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Warranties II--Express Warranties
The adoption of the Uniform Commercial Code by NCCUSL and the ALI in the early 1950s, and its subsequent passage in 49 states in the next two decades, signaled an interest among lawmakers and lawyers in reducing common law rules and outdated Uniform Sales Act provisions into a comprehensive code of dealings in business and financial transactions. The warranty sections of the UCC-- 2-313, 2-314, 2-315 and 2-316-- likewise attempted to refine and update common law warranty notions.
Article 2 provides for three warranties (express, implied warranty of merchantability--IWM-- and implied warranty of fitness for particular purpose--IWF), but one should start by realizing that the three warranties are really part of the one concept of warranty, in which a seller, who sometimes may be a merchant, stands behind the goods s/he sells to the public or when two merchants deal with each other. To use a theological term, we have a "trinitarian" notion of warranty, where the one is really three and the three is one [I think I invented this one]. In fact, the Code provides for "other implied warranties" in 2-314(3) that may arise from course of dealing or usage of trade. Therefore, whenever you are asked to perform a warranty analysis, you need to discuss, in order, whether express warranties or various types of implied warranties are applicable.
The Code's subarticle on express warranties, 2-313, is only explicable by understanding its context in the history of warranty law. Whereas the common law made a distinction between an affirmation and a promise (the former did not imply a warranty while the latter did), 2-313(1)(a) provides that a warranty arises from "Any affirmation of fact or promise." (Emphasis supplied) Whereas the USA of 1906 made buyer reliance on express words of seller necessary for warranty to attach, Article 2 makes any affirmation of fact or promise which becomes "part of the basis of the bargain" to be a warranty. Comment 3 discusses the difference between a reliance requirement and the "basis of the bargain" language of the Code. "Affirmations of fact made by the seller about the goods during a bargain are regarded as part of the description of those goods; hence no particular reliance on such statements need be shown....Rather, any fact which is to take such affirmations, once made, out of the agreement, requires clear affirmative proof." (Emphasis supplied) That is, an affirmation of fact is a warranty, unless clear proof, with the burden on the seller, is forthcoming that it is not a basis of the bargain. The basis of the bargain test, therefore, is very broad. It is meant to be more inclusive than the USA concept of reliance.
The example I gave in class in which a statement might not be the basis of the bargain is if it was made by the merchant after the good was purchased. All other statements relating to the good to be purchased have the possibility of being warranties, with the large exception of statements that are the "seller's opinion," (2-313(2)), discussed on the next page.
But Article 2 goes beyond the Sales Act in another way by providing that express warranties may arise through any "description of the goods" which is made the basis of the bargain (2-313(1)(b)). In addition, any "sample or model" of the goods is a warranty that the whole of the goods will conform to the sample or model (2-313(1)(c)). Note that in Comment 5 a description need not be in words. Thus, I argued in class that an odometer reading of 45,000 on a used car sold by a merchant is an express warranty by description that the car has been driven that many miles. If you purchase the car and discover in fact that all signs point to the car having traveled 90,000 miles, you not only have a statutory cause of action for odometer tampering but also a cause of action for breach of express warranty.
An example of a violation of the "sample or model" provision is where you might purchase a car on the basis of a showroom model, order a car with the same features and then receive a car that doesn't include all those in the model on the showroom floor.