Express warranty

Last updated

An express warranty is created when a seller makes a guarantee to the buyer that the product/service being offered has certain qualities. Presenting an express warranty to a customer could potentially give rise to a product liability claim towards the company due to a marketing defect. [1] For an express warranty to exist between a seller and a buyer, the following must occur. [2]

First, a statement must be made. This statement could be made by making a promise with the buyer about the product/service being offered, giving the buyer a description of the product/service being offered, or by providing the buyer with a sample of the product/service being offered. [2] Advertisements can also be used as a medium in which express warranties can be created. [1] For there to be an express warranty the seller does not have to express that he/she is making a guarantee or warranty; as long as what is being said is a factual statement and as long as the buyer relied on the facts when deciding to make the purchase, then there exists an express warranty. However, there is no warranty if the seller is simply sharing his thoughts over the product/service that is being offered. [2] Giving an opinion rather than a factual statement; a statement formed subjectively rather than objectively, is known as puffing. [3] The act of puffery does not set the grounds for the creation of an express warranty. [2]

Second, the buyer must have depended on this guarantee (in whichever form it was made) when deciding whether or not to purchase the product/service. If a buyer believes that the product or service purchased does not resemble that which was expressed in the guarantee then the buyer has the option to file for a breach of express warranty. A seller could try to prove that the statements that were made did not play a role in the buyer's decision-making process. [2]

Requirements

Under the federal Magnuson-Moss Warranty Act, passed by Congress in 1975, the seller must provide a written express warranty that the product will be as demonstrated by the company. Any product above US$15 is eligible for written express warranty. [4]

There is no requirement on how the warranty should be expressed and can be written in many different ways. [4]

Most of the express warranty are given by the manufacturer. [4] Example:

A buyer wants to purchase a machine from Company X that he/she needs in order to get a specific job done. A Company X representative hands the buyer a brochure with details on a specific machine; the brochure states how this particular machine is capable of getting the buyers desired job done. Additionally, the representative orally confirms that what is being stated in the brochure is true; these affirmations led the buyer to purchase the machine. However, after purchase, the buyer faced problems with the machine. The product failed to meet the promises made by both the company brochure and the company representative.

In the scenario pictured above, there is an express warranty given the fact that 1) the company representative guaranteed that the product had a certain ability and that 2) the buyer relied on this guarantee when making the decision to purchase. Therefore, the buyer could sue for breach of express warranty and could also file a product liability claim. [2]

Related Research Articles

Caveat emptor is Latin for "Let the buyer beware". It has become a proverb in English. Generally, caveat emptor is the contract law principle that controls the sale of real property after the date of closing, but may also apply to sales of other goods. The phrase caveat emptor and its use as a disclaimer of warranties arise from the fact that buyers typically have less information than the seller about the good or service they are purchasing. This quality of the situation is known as 'information asymmetry'. Defects in the good or service may be hidden from the buyer, and only known to the seller.

A request for proposal (RFP) is a document that solicits proposal, often made through a bidding process, by an agency or company interested in procurement of a commodity, service, or valuable asset, to potential suppliers to submit business proposals. It is submitted early in the procurement cycle, either at the preliminary study, or procurement stage.

In contract law, a warranty is a promise which is not a condition of the contract or an innominate term: (1) it is a term "not going to the root of the contract", and (2) which only entitles the innocent party to damages if it is breached: i.e. the warranty is not true or the defaulting party does not perform the contract in accordance with the terms of the warranty. A warranty is not a guarantee. It is a mere promise. It may be enforced if it is breached by an award for the legal remedy of damages.

A real estate contract is a contract between parties for the purchase and sale, exchange, or other conveyance of real estate. The sale of land is governed by the laws and practices of the jurisdiction in which the land is located. Real estate called leasehold estate is actually a rental of real property such as an apartment, and leases cover such rentals since they typically do not result in recordable deeds. Freehold conveyances of real estate are covered by real estate contracts, including conveying fee simple title, life estates, remainder estates, and freehold easements. Real estate contracts are typically bilateral contracts and should have the legal requirements specified by contract law in general and should also be in writing to be enforceable.

Implied warranty

In common law jurisdictions, an implied warranty is a contract law term for certain assurances that are presumed to be made in the sale of products or real property, due to the circumstances of the sale. These assurances are characterized as warranties irrespective of whether the seller has expressly promised them orally or in writing. They include an implied warranty of fitness for a particular purpose, an implied warranty of merchantability for products, implied warranty of workmanlike quality for services, and an implied warranty of habitability for a home.

In common law jurisdictions, a misrepresentation is an untrue or misleading statement of fact made during negotiations by one party to another, the statement then inducing that other party to enter into a contract. The misled party may normally rescind the contract, and sometimes may be awarded damages as well.

Lemon laws are United States state laws that provide a remedy for purchasers of cars and other consumer goods in order to compensate for products that repeatedly fail to meet standards of quality and performance. Although many types of products can be defective, the term "lemon" is mostly used to describe defective motor vehicles, such as cars, trucks, and motorcycles.

