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WARRANTIES AND PRODUCTS LIABILITY

WARRANTIES AND PRODUCTS LIABILITY. WARRANTIES under the UCC. An assurance from seller that goods meet certain standards May be Express or Implied May relate to ownership or quality Part of the sales contract. WARRANTIES OF QUALITY. Express Warranties May include:

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WARRANTIES AND PRODUCTS LIABILITY

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  1. WARRANTIES AND PRODUCTS LIABILITY

  2. WARRANTIES under the UCC • An assurance from seller that goods meet certain standards • May be Express or Implied • May relate to ownership or quality • Part of the sales contract

  3. WARRANTIES OF QUALITY • Express Warranties May include: • all affirmations of fact or promises made about the goods • description of goods • model or sample of goods

  4. Warranty must have been part of the Basis of Bargain

  5. Plaintiff must prove • Seller made an express warranty • The express warranty was breached • The breach caused injury to plaintiff

  6. Implied Warranties • Merchantability: fit for the ordinary purpose for which the product was intended • Must prove: • Merchant sold product • Product was not merchantable at the time of sale • Plaintiff was injured by the product • Defect was the cause of the injury

  7. Implied Warranties • Fitness for a Particular Purpose • Must prove: • B has a special need • S has reason to know of B’s particular purpose • S makes statement that goods will the serve this purpose • B relies on S’s skill & judgment to purchase

  8. Comment 2, §2-315: A "particular purpose" differs from the "ordinary purpose" for which the goods are used in that it envisages a specific use by the buyer which is peculiar to the nature of his business whereas the ordinary purposes for which goods are used are those envisaged in the concept of merchantability and go to uses which are customarily made of the goods in question. For example, shoes are generally used for the purpose of walking upon ordinary ground, but a seller may know that a particular pair was selected to be used for climbing mountains.

  9. Implied Warranty could also arise from: • Course of dealing Or • Usage of trade

  10. Inconsistent warranties – Priorities: • Fitness for a particular purpose • Express warranty • Custom or usage of trade • Merchantability

  11. Disclaimers are implied by • Exclusionary language • Inspection of goods • Condition is consistent with course of dealing or trade usage

  12. LIABILITY TO THIRD PARTIES • Common Law: Privity of contract • UCC alternatives-who can sue? • Buyer, family, guests in home, • Natural persons reasonably expected to use (personal injury only) • Any person (including corporation) who would reasonably be expected to use (personal injury and property damage)

  13. TORTS ACTIONS USED IN PRODUCTS LIABILITY CASES • Negligence • Strict Liability

  14. NEGLIGENCE • Elements • Duty to use reasonable care • Breach of duty • Injury or loss • Proximate cause • Defenses • Assumption of risk • Contributory negligence • Comparative negligence

  15. STRICT LIABILITY §402A of the Restatement of Torts 2d • Elements • Defective product • Unreasonably dangerous • Defective at time of sale • Condition is substantially unchanged • Seller is in the business of selling the product • Injury or loss • Proximate cause • Defenses • Assumption of risk • (Some states) comparative negligence

  16. WEBB V. ZERN • Webb purchased a quarter-keg of beer from distributor, Zern. • That same day his brother tapped the keg & about a gallon of beer was drawn from it. • Later that evening when Webb entered the room, the keg exploded, severely injuring him. • Which tort actions?

  17. WEBB V. ZERN- Add to the facts • Assume the manufacturer of the keg is out of business. • This is an action against the distributor. • Assume the keg was manufactured in a defective manner. • Assume this was not the distributor’s fault • He handled the keg in a proper manner • He could not have prevented this. • Latent defect-inspection would not have revealed. • Which tort actions?

  18. WHAT MAKES A PRODUCT DEFECTIVE? • A manufacturing defect • A design defect • Defects caused by inadequate warnings or instructions

  19. WARNINGS, LABELS AND INSTRUCTIONS • Courts have held that a product is defective if adequate warnings are not provided with the product upon sale. • This extends to all written materials connected with the product including instructions for use and maintenance.

  20. There is a clear duty to warn of a danger in that product if: • 1. The product is dangerous • 2. This fact is or should be known to the manufacturer or seller • 3. The danger is not one which is obvious or known, or readily discoverable by the user and is not one which arises only because the product is put to some unforeseeable unexpected use

  21. PRODUCTS LIABILITY PROBLEM • Waldo purchased a toaster from Acme Appliances. It was manufactured by Testy Toaster Co. When Waldo used the toaster, it caught fire, causing injury & damage. From whom can Waldo recover in a negligence action? A strict liability action? A breach of warranty action in each of the following independent scenarios? • Assume the toaster was manufactured in a defective manner, and that Acme carefully inspected the toaster, handled it properly, and did nothing to alter its condition.

  22. Assume that the toaster was manufactured properly, but Acme made adjustments to it. • Assume the toaster was manufactured properly, and Acme made no adjustments to it, but Waldo adjusted it so that it would get hotter. • You think this is Waldo’s fault, but is there still an argument he can make?

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