There are three kinds of warranties. First, express warranties. These consist of statements made by a seller of the quality of the goods or services (e.g. this car is a 2013 model). Second, implied warranties from a merchant. These are warranties where the merchant (worker of a specific field of goods) implies that the goods are fit for their use. Third, there are implied warranties related to the specific item. This third version comes into effect when the buyer reasonably relies on the seller’s judgment to select the item (and the seller knows of that reliance).
Bayliner Marine Corp. v. Crow
509 S.E.2d 499 (Vir. 1999).
Crow won in trial court and Bayliner appealed.
Question
Did the manufacturer breach the warranty?
Rule
Express warranty – A statement regarding the nature or quality of the product.
Merchant implied warranty – A merchant’s statement about the product for it’s intended purpose.
Fit for use implied warranty – An agreement between the seller and buyer where both know of the desired purpose and use of the product.
Holding
There was no express or implied warranty. Reversed.
Facts
Crow bought a boat. While he was examining the boat, he asked about the speed of it. The seller did not know the speed so he consulted the users manual. This manual shared the components of boats of the same model with different equipment and the speed of each. As a result, he expected the boat to travel up to 30 miles per hour. The only issue was, when he put equipment onto the boat, it only reached a top speed of 13 miles per hour (17 after numerous repairs). The manual had a disclaimer saying that the boats described were there for comparative purposes only and that those speeds were discovered with the prime equipment and weather conditions.
Analysis
Crow argues that the seller breached express and implied warranties. The court disagrees because the nature of the purchase did not match up with the nature of the use.
Additional Notes
Caveat emptor – let the buyer beware. This was the old rule where the only times a warranty was provided was if the business provided it. This is no long the case.
UCC 2-313 Express Warranties
“Any affirmation of fact or promise . . . which is made part of the basis of the bargain creates an express warranty that the goods shall conform to the affirmation or promise.”
“A statement purporting to be merely the seller’s opinion or commendation of the goods does not create a warranty.”
An express warranty is when the seller guarantees the quality or feature of the product. Here, there was no express warranty because all “express statements” were related to a boat that was similar, but not his boat. Additionally the statement that said “delivers the kind of performance you need to get to the prime offshore fishing grounds” is not an express warranty. This is simply advertising language (puffing) stating the sellers opinion (See the second quote above).
UCC 2-314 Implied warranty of merchantability
“Goods are merchantable if they are such as would ‘pass without objection in the trade,’ and ‘are fit for the ordinary purposes for which such goods are used.'”
When a merchant deals with the same goods repeatedly, it is expected that those goods meet quality requirements (pass without objection in the trade). Here, the purpose is not to go 30 miles per hour. Instead, the goal of the boat is to float and move from place to place. If the boat sunk, then it would have failed.
The takeaway here is that it does not apply to specialized requirements (going 30 miles per hour when everyone else uses it around 15 without complaint).
The above is a two prong test. First, we have to see if the product would pass a quality test. Second, we have to see what people use the product for to determine the purpose of the product.
UCC 2-315 Implied warranty of fitness for a particular purpose
“Where the seller . . . 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 . . . .”
This is more specific than other implied warranties. It requires the buyer to state their purpose of the purchase. As a result, the seller finds a product that meets this purpose.
- You have to state your purpose
- You have to tell the buyer that you are relying on their expertise.
- Additionally, you have to tell the buyer that you do not have the expertise to pick it.
- Finally, the buyer chooses the product specifically to meet that purpose.
Here, Crow did not state that the purpose was to go 30 miles per hour and did not rely on the seller to pick out a boat to fit that purpose. In other words, there was no evidence that there was an implied warranty of fitness for a particular purpose.
One thing to note is that you do not need to be a merchant for this to apply. Instead, you only need to have specialized knowledge from which the buyer relies.
Speight v. Walters Development Co.
744 N.W.2d 108 (Iowa 2008).
Speights are the plaintiffs. Lost in trial court and appealed.
Question
Can a remote, third-party, purchaser still have an implied warranty claim?
Rule
Implied warranty for workman labor can be extended to subsequent purchasers.
Holding
Speights were a subsequent purchaser whose statute of limitations had not run.
Facts
Walters had built a home in 1995 for a homeowner. That home owner sold it, then those homeowners sold to the Speights in 2000. Noticing mold and that the roof was not built properly, the Speights sued Walter for breach of warranty.
Walter countered saying that the warranty should only extend to the first owners and that the statute of limitations had run.
Analysis
The reason of the workman warranty is to protect homeowners from poor home construction. It does so by holding general construction workers accountable for their home building. A subsequent homeowner is in the same need of protection as the first purchaser. Therefore, the warranty extends to future purchasers as long as the statute of repose has not run.
The statute of repose begins at the time the home was finished. Additionally, the statute of limitations starts when the subsequent purchaser had reason to discover the damage (at the time of purchase).
Additional Notes
Note, this is not under the UCC.
The suit here is for a breach of implied warranty of workmanlike construction.
Here, the purpose of a workmanlike construction warranty is to provide equality for the home purchaser and the builder. Additionally, the court determines that this should extend to remote homebuilders. As a result, the statute of limitations starts to run when they had an opportunity to discovery the damage.
Disclaimer
The content contained in this article may contain inaccuracies and is not intended to reflect the opinions, views, beliefs, or practices of any academic professor or publication. Instead, this content is a reflection on the author’s understanding of the law and legal practices.
