Chapter 16 - § 16.2 • EXPRESS WARRANTIES

• Jurisdiction: Colorado

§ 16.2 • EXPRESS WARRANTIES

§ 16.2.1-Definition

An express warranty is a contractual obligation that the product or work performed will meet certain standards for a specified period of time. For example, contractors often warrant to repair or replace defects in materials and workmanship for a one-year period. Express warranties "need not be in any particular form" and "may be either written or oral."² To recover for breach of an express warranty, a plaintiff must prove that (1) a warranty existed; (2) the defendant breached the warranty; (3) the breach proximately caused the losses claimed as damages; and (4) timely notice of the breach was given to the defendant.³ In general, whether a particular statement constitutes an express warranty is a question of fact.⁴

Simply repeating a product's performance specifications provided by the manufacturer may constitute an express warranty. For example, an express warranty was found to exist when a realtor provided the buyer of a duplex with a brochure from a manufacturer stating that the solar heating system would reduce the unit's heating and hot water costs by 70 percent.⁵ When several problems with the solar system arose (e.g., the solar collectors reflected sun out of the panels instead of collecting heat), the buyer had a viable claim for breach of an express warranty against the seller.⁶

§ 16.2.2-Types of Express Warranties

Parties have the freedom to contract and create numerous types of express warranties. Therefore, it is not possible to list or categorize all types of express warranties. However, users of form construction contracts should carefully review these agreements to identify the presence of express warranties. For example, AIA Document A201-2017, General Conditions, § 3.5.1, contains several express warranties, including that (1) the materials and equipment furnished under the contract will be of good quality and new (unless the contract documents require or permit otherwise); and (2) the work will conform to the requirements of the contract documents and will be free from defects, except those inherent in the quality of the work the contract documents require or permit.

Construction contracts sometimes contain express warranties concerning the expected standard of performance, such as completion of the project in a "good and workmanlike manner" or in a "first class manner." Under Colorado law, the "good and workmanlike manner" warranty does not require perfection, but rather the "test is reasonableness in terms of what the workmen of average skill and intelligence (the conscientious worker) would ordinarily do."⁷ To show this standard, expert testimony is not required where "the contract itself established both the obligations of the parties and the standard of care to be followed by them in carrying out those obligations."⁸ The reasoning of one Colorado court is instructive on this point: "In contrast to tort law, which imposes duties 'by law without regard to any agreement or contract,' contract law 'is intended to enforce the expectancy interest created by the parties' promises so that they can allocate risks and costs during their bargaining."⁹ If the parties do not allocate those risks and costs in the contract, then courts are very reluctant to do so after the fact. "If parties want defendants to be held to a specific standard of care, they are free to include such a standard as a term of the contract. Absent an agreement by the parties to abide by an industry standard of care, the court may not properly read such a standard of care into the contract."¹⁰

§ 16.2.3-Defenses to Express Warranties

Privity of Contract

An express warranty is a contractual obligation and thus protects persons in privity of contract (i.e., the parties to the contract or their lawful successors and assigns) and those who are third-party beneficiaries of the contract.¹¹ Accordingly, persons lacking contractual privity or status as a third-party beneficiary are generally unable to recover for breach of express warranty.

Integration Clauses

Contracts often include "integration clauses," which, in sum, provide that the terms of the agreement are contained within the four corners of the final, written contract executed by the parties.¹² The existence of such a clause may preclude recovery for claims brought based upon an oral, express warranty. Colorado courts recognize that "[i]ntegration clauses generally permit contracting parties to limit future contractual disputes to issues relating to the reciprocal obligations expressly set forth in the executed doc-ument."¹³ Thus, if the terms of the "contract [are] intended to...