Chapter 13 Lesson

Chapter 13 Lesson - Chapter 13 Lesson Chapter 13 Lesson...

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Chapter 13 Lesson Chapter 13 Lesson Chapter 13 - Warranty and Liability Issues in the Sale of Products OBJECTIVES: After completing this lesson, the required reading, and the assignments, learners will be able to: 1. Describe the different kinds of warranties and distinguish between express and implied warranties. 2. Discuss enforcement of warranties. 3. Discuss negligence and strict product liability as they apply to the sale of products. 4. Detail the rights and remedies of buyers and sellers . In a product liability case, in which a person or property is damaged by a defective product, the plaintiff has three separate legal theories upon which to rely to recover damages: breach of warranty, negligence, and strict liability. (The plaintiff in such a lawsuit may rely upon any or all of them, depending upon the circumstances.) Each of these theories are covered in this lesson. Warranties Introduction / Definition Warranty law combines elements of both contract law (Chapter 12) and business torts (Chap. 11) to the sale of products. A warranty is basically a promise about the state of goods sold. Since warranty issues involve the sale of goods, the Uniform Commercial Code (UCC) applies. Express Warranties The word "express" is used to describe a warranty in the same way it describes a contract. An express warranty is one that is clearly stated by seller to buyer. It is usually in writing, although it does not have to be. An express warranty may be created in three ways: 1. An affirmation of fact or a promise relating to the goods. "100% cotton" and "Made in the USA" are both statements of fact. "Will be replaced if defective within 90 days of purchase" is a promise relating to the goods. 2. A description of the goods such as "red Converse high-tops." 3. The use of a sample or model in connection with the goods. For instance, if you go to CostCo on Saturday afternoon (although I wouldn't advise it), you might see a salesperson hoping to sell a particular brand of vacuum cleaner by demonstrating its power to suck up nails, sawdust, dirt, etc. Beside her is a stack of boxes of the same model. Her use of the model creates an express warranty to buyers that if they buy that particular vacuum cleaner, they can expect it to operate just as the model in the demonstration operated. Statements of opinion or puffing (mild bragging) do not create an express warranty. For instance, if a shoe salesperson tells you the running shoes you just purchased are the "best running shoes on the market," that statement does not create an express warranty because the term "best" implies an opinion. Finally, remember that to enforce an express warranty, the buyer must show that the warranty was "part of the basis of the
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This note was uploaded on 09/02/2011 for the course GEN BUS 202 taught by Professor Parks during the Fall '11 term at Boise State.

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Chapter 13 Lesson - Chapter 13 Lesson Chapter 13 Lesson...

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