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okay folks we are now moving on to chapter 23 this is a law of contracts community college rhode island spring 2020 this is our final chapter the end of the road alright chapter 23 deals with warranties I like to describe warranties as part of the contract that continues out in time beyond the main performance in the agreement now warranties are assurances are guarantees that Goods will perform as intended and that they will not harm or cause injury but the idea of a warranty is most readily analogized so what happens when you purchase a car not even an analogy the reality when you purchase a car the basic performance takes place immediately you're buying a $30,000 brand new car you have to come up with $30,000 either by way of a loan or with money you had in the bank bring a check to the dealer they give you title and ownership of the car however along with the car come warranty so the basic contract has been performed you gave the money they gave you the goods however the warranty say that for a period of time then some new cause it's five years 60,000 miles hundred thousand miles there are promises that if anything happens to the car doesn't work correctly that the manufacturer and or through the dealer will make sure that the car gets repaired that the cars kept running that the car maintains its ability to do what it's supposed to do so in effect what has happened all of the contract has been performed except for one little condition which is a condition that says should the car break down during a service during a certain period of time or before a certain number of miles have been incurred that it remains the responsibility of the dealer in the manufacturer to see that the car is repaired there are Express warranties in their implied warranties Express warranties are very much of the nature of auto warranties that we just spoke about whereas part of the bargain for consideration the buyer is looking for the lessor is looking for certain promises that will be made that will guarantee the product will work and will be safe for them implied warranties here are more warranties that are created by law there are really no warranties by implication because of actions of the parties or words of the party I if they were words they be expressed but by actions of the parties or by costs of dealing but the UCC in particular sets out several warranties that are created by the law they are there whether the parties want them to be there or not sometimes they can be modified or they can be waived by the parties but the UCC makes it somewhat difficult for that to happen so basically what happens is with implied warranties on every transaction that is covered by the UCC the warranties exist they are there now the first warranty that comes into play under the UCC is something called the warranty of title and basically what that is saying is that the seller or the lessor are the owner of the property they have good title of the property and they have the right to give ownership or the lease for the term that described in the contract to the buyer or the lessor they're basically saying that no one will show up saying oh they didn't really own that I want it I have a court order to take him back or they owed money on that and now you must pay me whatever they owed in order to keep it they're basically saying that they're the owners of the property there are no liens a lien is a claim that a creditor has that would allow them to take possession of the goods if the creditor is not paid there is a formal process under the UCC called a secured transaction to establish liens and the liens are filed with the Secretary of State with the County Register of Deeds the local registrar deeds so there are ways to check to see if these liens exist but again a seller unless they admit or tell you of a lien they are selling you the goods saying that there are no liens they're also saying there is no infringement infringement would be when the good of the product somehow violates a patent a copyright or a trademark held by somebody who is not the seller or the lessor if a claim is made in terms of infringement the person against whom it's made particularly their a merchant not so much a consumer but if it's a merchant receives a claim that oh the goods that your you got from X that you're trying to sell or infringing on our copyright the merchant must give notice to the person from whom they obtained the property to give that person an attempt to defend their rights and to prove that the infringement is not valid and only after they give them notice and give them the opportunity to sue do they acquire the rights to bring an action concerning the infringement Express warranties are created by statements of fact the UCC interpretation of this is very broad any affirmation of fact or promise made during negotiations any description and an ad a brochure online any sample or model shown to a buyer all of these create Express warranties in addition to whatever the parties actually right into their agreement so when we're talking about warranties the rule of integrated contracts does not necessarily apply for UCC goods the UCC will go look go back and look at what claims were made during the process of negotiation or the process of trying to get the buyer to buy the seller does not have to use the word warranty or guarantee any representation about the quality of the goods made as part of the basis of the bargain that is they relied on by the buyer are sufficient to create a warranty so that the actual words do not have to be used statements of opinion or value are not considered part of the warranty values can go up and down values change in circumstances so sellers are not deemed to be given any guarantee as to value the only thing that they are giving guarantees are artifacts so the other thing is opinions this is the best ice cream ever made on the planet this is loved beloved by most of the people who have tried it anything that's an opinion is not part of the warranty so large parts of the advertising well in the old days we call puffery the these are the best shoes ever made you'll feel wonderful wearing these everybody will look at you and think you're great with this kind of makeup these types of things are not considered part of the warranties virus must show