Disclaimer of Warranties; Magnuson-Moss Warranty Act; Third Party Beneficiaries under § 2-318

• Author: autor
• Pages: 102-117

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Chapter 8. Disclaimer of Warranties; Magnuson-Moss Warranty

Act; Third Party Beneficiaries under § 2-318

8.1. Disclaimer of Warranties

8.1.1. Conflicting Warranties. What happens when more than one warranty is given? How are

they to be interpreted together? For example, in a sale there may be (1) an implied warranty of

merchantability, (2) a description of the goods on the package (such as “high gloss enamel

paint”), and (3) an oral affirmation of fact by the salesperson (“this paint will only require one

coat”).

8.1.1.1. Under UCC § 2-317, “[w]arranties whether express or implied shall be construed

as consistent with each other and as cumulative,” unless such construction is

unreasonable. This “cumulative” concept is important. For example, an express warranty

does not displace an implied warranty of merchantability if the two warranties can

reasonably be construed as cumulative or otherwise consistent with each other.

8.1.1.2. In those rare cases where warranties cannot reasonably be construed as

cumulative or consistent, apply the rules of § 2-317 to determine which of the express

warranties will prevail.

Problem 8-1. The packaging on a particular shirt describes the shirt as “wrinkle free.” A card

attached to the shirt reads: “Dry at normal temperature in standard dryer; remove promptly when

drying cycle is finished. Manufacturer makes no warranty that fabric will be wrinkle free if hand-

washed, dried at high or low temperatures, or not removed promptly when drying is finished.”

Can this language be read consistently with “wrinkle free?”

Problem 8-2. A used car dealer sells a car with an express warranty that the seller will repair any

defect to the transmission that arises during the next 90 days. The transmission fails after 120

days. Does the buyer have a claim?

8.1.2. Statutory Disclaimer of Warranties and Statutory Prohibitions. Some jurisdictions

have enacted nonuniform warranty statutes providing that either (1) an implied warranty is not

given in certain transactions, or (2) an implied warranty may not be disclaimed in certain

transactions. An example of the former is Montana Code Annotated § 30-2-316(3), which

provides:

(d) in sales of cattle, hogs, sheep, or horses, there are no implied warranties, as defined in

this chapter, that the cattle, hogs, sheep, or horses are free from sickness or disease;

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(e) in sales of any seed for planting (including both botanical and vegetative types of

seed, whether certified or not), there are no implied warranties, as defined in this chapter,

that the seeds are free from disease, virus, or any kind of pathogenic organisms.

If you were a buyer of cattle in Montana, it would be important to know that the default rule is

that you are not getting an implied warranty. You could then bargain for an express warranty.

An example of the latter is 9A Vermont Statutes Annotated § 2-316(5):

(5) The provisions of subsections (2), (3) and (4) of this section shall not apply to sales of

new or unused consumer goods or services. Any language, oral or written, used by a seller

or manufacturer of consumer goods and services, which attempts to exclude or modify

any implied warranties of merchantability and fitness for a particular purpose or to

exclude or modify the consumer's remedies for breach of those warranties, shall be

unenforceable. For the purposes of this section, "consumer" means consumer as defined

in chapter 63 of Title 9.

Research Assignment 8-1. Check the warranty law of your state to determine whether there are

any nonuniform provisions that provide that (1) an implied warranty is not given in certain

transactions, or (2) an implied warranty many not be disclaimed in certain transactions.

8.1.3. Disclaimer of Express Warranties. Having provided for warranties, implied warranties,

and express warranties in §§ 2-312 through 2-315, the UCC allows, under the principle of

freedom of contract, for the exclusion or modification of such warranties if the requirements

contained in § 2-316 are met. These requirements as to a valid disclaimer vary based upon the

type of warranty involved. As a general rule, it is easier to disclaim an implied warranty than an

express warranty.

8.1.3.1. If an express warranty exists, under § 2-316(1) any words or conduct negating or

limiting the express warranty shall:

First be construed, if reasonable, as consistent with the express warranty;

If not consistent, they are inoperative and will not be effective to disclaim the

express warranty, unless the parol evidence rule dictates a different result. (We’ll

get to the parol evidence rule in Chapter 9.)

For example, if a sales contract describes the vehicle as a “2010 Toyota Matrix” and states

conspicuously, “There are no express warranties,” the seller has nevertheless given an express

warranty that the vehicle is a 2010 Toyota Matrix. To effectively disclaim, the contract would

have to have specific language such as “seller makes no warranty or representation that the year

or model is in fact as described.”