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Express and Implied Warranties Under the Uniform Commercial Code

By: Thomas W. Hartmann
The Hartmann Law Firm LLC

TheHartmannLawFirm.com; Tom.Hartmann@Gmail.com; 908 769 6888

Express Warranties. When we speak of a "warranty," we usually refer to what the Uniform Commercial Code or U.C.C. calls an "express warranty." Express warranties are affirmative promises about the quality and features of the goods being sold. Claiming paint dries "in five minutes" or that tires will last at least 60 months or that a car can get from 0 to 60 in five seconds are types of express warranties. Express warranties also include descriptions of the goods or samples shown to the buyer. If the buyer is shown a showroom sample of the car he wants to buy, this sample is an "express warranty" that the car the buyer is to purchase is of the same type and quality as the sample.

Implied Warranties. These are not overt or specific as express warranties. The two implied warranties under the U.C.C. are the warranty of "merchantability" of the goods being sold and the warranty that the goods are "fit for a particular purpose."

Merchantability. Under the U.C.C.'s definition of "merchantability," goods must be at least of average quality, properly packaged and labeled, and fit for the ordinary purposes they are intended to serve. For example, a lawn mower must be of at least average quality as compared to other lawn mowers in the same price range, it must cut grass, and should not say it is a John Deere when it is not.

Also, the implied warranty of merchantability is limited to a seller of "goods of that kind." This means the merchant usually sells these kinds of goods in the marketplace. A seller does not offer an implied warranty of merchantability when he sells goods of a kind that he does not normally sell. For example, the lawn mower salesman warrants lawn mowers, but not the excess filing cabinets he sells because the office has decided to go paperless.

Fitness for a Particular Purpose. This implied warranty applies if the seller knows or has reason to know that the buyer will be using the goods (including equipment) he is buying for a certain purpose. If the seller knows the purpose for which the buyer intends to use the goods, the seller impliedly warrants that the goods will be suitable for that specific purpose. For example, a wood chipper salesman may sell a small wood chipper that is perfectly suitable for cleaning up back yard brush, and, therefore, is merchantable. But if the salesman knows the buyer is an industrial tree cutting service that needs to chip tree trunks and large branches, the salesman also impliedly warrants that the chipper is suitable for heavy industrial use. The same would apply to a watch salesman who sells a watch to a track coach who needs a stop watch; or to a car salesman who sells a tiny electric car to a race car driver.

The rationale behind the implied warranty of fitness for a particular purpose is that buyers typically rely on the seller's skill and expertise to help them find the specific goods that meet their unique need.

Disclaimers. Because express and implied warranties can be unclear or ambiguous, and because contracts are designed to resolve such ambiguity, the U.C.C. allows buyers and sellers to clarify their positions. The U.C.C. specifically allows sellers to disclaim both express and implied warranties on goods they sell, within certain limits. The U.C.C. provides some specific rules regarding how warranties are disclaimed, but also leaves room for reasonable business sense.

Generally, a seller who wants to disclaim U.C.C. warranties must do so specifically. A general statement that there are "no warranties, express or implied" is usually ineffective. An express warranty must be expressly disclaimed.

A disclaimer as to the implied warranty of merchantability must specifically mention "merchantability" in the disclaimer. Finally, a seller may disclaim all implied warranties by stating that the good is being sold "as is," "with all faults," or by stating some other phrase that makes it plain to the buyer there are no implied warranties.

The U.C.C. also requires all disclaimers of implied warranties to be in writing. But, a disclaimer hidden in the fine print will not be enforced as the disclaimer must be conspicuous. A section of a contract is conspicuous if it clearly stands out from the rest of the contract and draws the eye of the reader. Common ways to make contract provisions conspicuous is to put them in bold type, different colored type, larger type, or in all capitals.

But, even if you try to disclaim all warranties, other laws may come into play, particularly to protect consumers. The New Jersey Consumer Fraud Act, which is particularly powerful, may come into play to provide some protections to consumers, depending on the circumstances. Also, keep in mind that the warranties and disclaimers discussed in the Uniform Commercial Code generally apply to the sale of goods or products, not the sale of services.

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