Warranty taxonomy
Interpretation · Feb 3
Floor. ~40 min: UCC § 2-313 + Daughtrey + the puffery line. The doctrine the next class assumes you have covered.
Target. ~75 min: Floor + UCC § 2-314 merchantability + Carlson + UCC § 2-315 fitness + synthesis.
(1) Express warranties by the seller are created as follows:
(a) Any affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes part of the basis of the bargain creates an express warranty that the goods shall conform to the affirmation or promise.
(b) Any description of the goods which is made part of the basis of the bargain creates an express warranty that the goods shall conform to the description.
(c) Any sample or model which is made part of the basis of the bargain creates an express warranty that the whole of the goods shall conform to the sample or model.
(2) It is not necessary to the creation of an express warranty that the seller use formal words such as “warrant” or “guarantee” or that he have a specific intention to make a warranty, but an affirmation merely of the value of the goods or a statement purporting to be merely the seller’s opinion or commendation of the goods does not create a warranty.
UCC § 2-313 creates an express warranty THREE ways, each requiring that the seller's words "become part of the basis of the bargain":
Sellers exaggerate. The law draws a line:
The hard cases live in the middle: "This boat is unsinkable." Read as a fact-based assurance about the hull's design, it can be an express warranty (Keith v. Buchanan, the casebook's boat case). Read as exaggerated sales talk, it is puffery.
(1) Unless excluded or modified (Section 2-316), a warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind. Under this section the serving for value of food or drink to be consumed either on the premises or elsewhere is a sale.
(2) Goods to be merchantable must be at least such as
(a) pass without objection in the trade under the contract description; and
(b) in the case of fungible goods, are of fair average quality within the description; and
(c) are fit for the ordinary purposes for which such goods are used; and
(d) run, within the variations permitted by the agreement, of even kind, quality and quantity within each unit and among all units involved; and
(e) are adequately contained, packaged, and labeled as the agreement may require; and
(f) conform to the promises or affirmations of fact made on the container or label if any.
(3) Unless excluded or modified (Section 2-316) other implied warranties may arise from course of dealing or usage of trade.
Every sale of goods by a merchant carries an automatic warranty of merchantability — no words required. § 2-314(2) lists what "merchantable" means. The litigated prongs:
Where the seller at the time of contracting has reason to know any particular purpose for which the goods are required and that the buyer is relying on the seller’s skill or judgment to select or furnish suitable goods, there is unless excluded or modified under the next section an implied warranty that the goods shall be fit for such purpose.
§ 2-315 is the narrowest and most fact-intensive warranty. It arises only when all three hold:
1. The seller has reason to know the buyer's particular purpose — a specific use beyond the goods' ordinary use.
2. The seller has reason to know the buyer is relying on the seller's skill or judgment to select suitable goods.
3. The buyer actually relies on that skill or judgment.
Hiker tells the clerk he needs boots for extreme cold; the clerk picks an uninsulated pair; the boots fail at altitude. Particular purpose, communicated reliance, actual reliance — § 2-315 breached.
How it differs from merchantability: merchantability asks whether goods work for their ordinary use (no seller knowledge needed); fitness asks whether the seller, knowing a special purpose and the buyer's reliance, steered the buyer to the wrong goods.
883 F.2d 287 (4th Cir. 1989)
United States Court of Appeals for the Fourth Circuit
Rule. A limitation of remedies and disclaimer of implied warranties may be unconscionable under UCC § 2-302 when applied to consumer goods with inherent defects known to the seller. The unconscionability inquiry is factual; summary disposition is improper when the seller's knowledge and the impact on consumers raise triable issues.
243 Va. 73, 413 S.E.2d 336 (1992)
Supreme Court of Virginia
Rule. Under UCC § 2-313, a seller's description of goods made part of the basis of the bargain creates an express warranty. The buyer need not show reliance; once the description is part of the bargain, the warranty attaches.
Facts. Tyson, a tobacco farmer, sought a fungicide for black shank disease. The Ciba-Geigy sales rep recommended Ridomil and assured him it would work on tobacco without crop damage. The product label contained general warnings about potential crop damage. Tyson applied as directed; his tobacco was severely damaged. Tyson sues for breach of UCC § 2-315.
Question. Did the rep''s assurances create an implied warranty of fitness for particular purpose? Did the label warnings disclaim it?
Answer. Three § 2-315 elements: (1) seller had reason to know the buyer''s particular purpose: yes, the rep was told specifically about black shank on tobacco. (2) seller had reason to know buyer was relying on seller''s skill: yes, Tyson said he would not have bought otherwise. (3) buyer actually relied: yes. Warranty attaches.
Disclaimer question under § 2-316(2): an implied warranty of fitness may be disclaimed only by clear, conspicuous writing that mentions fitness. Generic label warnings about possible crop damage are not specific enough. The rep''s direct assurances override the boilerplate label. Warranty survives.
Facts. Ardagh sells aluminum cans to American Craft Brewery. The contract has a warranty disclaimer in all caps, same font size as surrounding text, on the second page: "SELLER MAKES NO WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE." The cans contain varnish residue that contaminates the beer. Brewery sues; Ardagh invokes the disclaimer.
Question. Does the disclaimer satisfy § 2-316''s conspicuousness requirement?
Answer. No. § 2-316(2) requires that a disclaimer of merchantability mention "merchantability" and be conspicuous; a disclaimer of fitness must also be in a conspicuous writing. § 1-201(b)(10) defines conspicuous as something a reasonable person ought to notice: bold, contrasting type, larger size, or a clear heading. Capitalization alone, without bold or color or distinct placement or heading, is not enough. The disclaimer fails. Warranty claims proceed.
Drafting lesson: the drafter must visually elevate the disclaimer from the surrounding text. Capitalization without contrast is invisible.
Stretch problems from the chapter.
Rules. UCC § 2-313 (express), UCC § 2-314 (merchantability), UCC § 2-315 (fitness).
Cases. Daughtrey v. Ashe (express / basis of the bargain) · Carlson v. General Motors Corp. (merchantability).
Punchline. Three warranties ride on one sale. Express requires the seller to SAY something that becomes part of the bargain; merchantability and fitness the law writes in by default. The buyer's job is to classify each claimed defect under the right warranty and name the failing element.
Open question. The UCC writes these warranties in by default. The next question: can the seller write them back out? Next class: disclaimers and limitations under §§ 2-316 and 2-302, and the federal floor of the Magnuson-Moss Warranty Act.
Next class: Warranties, Part II: Disclaimers and Magnuson-Moss
_Interpretation_ · Feb 9
Read Ardagh Metal Packaging v. American Craft Brewery with UCC § 2-316 and the Magnuson-Moss Warranty Act. A disclaimer in all-caps but buried in a long form turns out to be the litigation. What does the law require of a seller who wants out of the warranties the UCC writes in by default? Come ready to answer. You may be called.