Breaches of Warranty
If the buyer believes that there has been a breach of the implied warranty of merchantability, it is their
responsibility to demonstrate that the good was defective, that this defect made the good not fit for purpose,
and that this defect caused the plaintiff harm. Typical examples of defects are:
•
Design defects
•
Manufacturing defects
•
Inadequate instructions on the use of the good
•
Inadequate warning against the dangers involved in using the good.
Specific Examples of Goods Under the Warranty of Merchantability
Type
Description
Second-
hand
goods
The UCC treats warranties arising for used goods in the same way as warranties arising for
new goods, but second-hand products tend to be held to a lower standard on the warranty of
merchantability.
Buyer-
designed
goods
The same warranties arise for mass manufactured goods as for goods that have been
specified or made to order for the buyer. However, in this case, no warranty of fitness for
purpose can arise since the buyer is using his or her own decisions, skill, and judgment when
making the purchase.
Food
and
drink
The sale of food or drink carries the implied warranty of being fit for human consumption.
Table 8.3
The buyer might intend to use the goods purchased for a different purpose than that for which it was sold. In
this case, the implied warranty holds only if the buyer relies on the seller’s skill or judgment to select the
product, the buyer informs the seller at the time of purchase of his or her intention for the use of the good,
and the buyer relies on the seller’s judgment and skill in making the final choice. If the seller is not made
aware of the buyer’s true intention, or does not offer his or her skill and judgment in aiding the sale, then
warranty of fitness for a particular purpose does not arise. For this reason, it is common for vendors to include
provisions in the average terms and conditions of sale with regard to the true and intended purpose of use.
Warranty of Title
By the mere act of selling, the vendor implies a warranty that the title is good and that the transfer of title is
lawful. In addition, the act of the sale creates a warranty that the goods shall be delivered free from any lien of
which the buyer was unaware. In some circumstances, the warranty of title can be excluded from the contract
documents. For instance, when the seller makes the sale in a representative capacity (e.g. as an executor of an
estate), then a warranty of title will not arise.
Chapter 8 Sales Contracts
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