THE IMPORTANCE OF WARRANTIES

1
THE IMPORTANCE OF WARRANTIES

• PRACTICAL LIVING/VOCATIONAL STUDIES
• NINTH GRADE
• CHRISTY PUCKETT/GRAVES COUNTY HIGH SCHOOL
• PL-H-3.3.1

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WARRANTY

• An agreement to be responsible if a good or
  service is not as represented

3
EXPRESS WARRANTY

• A STATEMENT OF FACT EXPRESSED BY THE SELLER FOR
  THE PURPOSE OF HAVING THE BUYER MAKE A PURCHASE
• OFTEN FOUND IN SALES BROCHURES, CIRCULARS, AND
  ADVERTISEMENTS

4
AN EXPRESS WARRANTY COMES ABOUT IN ANY OF THREE
WAYS

• STATEMENT OR PROMISE BY SELLER
• DESCRIPTION OF GOODS
• SAMPLE OR MODEL

5
MAGNUSON MOSS WARRANTY ACT

• FEDERAL LAW THAT PROVIDES WRITTEN WARRANTIES MUST
  FULLY DISCLOSE IN SIMPLE, READILY UNDERSTANDABLE
  LANGUAGE THE TERMS AND CONDITIONS OF THE WARRANTY

6
TWO TYPES OF WRITTEN WARRANTIES

• FULL ONE IN WHICH A DEFECTIVE PRODUCT WILL BE
  FIXED OR REPLACED WITHIN A REASONABLE TIME AFTER
  A COMPLAINT HAS BEEN MADE
• LIMITED WARRANTY THAT LIMITS ON WHAT IS
  COVERED / HAS LIMITATIONS

7
IMPLIED WARRANTIES

• BY THE NATURE OF THE TRANSACTION, OR BY THE
  WARRANTIES IMPLIED BY THE ACTS OF SURROUNDING
  CIRCUMSTANCES
• CAN OCCUR IN 1 OF 2 WAYS

8
WARRANTY OF FITNESS

• CREATED WHEN THE SELLER KNOWS ABOUT A PARTICULAR
  PURPOSE FOR WHICH GOODS ARE NEEDED
• SELLER ADVISES THE BUYER AND BUYER RELIES ON THE
  EXPERTISE
• EXISTS EVEN IF SELLER IS A NONMERCHANT

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WARRANTY OF MERCHANTABILITY

• GIVEN ONLY BY A MERCHANT(SOMEONE WHO DEALS IN
  GOODS BEING SOLD IN THE ORDINARY COURSE OF
  BUSINESS OR HAS KNOWLEDGE OR SKILL PERTAINING TO
  THE GOODS)
• MERCHANT WARRANTS THAT THE GOODS ARE MERCHANTABLE

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TO BE MERCHANTABLE, GOODS MUST

• PASS WITHOUT OBJECTION UNDER CONTRACT DESCRIPTION
• BE FIT FOR THE PURPOSE THE GOODS WERE TO BE USED
• BE ADEQUATELY CONTAINED, PACKAGED, AND LABELED
• CONFORM TO STATEMENTS MADE ON CONTAINER OR LABEL

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WARRANTY OF TITLE

• WHENEVER GOODS ARE SOLD, THE SELLER WARRANTS THAT
  THE TITLE BEING CONVEYED IS GOOD
• GOODS SHOULD BE DELIVERED FREE OF ANY FINANCIAL
  OBLIGATIONS ABOUT WHICH THE BUYER HAD NO
  KNOWLEDGE

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TO EXCLUDE A WARRANTY

• FOR ANY IMPLIED WARRANTY OF FITNESS MUST BE IN
  WRITING AND CONSPICOUS
• FOR A WARRANTY OF MERCHANTABILITY, THE WORD
  MERCHANTABILITYMUST BE USED
• AS IS OR WITHOUT ALL FAULTS ALSO EXCLUDES THE
  WARRANTY

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REMEDIES

• ASK FOR A REFUND
• FIX THE DEFECT
• RECEIVE A NEW PRODUCT
• SUE FOR THE PURCHASE PRICE PLUS DAMAGES