Breach of Warranty

Terms:

Contract Action:
A suit for the breach of a contract (breach of warranty is a contract action).

Express Warranty:
A warrantee created by the overt words or actions of the seller.

Implied Warranty:
A warranty arising because of the circumstances of the sale and not by the seller’s express promise.

While liability based on intentional acts, negligence and strict liability, are all tort actions, liability based on breach of warranty is actually a contract action.

There are two kinds of warranties that purchasers rely on in ascertaining the quality of a product: express warranties and implied warranties.

An express warranty is anything that a seller represents to a buyer about the product. Express warranties essentially become part of the sales contract. Therefore, if a seller breaches an express warranty, the buyer can bring a cause of action against the seller for breach of contract.

The second, and more common, type of warranty is the implied warranty. Implied warranties are essentially implied promises from the seller to the buyer that the product, if used as it is supposed to be used, will not harm the purchaser. The uniform commercial code (UCC), which governs the sale of goods, discusses two implied warranties:

(1)The warranty of fitness for a particular purpose and,

(2) The warranty of merchantability.

The warranty of fitness for a particular purpose basically says that, where a seller knows that the buyer is buying goods for a particular purpose, and the buyer is relying on the seller's judgment in supplying appropriate goods for that particular purpose, there is an implied warranty that the goods the seller sells to the buyer are fit for that purpose. See U.C.C. 2-315 . For example:

Alberto, a long distance runner, goes into a sporting goods store to buy running shoes. The seller, Bill, knows that Alberto is buying shoes for a long distance race and that Alberto is relying on Bill’s judgment to provide him with the shoes most appropriate for long distance running. In such a case there is an implied warranty that the shoes Bill sells Alberto will be fit for long distance running. If it turns out the shoes are not fit for long distance running, Bill has breached an implied warranty and can be held liable.

The warranty of merchantability states that if goods are supplied by a seller who deals in goods of that kind, a warranty is implied that the goods are of an average quality. See U.C.C. 2-314. For example:

Firestone is a car tire salesman. Winston goes to Firestone to buy tires for his car. Because Firestone deals in tires, there is an implied warranty that the tires he sells to Winston are of average quality. If these tires prove unfit, Firestone can be held liable for breach of an implied warranty of merchantability.

While the UCC only applies to the sale of goods, case law has applied these warranties in cases involving the bailment or lease of personal property. However, the warranties will only be implied in contracts for goods and will not be implied in contracts for services.

Further, liability for breach of implied warranties will only be imposed on sellers who regularly deal in the products that caused the injury. Amateur salesmen are under no obligation to fulfill any implied warranties.

As with other theories of products liability, recovery under a breach of warranty theory also involves privity issues. The old rule stated that implied warranties only ran to the immediate buyer so that a middleman could sue a manufacturer for a product defect, and a buyer could sue a middleman, but the buyer could not sue the manufacturer because the buyer did not purchase the product directly from the manufacturer. Please note that this history only applied to implied warranties and not express warranties.

Today, the UCC has adopted two extensions of privity that states have the option of adopting. Thus, depending upon what jurisdiction you are in, privity could extend to

(1) the family members or guests of the immediate buyer that are injured by the product, or

(2) any person who can reasonably be expected to use the product.

See U.C.C. 2-318.

Cause

The defective product, along with being the actual cause of the injury, must also be the proximate cause of the injury. Thus, the defendant will not be liable where an intervening act supercedes the defective product as the proximate cause of the injuries.

Damages

If the plaintiff is successful in his suit based on a breach of warranty theory, the damages he can collect are the same as those he can collect under an ordinary negligence or strict liability theory.

Defenses to Warranty Actions

Generally, contributory negligence is not a valid defense to a breach of warranty suit. However, assumption of the risk, where the plaintiff discovers the defect and unreasonably continues to use the product and is injured, will be considered a valid defense.

Further, the effective use of disclaimers may void certain warranties and result in either a limiting or complete elimination of liability for the manufacturer.

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