Week 2 Project BUS3055

Additional Materials

View the PDF transcript for Remedies for Breach of Contract (media/transcripts/Week_2/SUO_BUS3055_W2_L3%20Warranties%20and%20Remedies.pdf? _&d2lSessionVal=EMn4rxWxXilKwFSCbq2Mk8ydE&ou=78037)

 

Warranties, Product Liability and Remedies

A warranty is an assurance or guarantee by the seller or lessor of certain facts concerning the goods being sold or leased. If the seller breaches a warranty, the buyer can recover damages or rescind the contract. There are two primary types of warranties, express and implied.

Express warranties encompass statements of fact or promises of performance that are expressly agreed to by the parties and become the basis of the buyer’s bargain. Only statements of fact create express warranties.

Implied warranties are not expressly made by the seller but inferred at law based on the conduct of the parties, circumstances or nature of the transaction.

Product Liability

In addition to the warranties, recovery in a product liability case may be based on negligence, fraud or strict tort liability.

Negligence

An injured party may recover if they can show that the seller was negligent in preparing or manufacturing the article or failed to provide appropriate instructions or warnings of danger.

Fraud

A party may recover if the distributor or manufacturer makes false statements with knowledge they of the falsehood or with reckless indifference to their truthfulness.

Strict Tort Liability

A party may recover under strict tort liability if the product was defective and unreasonably dangerous at the time it left the control of the manufacturer or distributor and causes harm. The claimant may be a purchaser, consumer or third party and need not show intent or knowledge. However, the seller can use the defense of assumption of risk.

Remedies for Breach

When one of the parties breaches the contract, the other party has various remedies under the UCC, depending on the circumstances involved. To determine which remedy applies, it is important to know which party has possession of the goods, the status of goods in transit and whether the buyer has rejected or accepted the goods.

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