WARRANTIES AND PRODUCTS LIABILITY

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WARRANTIES AND PRODUCTS LIABILITY
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WARRANTIES

• An assurance from seller that goods meet certain
  standards
• May be Express or Implied
• May relate to ownership or quality
• Part of the sales contract

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IMPLIED WARRANTIES OF TITLE

• Warranty of Good Title
• No liens
• No infringements

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WARRANTIES OF QUALITY

• Express Warranties May include
• all affirmations of fact or promises made about
  the goods
• description of goods
• model or sample of goods

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Warranty must have been part of the Basis of
Bargain
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Plaintiff must prove

• Seller made an express warranty
• The express warranty was breached
• The breach caused injury to plaintiff

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KEITH V. BUCHANAN

• Brian Keith, the actor, attended a boat show in
  Long Beach, California.
• At the show he obtained literature about a
  sailboat called
• "Island Trader 41 from a sales representative
  of Buchanan, a seller of sailboats.
• One brochure described the vessel as a "picture
  of sure footed
• worthiness." Another brochure called the
  sailboat "a carefully well-equipped and seaworthy
  live-aboard vessel."
• Keith was looking for a vessel for a long
  distance ocean going cruise, so he purchased the
  Island Trader 41.
• After it was delivered, a dispute arose in
  regards to its seaworthiness.
• Keith sued for breach of warranty.
• The defendant claimed that the statements were
  just opinions, puffing and sales talk.

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WAT HENRY PONTIAC V. BRADLEY

• In October of 1944, Mrs. Bradley went to Wat
  Henry Pontiac to purchase a used car. She dealt
  with the used car sales manager. She later
  testified that she asked many questions and was
  assured that the car was in good condition. The
  seller allegedly said, "This is a car I can
  recommend" and "It is in A-I shape."
• Mrs. Bradley told him that she had to travel to
  Mississippi with a seven month old child to see
  her husband, and she asked for a test drive. The
  manager said that the car was mechanically
  perfect, but because of wartime gas rationing,
  she could not take a test drive.
• She bought the car. Several days later on her
  way to Mississippi, the car broke down and
  required extensive repairs.
• The sales manager, a former mechanic, testified
  that he gave no warranties and explained to Mrs.
  Bradley that there were no warranties on the car.

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Implied Warranties

• Merchantability fit for the ordinary purpose for
  which the product was intended
• Must prove
• Merchant sold product
• Product was not merchantable at the time of sale
• Plaintiff was injured by the product
• Defect was the cause of the injury

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Implied Warranties

• Fitness for a Particular Purpose
• Must prove
• B has a special need
• S has reason to know of Bs particular purpose
• S makes statement that goods will the serve this
  purpose
• B relies on Ss skill judgment to purchase

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Comment 2, 2-315

• A "particular purpose" differs from the "ordinary
  purpose" for which the goods are used in that it
  envisages a specific use by the buyer which is
  peculiar to the nature of his business whereas
  the ordinary purposes for which goods are used
  are those envisaged in the concept of
  merchantability and go to uses which are
  customarily made of the goods in question. For
  example, shoes are generally used for the purpose
  of walking upon ordinary ground, but a seller may
  know that a particular pair was selected to be
  used for climbing mountains.

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Implied Warranty could also arise from

• Course of dealing
• Or
• Usage of trade

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Inconsistent warranties Priorities

• Fitness for a particular purpose
• Express warranty
• Custom or usage of trade
• Merchantability

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Disclaimers are implied by

• Exclusionary language
• Inspection of goods
• Condition is consistent with course of dealing or
  trade usage

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LIABILITY TO THIRD PARTIES

• Common Law Privity of contract
• UCC alternatives-who can sue?
• Buyer, family, guests in home,
• Natural persons reasonably expected to use
  (personal injury only)
• Any person (including corporation) who would
  reasonably be expected to use (personal injury
  and property damage)

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MAGNUSON MOSS ACT

• Federal law affecting consumer warranties
• Must contain certain information
• Limited or full
• FTC http//www.ftc.gov/bcp/conline/pubs/buspubs/wa
  rranty.shtm
• http//www.sterlingplumbing.com/pdf/SterlingWarran
  ty.pdf
• http//www.coastaltool.com/cgi-bin/SoftCart.exe/pa
  nasonic/panasonic-warranty.htm?Ecoastest
• http//www.panasonic.com/business/security/downloa
  ds/warranty_card.pdf

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NEGLIGENCE

• Elements
• Duty to use reasonable care
• Breach of duty
• Injury or loss
• Proximate cause
• Defenses
• Assumption of risk
• Contributory negligence
• Comparative negligence

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STRICT LIABILITY 402A

• Elements
• Defective product
• Unreasonably dangerous
• Defective at time of sale
• Condition is substantially unchanged
• Seller is in the business of selling the product
• Injury or loss
• Proximate cause
• Defenses
• Assumption of risk
• (Some states) comparative negligence

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WARNINGS, LABELS AND INSTRUCTIONS

• Courts have held that a product is defective if
  adequate warnings are not provided with the
  product upon sale.
• This extends to all written materials connected
  with the product including instructions for use
  and maintenance.

