University of Georgia                                                        Terry College of Business

	LS 470 - Business Law I

	Dr. B-A's Word Outlines

                                               WARRANTIES

Pty injured by defective gd may sue on theory of neg, prods liab. 
 or br of warr
Gen, can sue in K or tort
  both theories can be argued in one suit
Br of warr is K theory
No need to prove neg on pt of S or others
Express or implied promises by S to B re gds
If implied, law imposes warranty regardless of pty's acts
If warranty breached, B has c/a agnst S for br of warr
May also cover injuries to 3d pties not pty to K
UCC rems for br may be modified
  unconbl to limit conseq dam for injury related to consumer gds
B must give S notice of br 
   w/i reasbl time of discov or 
   w/i reabl time w/i which it shdv been discovd 
   may be oral or written notice of defect
   bringing lawsuit isn't notice
No privity req'd for br actn
 horizontal privity-to whom does warr extend
    gen extended to 
         anyone in the family or household of B, or 
         guest in home 
           if reasbl to expect guest to use gd
 vertical privity-who can be sued for br
    gen can sue anyone in chain of distribution
Express warranties
 express reps or promises made by S to B as pt of sale of gds
 no formal words nec
 no specific intent to make exp warr nec
 incls all specific stmts re gd, except puffing
   may be brochures, samples, descripts, pics, blueprints, 
    diagrams
S warrs that gds will conform to express stmts made
  mere stmts of opinion aren't exp warrs
     opinion of experts may be exp warr, i.e., jeweler
 if warr given, then a stmt says all warrs excluded, disclaimer 
  ineffective
Implied warranties (3)
 come about by operation of law
 incl title, merchantability and fitness for a particular purp
Title
1.  S warrants he's conveying good title to B
    S warrants there are no liens or encumbrances on gds
      i.e., that no one else has title & can take them fr B
    if S sells w/o the warr, & title disturbed, then no br
       warr can be excluded or modified
       lang must be specific so B knows title bought
       judicial & estate executor sales don't imply title 
        guarantees
       GFPV in voidbl sale can either sue based on
        status as GFPV, or
        br of implied warr of title
    merch S also warrs agnst patent or othr 3d pty rt infringmnt
2.  Merchantability
    given by merch dealing in gds of the kind
    warrs that gds are
       fit for ord purp for which gds are used
          not lim to use by immediate B
       of even kind among the units or w/i fungible gds
       adeqly packaged, labled or contained as req'd by agmt 
          where necess bec of gds
    liab incls
      direct econ loss
        diff betw gd as is & as shd be
        cost of repairs or replacement
      personal injury
      prop dam
    applies to new & used gds
    B must show
       defect present at time of sale
       defect proximately caused injury or loss
Gen word "merbty" must be incl in exclusn or modif, 2B effectv 
  if exclusn in writing, must be conspicuous
  may be exluded by oral agmt or course of perf
  no warr if 
    S demands B inspect &
    B couldn've seen defects upon inspectn & didn't
    B failed to inspect
3.  Fitness for a particular purpose
      S must have reason to know of partic purp B needs gds for
      B need not actually say purp or reliance if circums show S 
       wd know
B must be relying on S's skill or judgment to select suitable gds
applies to merchs & nonmerchs
  gen only merchs possess the special skill or judgmt
br may result in 
   disaffirmance
   money dams   
Exclusn must be 
  conspicous
  in writing