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Navigating Implied Warranties: Key Concepts and Legal Implications
There is a level of uncertainty when it comes to implied warranties. They suggest a standard that should be met without any real evidence of such. The expectation is that all standards of a product or service are met, simply because they should be. In business law, the concept of an implied warranty refers to the unwritten or unspoken guarantee that a product is up-to-par with its purchase.
Why Implied Warranties?
So, if unwritten or unspoken, why do implied warranties exist, and what is their purpose? Whether there is a written warranty or not, implied warranties assume the role of protecting consumers from defective products that should never have been sold to them in the first place. From a legal standpoint, consumers are entitled to high-quality products that are ready for sale, meaning there should be no issues, especially in exchange for money.
In Florida, for example, implied warranties covering the sale of residential property include coverage for proper construction, workmanship, and habitability. Relevant to these properties as well as general products, the warranties suggest that the construction or manufacturing follows standard procedures, just as the workers are expected to perform their responsibilities in a workmanlike manner. It also implies habitability with regard to safe living conditions upon the sale of the property.
To better understand implied warranties, we must examine their different types and which roles they play in product consumption.
Implied Warranty of Habitability
Implied warranties of habitability ensure that landlords provide a safe living environment for their tenants. This means access to clean water, working gas and electricity, proper cooling and heating systems, absence of pests, etc. Ultimately, the warranty of habitability guarantees that the new living space will not have any deficiencies and is suitable for living (or ready for sale, as implied warranties are supposed to guarantee).
Implied Warranties of Merchantability
Conversely, implied warranties of merchantability suggest that a product is merchantable, or able to be sold, marketed, traded, etc. This implies that their quality is standard, and their condition is fit for sale. The product should be free of any defects, such as loose or broken parts, improper installations, and other manufacturing issues. This leads consumers to believe that the product works safely and is ready to use unless mentioned otherwise upon sale.
Warranty of Fitness
The same goes for a warranty of fitness, which guarantees that a product will meet its intended use upon sale. Rather than a guarantee that a product works, the sale confirms the product will perform a specific purpose and achieve the desired result.
Because all these types of implied warranties are unwritten, there is never a guarantee of any permanence that products are in perfect working condition. It can only be assumed that they are fit for sale and use because they sit on the shelves in stores everywhere, awaiting their purchase by a new owner.
Implied Warranties Versus Express Warranties
There are, however, instances in which these implied standards are not met, especially in grocery stores. When grocery shopping, consumers expect to purchase fresh, edible foods to be enjoyed when they arrive home. Surprisingly, the opposite occurs more frequently than one would hope or think. A Southern California family filed a lawsuit against Costco due to finding live worms in the fish they purchased after cooking it. As their 13-year-old daughter ate her halibut, she found worms crawling out of it, prompting the family to sue for $200,000.
This is what makes implied warranties a flawed concept at times. Scenarios like this Costco example are what separate the nature of implied warranties from express warranties, which are clearly stated verbally or on the product itself in written form. An express warranty is a seller or manufacturer’s guarantee, spoken or written, that a product will work as expected or intended when using it. The common denominator between express and implied warranties is that both must fall under the Uniform Commercial Code (UCC), which essentially governs any commercial transactions in the United States, including warranty laws.
The main difference between implied and express warranties is the obvious: the former is assumed, while the latter is published for consumers to read or hear about. There is also a difference in the amount of protection the consumer will have, as express warranties offer an additional layer of protection apart from the implications that it will work. While implied warranties are also legally binding, they offer a lesser extent of protection. This is because there is no tangibility within the initial promise that a product will meet expectations.
The Magnuson-Moss Warranty Act
The last significant difference is the legislation by which either warranty is bound. Implied warranties are governed by the state, whereas express warranties are governed by federal laws. In fact, written warranties became a source of business strategy in 1975 when the Magnuson-Moss Warranty Act was passed as federal law. This meant that businesses were to provide written warranties for their products that aligned with federal consumer laws. While it did not mandate businesses to provide written warranties, it gave businesses the option to warrant their products in writing. If they chose to, their products would need to provide information about coverage, detailing the types of warranties consumers would receive in the case of product defects. Product defects usually lead to breaches of warranty, which hold sellers and manufacturers liable for neglecting their legal responsibilities.
Breaches of Warranty
Multiple aspects indicate a warranty’s negligence of either protecting the consumer or providing appropriate coverage. If consumers find something wrong with purchased items, sellers and manufacturers are subject to lawsuits.
