Uniform Commercial Code

Lesson 8: Warranties in Sales

As part of Article 2: Sales, warranties play a crucial role in sales transactions. This lesson explores the types of warranties recognized under the Uniform Commercial Code (UCC) and their implications for buyers and sellers.

Types of Warranties

The UCC recognizes several types of warranties, including:

Express Warranties
Implied Warranties
Warranty of Title

Express Warranties

Express warranties are explicitly stated by the seller. These can be affirmations of fact, descriptions of the goods, or samples and models provided during the sale.

Example: A seller states, "This car has a new engine." This statement creates an express warranty that the car's engine is new.

Implied Warranties

Implied warranties automatically arise from the nature of the transaction and the relative circumstances of the parties. There are two main types:

Implied Warranty of Merchantability: This implies that goods are fit for ordinary purposes for which such goods are used.
Implied Warranty of Fitness for a Particular Purpose: This applies when the seller knows the specific purpose for which the goods are needed and the buyer relies on the seller's expertise to select suitable goods.

Warranty of Title

Every sale includes a warranty that the seller has good title to the goods and the right to transfer them. This warranty also implies the goods are free from any undisclosed liens or encumbrances.

Visual Guide to Warranties

graph LR A["Types of Warranties"] --> B["Express Warranties"] A --> C["Implied Warranties"] A --> D["Warranty of Title"] C --> E["Implied Warranty of Merchantability"] C --> F["Implied Warranty of Fitness for a Particular Purpose"]

Exclusion and Modification of Warranties

Under the UCC, sellers can limit or exclude warranties under certain conditions. However, disclaimers must be clear and conspicuous.

Note: To disclaim an implied warranty of merchantability, the disclaimer language must mention "merchantability" and, if in writing, be conspicuous. For the implied warranty of fitness for a particular purpose, the disclaimer must be in writing and conspicuous.

graph TD G["Exclusion and Modification of Warranties"] --> H["Clear and Conspicuous"] G --> I["Mention 'Merchantability' for Implied Warranty of Merchantability"] G --> J["In Writing and Conspicuous for Implied Warranty of Fitness"]

Practical Insights

Understanding warranties is crucial for both buyers and sellers. Buyers should be aware of the warranties available to them and sellers should know how to effectively manage warranty obligations.

For Buyers

Always review the warranty information provided by the seller.
Be aware of any disclaimers or limitations on warranties.

For Sellers

Clearly state any express warranties in sales documents.
Ensure any disclaimers or limitations on warranties are clear and conspicuous.
Check out Commercial Law: Selected Statutes for a deeper understanding of UCC provisions.

For more information on related topics, please refer to Lesson 7: Formation of Sales Contracts and Lesson 9: Performance and Breach of Sales Contracts.