<i>Heilbut, Symons & Co v Buckleton</i>

Heilbut, Symons & Co v Buckleton [1912] UKHL 2 is an English contract law case, given by the House of Lords on misrepresentation and contractual terms. It held that a non-fraudulent misrepresentation gave no right to damages. This was decided some time before Hedley Byrne v Heller, where damages for negligent misrepresentation were introduced in English law, and it would today be regarded as wrongly decided.

As is, when employed as a term with legal effect, is used to disclaim some implied warranties for an item being sold. Certain types of implied warranties must be specifically disclaimed, such as the implied warranty of title. "As is" denotes that the seller is selling, and the buyer is buying an item in whatever condition it presently exists, and that the buyer is accepting the item "with all faults", whether or not immediately apparent. This is the classic "buyer beware" situation, where the careful buyer should take the time to examine the item before accepting it, or obtain expert advice.

Magnuson–Moss Warranty Act

The Magnuson–Moss Warranty Act is a United States federal law. Enacted in 1975, the federal statute governs warranties on consumer products. The law does not require any product to have a warranty, but if it does have a warranty, the warranty must comply with this law. The law was created to fix problems as a result of manufacturers using disclaimers on warranties in an unfair or misleading manner.

<i>Grant v Australian Knitting Mills</i>

Grant v Australian Knitting Mills, is a landmark case in consumer and negligence law from 1935, holding that where a manufacturer knows that a consumer may be injured if the manufacturer does not take reasonable care, the manufacturer owes a duty to the consumer to take that reasonable care. It continues to be cited as an authority in legal cases, and used as an example for students studying law.

Contract Legally binding document establishing rights and duties between parties

A contract is a legally binding document between at least two parties that defines and governs the rights and duties of the parties to an agreement. A contract is legally enforceable because it meets the requirements and approval of the law. A contract typically involves the exchange of goods, service, money, or promise of any of those. "Breach of contract", means that the law will have to award the injured party either the access to legal remedies such as damages or cancellation.

Contractual terms in English law is a topic which deals with four main issues.

<i>Friend v. Childs Dining Hall Co.</i>

Friend v. Childs Dining Hall Co., 231 Mass. 65, 120 N.E. 407 (1918), is part of a progression of cases that influenced the products liability synthesis that emerged in the 1930s. These cases influenced Judge Cardozo's argument in MacPherson v. Buick Motor Co. that a person could be liable for a defective product to someone other than the immediate purchaser. This created the law of product liability.

<i>Chysky v. Drake Bros. Co.</i>

Chysky v. Drake Bros. Co., 235 N.Y. 468, 139 N.E. 576 (1922), was a products liability case before the New York Court of Appeals. The Court held that a plaintiff cannot recover from a defendant based on implied warranty when she does not have contractual privity with him; thus, a plaintiff cannot recover from a defendant who sold her employer food unfit for consumption, because the defendant's implied warranty extended only to the employer.

<i>Esso Petroleum Co Ltd v Mardon</i>

Esso Petroleum Co Ltd v Mardon [1976] EWCA Civ 4 is an English contract law case, concerning misrepresentation. It holds that the divide between a statement of opinion and fact becomes more factual if one holds himself out as having expert knowledge.

The South African law of sale is an area of the legal system in that country that describes rules applicable to a contract of sale, generally described as a contract whereby one person agrees to deliver to another the free possession of a thing in return for a price in money.

Insurance in South Africa describes a mechanism in that country for the reduction or minimisation of loss, owing to the constant exposure of people and assets to risks. The kinds of loss which arise if such risks eventuate may be either patrimonial or non-patrimonial.

<i>Greenman v. Yuba Power Products, Inc.</i>

Greenman v. Yuba Power Products, Inc, was a California torts case in which the Supreme Court of California dealt with the torts regarding product liability and warranty breaches. The primary legal issue of the case was to determine whether a manufacturer is strictly liable in tort when an article he places on the market proves to have a defect that causes injury to a human being. The case was originally heard in a San Diego district court where the verdict was against the manufacturer. This verdict was appealed by the manufacturer to the Supreme Court of California which was presided by Gibson, C. J., Schauer, J., McComb, J., Peters, J., Tobriner, J., and Peek, J., and the opinion was delivered by Judge Roger J Traynor.

Missives of Sale (Scots law)

The missives of sale, in Scots property law, are a series of formal letters between the two parties, the Buyer and the Seller, containing the contract of sale for the transfer of corporeal heritable property (land) in Scotland. The term 'land' in this article includes buildings and other structures upon land.

References

  1. 1 2 Siedel, George (2016). The Three Pillar Model for Business Decisions : Strategy, Law and Ethics. Van Rye Publishing, LLC. pp. 59–60. ISBN   978-0-9970566-0-0. OCLC   952595287.
  2. 1 2 3 4 5 6 Bagley, Constance; Dauchy, Craig (2018). The Entrepreneur's Guide to Law and Strategy (Fifth ed.). Boston, MA: Cengage Learning, Inc. pp. 313–315. ISBN   978-1-285-42849-9.
  3. ↑ "Legal Definition of PUFFING". www.merriam-webster.com. Retrieved 2020-04-12.
  4. 1 2 3 Liberto, Daniel. "Express Warranty Definition". Investopedia. Retrieved 2020-04-13.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.