Law.com Subscribers SAVE 30%
Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.
CA's Flavor of Implied Warranty Leaves a Sour Taste
The warranty of merchantability, implied in almost every consumer purchase, rarely presents a litigation opportunity, even for the most-savvy advocates. For decades, courts have consistently interpreted the term 'merchantability' to connote a minimal, baseline assurance of product fitness and functionality. Essentially, if a product adequately performs its ordinary purpose, it satisfies the implied warranty. A recent decision from an appellate court in California, however, offers footing for plaintiff attorneys to argue for an expanded definition of 'merchantability.' Such a development, which the Uniform Commercial Code neither compels nor suggests, marks a departure from settled law and presents a significant risk of higher warranty costs for manufacturers and higher prices for consumers.
Merchantability: A Threshold Guarantee of Product Worthiness
Section 314 of Article 2 of the Uniform Commercial Code establishes the warranty of merchantability and provides that 'a warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of the kind.' UCC '2-314(1). Although it does not define 'merchantability' with precision, the Code does identify various criteria that goods must satisfy to qualify as merchantable. See '2-314(2). They must:
(a) pass without objection in the trade under the contract description; and
(b) in the case of fungible goods, [be] of fair average quality within the description; and
(c) [be] fit for the ordinary purpose for which such goods are used; and
(d) run, within the variations permitted by the agreement, of even kind, quality and quantity within each unit and among all units involved; and
(e) [be] adequately contained, packaged, and labeled as the agreement may require; and
(f) conform to the promise or affirmations of fact made on
the container or label if any.
'2-314(2).
Notwithstanding the multifactor approach suggested by the text of '314, courts ' at least in the context of consumer goods ' almost exclusively focus their merchantability analyses on whether the goods at issue are 'fit for the ordinary purpose.' See, e.g., Fed. Signal Corp. v. Safety Factors, Inc., 886 P.2d 172, 180 (Wash. 1994) ('The requirement most often cited is that of 'fit for the ordinary purposes.”). Although perhaps too limited for certain cases, this tendency to reduce merchantability to a single inquiry is pervasive and appears to capture the thrust of the protection intended. See, e.g., UCC '2-314 cmt. 8. ('Fitness for the ordinary purposes for which goods of the type are used is a fundamental concept.')
This premium content is locked for Entertainment Law & Finance subscribers only
ENJOY UNLIMITED ACCESS TO THE SINGLE SOURCE OF OBJECTIVE LEGAL ANALYSIS, PRACTICAL INSIGHTS, AND NEWS IN ENTERTAINMENT LAW.
- Stay current on the latest information, rulings, regulations, and trends
- Includes practical, must-have information on copyrights, royalties, AI, and more
- Tap into expert guidance from top entertainment lawyers and experts
Already a have an account? Sign In Now Log In Now
For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473
Major Differences In UK, U.S. Copyright Laws
This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.
Strategy vs. Tactics: Two Sides of a Difficult Coin
With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.
The Article 8 Opt In
The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.
Removing Restrictive Covenants In New York
In Rockwell v. Despart, the New York Supreme Court, Third Department, recently revisited a recurring question: When may a landowner seek judicial removal of a covenant restricting use of her land?