a reasonable reliance on some factual statement to claim it's part of the warranty and the statement must be specific reasonable and it must be capable of being proven true true or false for the buyer to use it as a claim of a breach of an express warranty now there are two large implied warranties placed on goods by the UCC as we said above an implied warranty is a warranty that is created by statute and it is there where the parties think about it don't think about it it can be excluded in certain situations but by and large they cover all transactions for sale and leasing of goods the first one is the implied warranty of merchantability and what that is it is a statement saying that these goods are reasonably fit for the purpose for which they are intended to be used so a manufacturer of goods is telling a merchant that he is selling the goods to that these goods are reasonably fit in this applies to the labels and the packaging as well as the item itself the manufacturer merchant doesn't guarantee that the product is free from all defects but they are stating that it's reasonably able to be used and reasonably certain not to cause injury or damage an implied warranty of fitness for a particular purpose is more specific here the merchant is guaranteeing that the product will fulfill whatever use was intended by the buyer the lessee Goods can be Mercanti bull and fit for one purpose but not for another a pair of dress shoes may be Merkin the bull well designed sized correctly durable water-resistant however the shoes would not be useful for playing basketball or for running a marathon the seller does not need to have knowledge of a buyer's particular intended use but just have reason to know how the product will generally be used in public by individuals warranties implied from prior dealings or trade usage so again as we've seen throughout the UCC that warranties can be created by the prior actions of the parties now in addition to warranties created under the UCC there are other warranties created by state and federal statutes under state law there are things called lemon laws that apply to the purchase of vehicles and they apply they allow consumers who buy a lemon a car that does not run correctly with a remedy to basically give that car back and either get another car or get their money back most of these laws give the seller of the vehicle a number of attempts to correct the defect and it's only after the attempted Corrections fail that the buyer has the right to send the car back and seek repayment or to seek another vehicle many of these laws require the parties to submit to arbitration which means it's impossible or difficult to sue in court over this type of thing that if you ultimately have a dispute with the dealer or the manufacturer of an automobile you're going to go before an arbiter and you're going to have your case heard by a non judge in add-on judicial setting the Magnusson Moss Warranty Act a federal statute enacted by Congress says that no merchant is required to give an express warranty but if the cost of goods are over $25.00 in the seller does give a warranty it must be clearly labeled as to whether it's a full or a limited warranty a full warranty guarantees repair or replacement of the item a limited warranty has limited promises from the seller this Act only applies to consumer transactions and it requires that the warranties be fully disclosed and clear in everyday language in the packaging in the brochures so that the consumers understand exactly what the warranties are now there is such a thing as overlapping warranties a product can be subject to the UCC warranties and also come within the lemon law within the magnet Samoas warranty act when the warranties are consistent the UCC says that all of them apply if the warranties conflict Express warranties take priority over implied warranties it is possible in some circumstances to disclaim or warranties or to limit liabilities write any Express warranties can be disclaimed by stating this is not a warranty however this must be clearly stated and made visible to a consumer and a consumer transaction implied warranties that these can be disclaimed if the sale is advertised and stated to be as is or with all faults this must be made clear to the buyer normally in order to have this take place I tell my clients it must be in writing and the writing needs to be in big bold print as is with all false to disclaim the implied warranty of merchantability there must be specific written notice using the name of the warranty saying that we are not giving it to disclaim the warranty for fitness for a particular purpose the seller has to put in writing that there are no warranties beyond any express warranty provided here defects defects which are reasonably ascertainable are not covered by the warranties if the buyer or lessor refuse to do an inspection and did not notify of the nonconformity so one of the things that buyers and let's us have to be aware of that even though you do get warranties with products you basically have a duty to uphold your own rights and if you fail to inspect or fail to give timely notice you may lose whatever protection you had under the warranties warranties can be disclaimed however it's very easy for a court to particularly in a consumer transaction say that a disclaimer of a warranty was unconscionable if it was unconscionable then the court will write the warranty back into the situation as with the rest of the UCC there is a statute of limitations on warranties it is four years and it runs from the date of the delivery of the good so buyers must not only give reasonable notice of the breach of warranty but they must file suit on it within four years or they would lose their right to do so okay guys that ends chapter 23 that ends the course I just want to say thank you all for putting up with this in these unusual circumstances I feel very badly that we didn't get to do half the semester in the classroom because that's part of what I like to do but else I feel it's a very great part of the learning experience this has been a rather challenging and interesting time for me to get these courses up and running and I know it's been a difficult time for you guys so I thank you for sticking with it pay attention to blackboard get your quizzes and briefs in to me and stay safe and healthy