Breach of Warranty Claims
At this point, a breach of warranty claim may be filed, which is the legal action an individual may take against a seller or manufacturer for neglecting to fulfill the terms of a warranty. The breach typically results in a consumer’s financial loss. Because warranties are legally binding, the seller or manufacturer must provide coverage based on the terms and conditions of the warranty as guarantees to the consumer. Without doing so, the consumer has every right to file a breach of warranty claim that holds the seller or manufacturer liable for both the financial loss and the defective product.
Breach of Warranty Damages
Additionally, an individual may sue for damages resulting from a breach of warranty, which compensates the consumer’s financial losses. The damages suffered by the consumer may be any of the following: financial loss, injury caused by the product, deficiencies in the product, improper function, and failure to meet intended use. The bottom line is these damages are recoverable as long as the seller or manufacturer is held liable. By taking matters to court or resolving the issues civilly, consumers can recover damages based on the warranty’s terms and conditions.
Breach of Warranty Remedy
As compensation for damages, consumers may be entitled to various remedies that cover what they have lost. The most reparable and fundamental remedy is financial reimbursement, as mentioned above. However, not all consumers are satisfied with monetary rewards for damages and would prefer the product to be repaired or replaced. In other cases, consumers may decide to terminate the warranty contract, thereby re-collecting the product’s original price. Nonetheless, breach of warranty remedies are meant to protect both the buyer and the seller or manufacturer. At the end of the day, the buyer might find satisfaction with some form of remedy for damages. The sellers and manufacturers, ideally, will have legal protection as they make good on their promises outlined in the warranty
FAQs.
Which implied warranties arise under the UCC?
Both warranties of fitness and merchantability fall under the UCC. Apart from express warranties, the UCC describes implied warranties as automatically existing without any written or spoken affirmation of the coverage, terms, or conditions the warranty implies.
What constitutes a breach of an implied warranty?
An implied warranty breach occurs when a sold product does not meet a consumer’s expectations. The implication is that the product would work properly and fit its intended use upon sale. If it does not, but it was available for purchase and eventually sold, a breach of implied warranty has occurred.
How does one use Maine implied warranty?
In the state of Maine, implied warranties are designed to hold sellers and manufacturers liable for up to four years. This highlights a significant period of protection to which consumers are entitled upon purchasing a product and discovering its defects. In this case, consumers must pass the 3-Part Test, consisting of the following:
- evidence that the product has deficiencies or works poorly;
- evidence the buyer has not abused it; and
- evidence the product was purchased four years ago, at most, or before then.
What is guaranteed by an implied warranty for all products?
An implied warranty guarantees that upon sale, all products will work how they are supposed to or fit their intended use. A warranty of merchantability indicates a product’s safety and readiness to use, ensuring that it works. A warranty of fitness, however, has less to do with whether a product works but implies it will meet its intended use and fulfill a specific purpose.
What is an example of an implied warranty?
An implied warranty is an unwritten or unspoken guarantee that a product is safe, merchantable, and ready to be used once purchased. The best example of an implied warranty has to do with food. When grocery shoppers buy fruit, for instance, the implication is that the fruit is fresh and edible, not rotten or moldy.
What is the implied warranty of fitness for a particular purpose?
The specific purpose a warranty of fitness implies is how a product is fit for its intended use. For example, a brand-new bird bath is meant to stand upright and hold water inside its bowl for its specific purpose. If, however, the bird bath keeps falling over on flat concrete surfaces due to a crooked, unstable base and spills water, the product is defective, and the implied warranty of fitness has been breached.
What is the implied warranty of habitability in Florida?
In Florida, an implied warranty of habitability covers deficiencies in living spaces. When renting, landlords must ensure they provide a safe living environment for their tenants, including running water, proper heating and cooling systems, working appliances, etc. If these provisions are absent, damaged, or insufficient, a breached warranty of habitability has occurred.
What does “no warranties, express or implied” mean?
The statement “no warranties, express or implied” refers to the right of sellers to disclaim warranties under UCC. Instead of implied warranties, sellers can utilize terms such as “sold as is” or “with all faults,” providing a notice of deficiencies that may be recognized once purchased. The idea behind “no warranties, express or implied” is primarily to inform consumers, but also to protect sellers from warranty breaches and legal action.
What does it mean to disclaim an implied warranty, and how does it work?
To disclaim an implied warranty, sellers must state that a product is unable to perform its particular purpose. By making this statement, implied warranties no longer apply. This works through the UCC, which mandates sellers to put in writing that there is no implied warranty for a product. They do this with terminology such as “sold as is,” “with all faults,” or other similar language.
