention the word fitness Warranty Implied from Prior Dealings or Trade Custom In the absence of evidence to the contrary when both parties to a sales or lease contract have knowledge of a well recognized trade custom the courts will infer that both parties intended that trade custom to apply to their contract Product Liability The legal liability of manufacturers sellers and lessors of goods for injuries or damage caused by the goods to consumers or uses or bystanders Negligence claims failure to exercise care Misrepresentation User or consumer is injured as a result of the manufacturers fraudulent misrepresentation Strict Product Liability People may be liable for the results of their acts regardless of their intentions or their exercise of reasonable care In addition liability does not depend of privity of context The law imposes strict product liability as a matter of public policy This public policy rests on the threefold assumption that 1 Consumers should be protected against unsafe products 2 Manufacturers and distributors should not escape liability for faulty products simply because they are not in privity of contract with the ultimate user of those products 3 Manufacturers sellers and lessors of products are generally in a better position than consumers to bear the costs associated with injuries caused by their products costs that they can ultimately pass on to all consumers in the form of higher prices Liability Based on Negligence 1 The manufacturer must use due care in designing the product selecting materials using the appropriate production process assembling and testing the product and placing adequate warnings on the label or product 2 Privity of contract is NOT required A manufacturer is liable for failure to exercise due care to any person who sustains an injury proximately caused by a negligently made defective product 3 Fraudulent misrepresentation of a product may result in product liability based on the tort of fraud Strict Liability Requirements 1 Defective when sold 2 Must be manufacturer or merchant 3 Must be unreasonably dangerous because of its defective condition 4 Must suffer physical harm 5 Proximate cause the defect injures you 6 The product cannot be substantially changed from the time it was sold to the point of injury Unreasonably Dangerous Product A product that is so defective that it is dangerous beyond the expectation of an ordinary consumer or a product for which a less dangerous alternative was feasible but the manufacturer failed to produce it Strict Liability Proud Defects A product may be defective in 3 basic ways 1 2 3 In its manufacture In its design In the instructions or warnings that come with it Other Applications of Strict Liability 1 Manufacturers and other sellers are liable for harms suffered by bystanders as a result of 2 Suppliers of component parts are strictly liable for defective parts that when incorporated into defective products a product cause injuries to users Defenses to Product Liability Preemption An injured party may not be able to sue the manufacturer of a product that is subject to comprehensive federal safety regulations such as medical devices Assumption of risk The user or consumer knew of the risk of harm and voluntarily assumed it Product misuse The user or consumer misused the product in a way unforeseeable by the manufacturer Comparative Negligence Liability may be distributed between the plaintiff and the defendant under the doctrine of comparative negligence if the plaintiffs misuse of the product contributed
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