Reading: Warranties

Types of Warranties

A warranty is a guarantee that a product meets certain standards of performance. In the United States, warranties are established by the Uniform Commercial Code (UCC), a system of statutes designed to make commercial transactions consistent in all fifty states. Under the UCC, a warranty is based on contract law and, as such, constitutes a binding promise. If this promise—the promise that a product meets certain standards of performance—isn’t fulfilled, the buyer may bring a claim of product liability against the seller or maker of the promise.

Express Warranties

An express warranty is created when a seller affirms that a product meets certain standards of quality, description, performance, or condition. The seller can make an express warranty in any of the following three ways:

  1. By describing the product
  2. By making a promise of fact about the product
  3. By providing a model or sample of the product

Sellers aren’t obligated to make express warranties. When they do make them, it’s usually made through advertisements, catalogs, and so forth, but they needn’t be made in writing; they can be oral or even inferred from the seller’s behavior. They’re valid even if they’re made by mistake.

Implied Warranties

There are two types of implied warranties—that is, warranties that arise automatically out of transactions:

  1. In making an implied warranty of merchantability, the seller states that the product is reasonably fit for ordinary use. In selling you a ladder, for example, Ladders ’N’ Things affirms that it satisfies any promises made on its packaging, meets average standards of quality, and should be acceptable to other users.
  2. An implied warranty of fitness for a particular purpose affirms that the product is fit for some specific use. Let’s say, for example, that you had asked the manager at Ladders ’N’ Things whether the ladder you had in mind was fit for holding a scaffolding platform for painting a house; if the manager had assured you that it was, he would have created an implied warranty of fitness for a particular purpose.

Table 1, “What Warranties Promise,” below provides a more complete overview of the different types of warranties, including more-detailed descriptions of the promises that may be entailed by each.

Type of Warranty Means by Which the Warranty May Be Created Promises Entailed by the Warranty
Express warranty Seller confirms that product conforms to the following:

  • All statements of fact or promise made about it
  • Any description of it
  • Any model or sample of it
 Product meets certain standards of quality, description, performance, or condition
Implied warranty of merchantability Law implies certain promises Product:

  • Is fit for ordinary purposes for which it’s used
  • Is adequately contained, packaged, and labeled
  • Is of an even kind, quality, and quantity within each unit
  • Conforms to any promise or statement of fact made on container or label
  • Passes without objection in the trade
  • Meets a fair, average, or middle range of quality
Implied warranty of fitness for a particular purpose Law implies certain promises Product is fit for the purpose for which the buyer acquires it if

  • Seller has reason to know the particular purpose for which it will be used
  • Seller makes a statement that it will serve that purpose
  • Buyer relies on seller’s statement and purchases it

Source: Adapted from Henry R. Cheesman, Contemporary Business and Online Commerce Law: Legal, Internet, Ethical, and Global Environments, 5th ed. (Upper Saddle River, NJ: Pearson Education, 2006), 366.

What kinds of warranties did you receive when you bought your ladder? Naturally, you received implied warranties of merchantability, which arose out of your transaction with Ladders ’N’ Things. You also received an implied warranty of fitness for a particular purpose (that the ladder would hold a scaffolding platform) and an express warranty (that it would a bear a weight of three hundred pounds per rung).

Do you have a case for product liability on grounds of breach of warranty? Arguably, says your lawyer, Ladders ’N’ Things breached an implied warranty of merchantability because it sold you a ladder with a defect (corrosion damage) that made it unfit for ordinary use. It’s also possible that the retailer breached an express warranty—the manager’s assurance that the ladder would bear a weight of three hundred pounds per rung. First, the court will want to know whether that express warranty was a contributing factor—not necessarily the sole factor—in your decision to buy the ladder. If not, you probably can’t recover for breach of the express warranty.

Second, there’s the complex issue of whether that express warranty was tantamount to an assurance that the ladder could be used for such a job as roofing. Apparently your uncle thought it was, but that will be a matter for your lawyer to argue and the court to decide. It will all depend, in other words, on the flexibility and fairness of the legal system.