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Warranties and You Part I: Implied Warranties

legal contract review

Ever walk into a store with a pressing need (say a cool breeze on a hot summer night) and walk with out the perfect solution (for instance, an air conditioner) only to find it out your new prized possession didn’t exactly perform as you thought? Are you entitled to a refund, an exchange or a fix? There’s a lot of different laws that come into play here, and this article will talk about warranties, the different types and the exceptions.

Disclaimer: The following information does NOT constitute legal advice and is only for general educational purposes. Each situation is different and specific legal issues usually require additional research and investigation, so do not rely on this article to address a particular legal issue; use this as a starting point to gain a general understanding. This article, although educational in purpose and substance, nevertheless, might be deemed attorney advertising, and prior results do not guarantee future success.

I. What is a Warranty?

The dictionary defines a “warranty” as “a usually written guarantee of the integrity of a product and of the maker's responsibility for the repair or replacement of defective parts.”[1] However, the law, being all kinds of complicated and stuff, can never be that simple. Certainly, this is the general understanding of warranties that all we have, but did you know there are many different kinds of warranties? And, that merchants, retailers and manufacturers usually aren’t even required to provide a warranty? So, just as it’s always darkest before the dawn, I’m going to confuse you first, and then explain it. Generally speaking, there are two broad categories of warranties: Implied and Express Warranties.

II. Implied Warranties

Implied Warranty of Merchantability v.

Implied Warranty of Fitness for Particular Purpose

I’m going to start with the less obvious one, Implied Warranties, because believe it or not Express Warranties, actually can get a bit more complicated. Implied Warranties have two subtypes: Implied Warranty of Merchantability and the Implied Warranty of Fitness for a Particular Purpose. Now that your head is full of unpronounceable bloated legalistic phrases, let me try and break this down for you.

Implied Warranty of Merchantability

Basic Concept: I’m simplifying here, but the Implied Warranty of Merchantability is the Merchant's unspoken basic promise that the goods sold will do what they are supposed to do and that there is nothing significantly wrong with them.[2] Every state (except maybe Louisiana) has a law that describes this warranty, usually in something called the “Uniform Commercial Code,” basically the law for contracts when buying physical goods (air conditioners), as opposed to personal services (air conditioning repair services). What this means is that what we are about to talk about generally does *NOT* apply to services - only to buying and selling goods (physical objects). In New York (as many other places), the warranty is an *implied* promise in any contract for sale *as long as* the seller is a “Merchant” of *such* goods and *unless* this warranty is *excluded or modified*.[3]

“Merchants” & “Implied”: That’s a lot to take in, even for lawyers, and you can spend the better part of an advanced contracts course exploring these concepts (which I did, thank you Professor Chiang![4]). By the act of merely selling you the good (the air conditioner), the Merchant is *implying* the warranty comes with the good. The Merchant doesn’t have to say a word. In fact, if the Merchant says nothing, the Warranty of Merchantability is *implied* into the contract you have with the Merchant. However, this rule only applies to *Merchants* - not necessarily every seller of a particular good. And, even so, the *Merchant* can disclaim, exclude or modify the *implication*. Let’s take these one at a time.

Merchants Defined: A “Merchant” doesn’t mean any old person selling you the air conditioner (or whatever). A “Merchant” is a seller that *regularly* sells the good, knows a lot about the good, or has an expert on hand.[5] So, a large electronics retailer, likely would be a “Merchant” for appliances, computers, and electronics in general. However, if you buy an air conditioner from a random stranger on Craigs list, that stranger probably would *not* be considered a Merchant for whatever you are buying - unless - they happen to hold themselves out as an expert with such things or it’s well known that they are.

Excluded or Modified: Sometimes this also is called “disclaimed.” Guess what? You don’t necessarily have a right to an Implied Warranty of Merchantability. Yup. You read that correctly. The Warranty of Merchantability is *implied* (i.e. suggested, alluded to, assumed). But, what if the Merchant makes it very clear the product is *not* under any warranty? In effect, then the Merchant dispels that assumption or implication, meaning no warranty.

“As Is”: If the Merchant says the product is “as is” or there are “no warranties” or “with all faults” or other language which commonly calls attention to the buyer, then that buyer takes the product at their own risk or subject to their own inspection of any obvious faults (i.e. you ever inspect a bunch of eggs before you bought them?). In other words, there is no “implication” of a warranty.

Otherwise, if the Merchant was silent, generally you could safely assume the warranty is included. Note, some states[6] do not permit Merchants to disclaim these warranties (meaning by law the Merchant *must* stand behind their product), but you’re out of luck in New York (hey don’t blame me, write your State Assembly or State Senate representative).

Examples: Are you still having a little trouble with this? It’s a lot to process. So, here we go. You shop at your favorite electronics store. You buy an air conditioner. There’s no special sign or warning or anything disclaiming or modifying any warranties. You get home and the air conditioner doesn’t work. You should be covered by the “Implied Warranty of Merchantability.” It is supposed to do what a normal air conditioner does without any significant damage. But it doesn’t.

Now, if the air conditioner was on sale and said “As Is” “all your own risks” in big giant letters, well then, probably this Implied Warranty of Merchantability does *not* apply (but you might have other legal protections - more on that later). Suppose, you bought the air conditioner from your best friend who did *not* disclaim any warranties. Your friend is not a regular seller of air conditioners (I’m guessing) and therefore, the Implied Warranty of Merchantability never was implied in the first place.

Implied Warranty of Fitness for A Particular Purpose

Basic Concept: But, wait, there’s another kind of Implied Warranty. It’s called the Implied Warranty of Fitness for a Particular Purpose.[7] It says, “where the seller at the time of contracting has reason to know any particular purpose for which the goods are required and that the buyer is relying on the seller's skill or judgment to select or furnish suitable goods, there is unless excluded or modified under the next section an implied warranty that the goods shall be fit for such purpose.”

Plain English: Sorry, I know that was cruel to do that to you, but I felt you should have the actual wording first, so you know I don’t just make all this up. You see why we need to go to law school to read this stuff. Anyway, let’s say you go to Radio Shack (if you can still find one[8]), and you say you need a cable that can hook your Blue Ray to your TV. You have no idea of the difference between DVI or HDMI[9] and you ask the salesperson.

You are *relying* on the salesperson’s expertise to make a good choice. As long as it’s *objectively reasonable* for you to do this, and as long as the store or salesperson does not *disclaim, modify or exclude* their warranty or advice, then you are covered if the cable doesn’t work properly. Again, a disclaimer is something like, “um, I’m not sure about your particular DVD because the model is a hundred years old, and you should get a new one, but … this cable usually works on similar models.”

More to Come

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[3] NY UCC, §2-314.

[4] (one of my favorite professors at Fordham University School of Law, and he’s still there!).


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