Warranties are guarantees that are made by a seller of goods or products about the goods or products. With a warranty, the seller provides an assurance about the quality of the goods, products, or services the seller is providing.
A warranty can be useful to a buyer because, if the product they purchase fails to perform in the way the buyer believed that it would, the seller may be held accountable. There are two general categories of warranties, each which offer certain levels of protections and rights, including:
- Express warranties; and
- Implied warranties.
An express warranty is a type of warranty that is created by the overt actions or words of the seller. Express warranties can be created in several different ways, including by:
- A promise about a product by the seller;
- A description of the product; or
- A model of the product.
An implied warranty is created by law. An implied warranty applies automatically when a seller offers a product for sale, even if that seller says nothing about the way their product will perform.
There are two common types of implied warranties, an implied warranty of merchantability and an implied warranty of fitness for a particular use. An implied warranty of merchantability guarantees that a product is fit to use in the way that it is supposed to be used.
When a product is sold, the implied warranty of merchantability guarantees that:
- The product is fit and suitable and can thus be used for the ordinary purposes that buyers would intend to use it;
- The quality of the product is adequate; and
- The product conforms to any promises made by the manufacturer, usually found on the container or label.
The implied warranty of fitness for a particular use applies when a consumer tells a seller they want to use a product in a specific manner and the seller provides them with a certain product. This warranties that the product the seller provided was fit for the use the consumer had in mind.
An implied warranty of fitness for particular use applies in situations where:
- The seller knows that the buyer will be using a product or good for a particular purpose; and
- The seller is aware that the buyer is relying on their expertise and knowledge about the product’s ability to be used in the way the buyer would like to use it.
Who is Held Responsible for a Breach of an Implied Warranty?
The law will imply a warranty on when the seller or merchant typically deals in the sale of the products or goods that are being sold. Implied warranties law does not apply to an individual who sells a product one time.
For example, a warranty is implied when an automotive store sells a car tire because that automotive store deals with car tires regularly. A warranty would not be implied when, for example, a grandmother sells her old toaster, unless she regularly deals in the sales of old toasters.
Whether a breach of warranty has occurred can be complex to determine and will-be fact specific for each case. An individual who has been sold a defective product that is not what was promised in the warranty may be able to sue for breach of an implied warranty.
This also applies in cases of express warranties. An individual who sues the seller of a product for breach of warranty is required to prove the following elements:
- The buyer purchased the product from the seller;
- The seller made an express warranty in the form of a description of the product, a promise, or a model or sample;
- The product failed to match the standards set by the seller’s promised description; and
- The buyer suffered calculable damages as a result of the breach of warranty.
Can a Seller Disclaim Implied Warranties?
As a general rule, the parties to a commercial contract are permitted to disclaim any warranties for the products being sold. There are, however, several rules that apply to the method of the disclaimer as well as the type of warranty, either express or implied.
Under warranty disclaimer laws, an implied warranty can be disclaimed in most places, although federal restrictions and state regulations restrict disclaimers on consumer goods. In order for a seller to avoid possible liability for an implied warranty, the seller should inform the buyer, in writing, that the seller would not be liable if the product does not perform as the buyer believed it would or is defective.
In the alternative, a seller can label a product indicating that it is being sold “as is” or “with all faults.” This will disclaim an implied warranty but will not dismiss liability for a defective or dangerous product.
Depending on the state, there may be restrictions on selling a product “as is.”
What about “As Is” Products?
The term “as is” comes from the laws of warranties. It is used to mean that the seller of an item has no liability for any defects the product may have.
A buyer who accepts an item “as is” accepts that item in the condition it is in, even if the item is defective, and releases the seller from all liability. This means that the seller provides no written or verbal “as is” products warranty to the buyer.
Instead, the seller disclaims any warranties for the product. In addition, the seller is not responsible for any deficiencies or defects in the item.
If a buyer discovers that an item is defective and needs repair, the buyer will be required to pay for those repairs out of their own pocket. Applying the phrase “as is” to a product when it is sold, however, does not necessarily relieve the seller of all possible liability.
In addition, it does not release the seller from liability if the seller used misrepresentation or fraud to induce the sale. In some cases, a seller will sell their product “as is” in order to disclaim any implied warranties.
However, a seller may still be liable when they sell a product “as is” in certain situations. If the product is dangerous, defective or causes injury to an individual, the seller may still be liable for the damage that was done.
In addition, there are many states that regulate how sellers can sell products “as is.” Any physical item may be sold “as is.”
However, the laws in certain states governing residential real estate and automobiles may limit the “as is” sale of those items. Items that are commonly sold “as is” in some states include:
- Garage sale and other second-hand items;
- Used cars;
- Damaged items; and
- Art and craft items.
Should I Consult an Attorney?
Warranties are governed by both the Uniform Commercial Code and the local state laws. If you are a seller, it may be in your best interests to consult with a consumer lawyer.
Your lawyer can help you determine whether you, as the seller, may be bound by a warranty. Your attorney can also help you review the language on labels so that you are not warranting anything you do not intend to.
If you are a buyer of a product that has not met your expectations, your lawyer can assist you in determining whether the seller of the product has breached a warranty. If so, your lawyer can file a lawsuit on your behalf and help you obtain compensation for your losses.