Brandt v boston scientific corporation

Business Law Tenth Edition Chapter 21 Warranties Copyright © 2019, 2016, 2013 Pearson Education, Inc. All Rights Reserved. Learning Objectives (1 of 2) 21.1 Describe express warranties and distinguish them from statements of opinion. 21.2 List and describe implied warranties. 21.3 Describe the implied warranty of merchantability. 21.4 Describe the implied warranty of fitness for human consumption. 21.5 Describe the implied warranty of fitness for a particular purpose. 21.6 Identify warranty disclaimers and determine when they are lawful. Copyright © 2019, 2016, 2013 Pearson Education, Inc. All Rights Reserved. Learning Objectives (2 of 2) 21.7 Describe the protections provided by Magnuson-Moss Warranty Act. 21.8 List and describe warranties of title and possession. Copyright © 2019, 2016, 2013 Pearson Education, Inc. All Rights Reserved. Introduction • Caveat emptor: Let the buyer beware – Governed law of sales and leases for centuries • Warranties: Buyer’s or lessee’s assurance that the goods meet certain standards – Based on contract law may be either expressly stated or implied by law Copyright © 2019, 2016, 2013 Pearson Education, Inc. All Rights Reserved. Express Warranty (1 of 3) • Created when seller/lessor affirms goods meet certain standards of quality, description, performance, or condition • Can be written, oral, or inferred from seller's conduct • Can be made by mistake because the seller or lessor does not have to specifically intend to make the warranty • Sellers and lessors are not required to make express warranties Copyright © 2019, 2016, 2013 Pearson Education, Inc. All Rights Reserved. Express Warranty (2 of 3) • Created when seller/lessor indicates goods will conform to: – All affirmations of fact or promise made about the goods – Any description of the goods – Any model or sample of the goods Copyright © 2019, 2016, 2013 Pearson Education, Inc. All Rights Reserved. Express Warranty (3 of 3) • Recovery for breach of warranty – Warranty must be a contributing factor that enticed buyer/lessee to enter the contract – Retailer is liable for the express warranties made by manufacturers of goods it sells • Statement of opinion: Commendation of goods, made by a seller or lessor, that does not create an express warranty Copyright © 2019, 2016, 2013 Pearson Education, Inc. All Rights Reserved. Damages Recoverable for Breach of Warranty • Compensatory damages: Difference between value of goods as warranted and the actual value of the goods accepted at the time and place of acceptance – Purchaser or lessee can recover for personal injuries that are caused by a breach of warranty Copyright © 2019, 2016, 2013 Pearson Education, Inc. All Rights Reserved. Implied Warranties • Not expressly stated in the sales or lease contract but instead are implied by law • Forms – Implied warranty of merchantability – Implied warranty of fitness for human consumption – Implied warranty of fitness for a particular purpose Copyright © 2019, 2016, 2013 Pearson Education, Inc. All Rights Reserved. Implied Warranty of Merchantability (1 of 2) • Unless properly disclosed, a warranty that is implied that sold or leased goods are fit for the ordinary purpose for which they are sold or leased, as well as other assurances • Standards – Goods must be fit for the ordinary purposes for which they are used – Goods must be adequately contained, packaged, and labeled Copyright © 2019, 2016, 2013 Pearson Education, Inc. All Rights Reserved. Implied Warranty of Merchantability (2 of 2) – Goods must be of an even kind, quality, and quantity within each unit – Goods must conform to any promise or affirmation of fact made on the container or label – Quality of the goods must pass without objection in the trade – Fungible goods must meet a fair average or middle range of quality Copyright © 2019, 2016, 2013 Pearson Education, Inc. All Rights Reserved. Case 21.1: Implied Warranty of Merchantability • Case – Osorio v. One World Technologies, Inc. – 659 F.3d 81, 2011 U.S. App. Lexis 20174 (2011) – United States Court of Appeals for the First Circuit • Issue – Did Ryobi breach the implied warranty of merchantability? Copyright © 2019, 2016, 2013 Pearson Education, Inc. All Rights Reserved. Case 21.2: Implied Warranty of Merchantability • Case – Geshke v. Crocs, Inc. – 740 F.3d 74 (2014) – United States Court of Appeals for the First Circuit • Issue – Did Crocs, Inc. breach the implied warranty of merchantability of the safety of its CROCs footwear and fail to warn of such danger? Copyright © 2019, 2016, 2013 Pearson Education, Inc. All Rights Reserved.