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There is a clear duty to warn of a danger in that
product if

• 1. The product is dangerous
• 2. This fact is or should be known to the
  manufacturer or seller
• 3. The danger is not one which is obvious or
  known, or readily discoverable by the user and is
  not one which arises only because the product is
  put to some unforeseeable unexpected use

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DON'T BURY YOUR WARNING

• Six-year-old Sandra Hurst came within an inch of
  drowning. She was pulled out of the ocean
  unconscious. While the lifeguard applied first
  aid, the fire department was summoned.
• The rescue squad arrived and started using a
  resuscitator after wrapping Sandra in blankets,
  but it became apparent that the child needed
  more heat. The firemen went to their truck and
  returned with "heat blocks".
• The blocks, made of magnesium, were activated and
  applied directly to the child's bare body. It was
  a mistake. They should first have been wrapped in
  an insulating cloth or towel. Sandra was badly
  scorched and blistered.
• The child's parents didn't blame the firemen.
  "They had to do everything in a rush," they
  realized. "It's the fault of the manufacturer of
  those blocks."

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The labels on the cartons containing the blocks
read"ALWAYS READY FOR USE""ENTIRELY
SELF-CONTAINED""ONE HOUR'S HEAT PER CHARGE""TOP
HEAT IN ONE MINUTE""NO LIQUIDS USED TO
OPERATE""IMPERVIOUS TO HEAT, COLD
ANDMOISTURE-KEEPS INDEFINITELY"
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The instructions read"When fast emergency heat
is needed for victims of accident, exposure, or
sudden illness, the M.S.A. Redi-Heat Block is
always ready for service. Fully raise the
activating lever.""Insert the Redi-Heat Charge
into the Block's receptacle-plain end first-and
release the lever.""Note The activating lever
must be raised to maximum stroke before
releasing, or the charge will not activate.""The
lever indents the head of the Redi-Heat Charge,
creating top heat within one minute. Retain
Charge in Block for at least one-half
hour.""Wrap in insulating medium, such as pouch,
towel, blanket or folded cloth."
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IF YOU TELL IT LIKE IT IS, YOU'LL WIN

• A new house had just been completed by builder
  Jack Berg. "If you are interested in renting,"
  Berg informed a prospect, Dave Dillon, "you'd
  better take a look this evening. I have others
  interested."
• Dillon and his wife hurried over. Electric power
  was not on yet-so Dillon struck a match in the
  kitchen. The match touched off an explosion and
  flash fire.
• Later queries revealed that workers that day had
  used Flor-Seal to finish the floors. Its
  lingering fumes had exploded.
• Husband and wife sued the manufacturer of
  Flor-Seal, asserting that "the factory failed to
  warn users of the full extent of the danger."

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• The manufacturer showed the label as its defense
• DANGER-FLAMMABLE MIXTURE
• DO NOT USE NEAR FIRE OR FLAME
• N.Y.F.D. C. of A. No. 2484
• VAPOR HARMFUL
• CONTAINS TOLUOL, KETONES,
• ISOPROPYL ALCOHOL
• FLASH POINT UNDER 70F.

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• Turn off all pilot lights before using. Keep away
  from heat, sparks and open flame. Use with
  adequate ventilation. Avoid prolonged contact
  with skin and breathing of vapor or spray mist.
  Close container after each use. Do not take
  internally. Do not transfer contents to bottles
  or other unlabelled containers. Harmful or fatal
  if swallowed. If swallowed do not induce
  vomiting. CALL PHYSICIAN IMMEDIATELY.
• KEEP OUT OF REACH OF CHILDREN

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DANIEL V. FORD

• Plaintiff attempted to commit suicide by
  climbing into the trunk of a Ford LTD, and
  closing the trunk.
• She remained there for 9 days until she was
  rescued.
• Plaintiff sued Ford in strict liability claiming
  physical and psychological injuries. She claimed
  that the car had a design defect in that there
  was no internal latch or release, and Ford had
  failed to warn her of this condition.
• Was there abnormal misuse?

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WHAT CONSTITUTES "STATE OF THE ART?"

• Government Regulations
• Industry Standards
• Recommended Practices
• Collateral Standards
• Benchmarks and Brochures
• Company Procedures
• Evaluations and Certification

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MAYBANK V. S.S. KRESGE

• Geraldine took a trip to New York to visit her
  son and 2 year old
• grandson. She borrowed her daughter's camera for
  the trip.
• Two days before leaving for the trip, she
  purchased a package of GTE Sylvania Blue Dot
  flash cubes from K-mart. On the carton of the
  package were words to the effect that each bulb
  was safety coated.
• Upon arriving in N.Y. she decided to take a
  picture of her grandson. She opened the flash
  cubes and put one on the camera. She pushed down
  on the lever to take the picture, and the cube
  exploded. The explosion knocked off her glasses
  and caused cuts to her left eye. She was
  hospitalized for 8 days.
• Under each case of action
• What must she prove?
• From whom can she recover?
• Are there any defenses?