Business Law and Ethics

BUSINESS LAW AND ETHICS

Chapter 19

WARRANTIESEXPRESS WARRANTYThe statement of the seller in which the article sold Is warranted or guaranteed is known as an Express WarrantyIMPLIED WARRANTYAn implied warrantee is one that the seller did not make but that is imposed by the law

WARRANTY OF TITLE

The seller is confirming ownership of the goods and that ownership is being transferred to the buyer.

PRIVITY OF CONTRACT

A contract relationshipHow it applies to “Breach of Warranty”

A stranger can (one who does not have a contractual relationship) sue on the theory of Breach of Warranty.

MANUSON-MOSS WARRANTY & FRC

IMPROVEMENT ACT

This act requires that written warranties for consumer goods must meet certain requirements.

The consumer must be informed of the warranty prior to the sale.

T

T O P R O V E B R E A C H O F W A R R A N T Y

Only the facts of when the plaintiff has direct knowledge, or about which information can readily be learned, need to be proven.

Q U E S T I O N # 1

Why is it important that the buyer examine the product before signing the contract?Answer pg. : No implied warranty exists with respect to defects in goods that an examination should have revealed before making the final contract.

QUESTION #2

What is the relationship of Privity of Contracts?

Answer pg. 217: In the past, in common law there could be no suit for Breach of Warranty unless a Privity of Contract existed between the plaintiff and the defendant. However a “stranger” (one who does not have a contractual relationship can sue on the Theory of Breach of Warranty.

QUESTION #3 What is Consumer Protection?

Answer pg. 220: Laws designed to protect the parties to a contract from abuse, sharp dealing and fraud. They also strengthen legitimate business interests.

QUESTION #4

What is TILA?

Answer pg. 222: The Federal Truth in Lending Act.