Good Example Of Ucc Warranties Essay

Question No. 1

1) Yes, Sellena disclaimed the UCC warranties if the widget is priced at $500. Under s 2-315 of the UCC, an implied warranty for the goods’ fitness exists for every transaction of sale. However, such implied warranty for fitness or merchantability can be waived by express words or conduct that tends to negate or limit the warranty. If the negation or limitation is done verbally, it must specifically mention the term merchantability (§ 2317[1] and [2], UCC). This requirement was met by Sellena, who told Buyona that she could not provide any warranty of merchantability, fitness or any other type of warranty if the latter buys the widget only for $500.
2) Buyona bought the widget at $750 and not $500. She made a down payment of $500 and promised to return later to pay the balance of $250. This was an agreement that was impliedly agreed to by both parties. The implication between buying the widget for the price of $500 and buying it for the price of $750 is significant because it determines the available remedy for breach of warranty for the defective widget that Buyona purchased. As earlier stated, had the widget been bought for $500, Buyona is not entitled to a remedy from the seller because Sellena had validly negated the implied warranty under the UCC. However, if the consideration for the widget bought by Buyona is $750, then the implied warranty under the UCC applies and, therefore, she is entitled to a return of the price money or another non-defective widget of the same type. Moreover, there is no legal support for an implied duty of the buyer to inspect the goods before leaving the store. Section 2-316 (3[b]) of the UCC states that the negation of an implied warranty may occur if the buyer ‘refuses’ to examine the goods. The implication is that there is a prior request for inspection, but there was none in this case.
3) Yes, the UCC warranties apply here because this is an instance of transaction in goods as cited in s 2-102 of the UCC. Since Sellena had given Buyona the widget after the latter quoted $750 as its price, which is payable $500 at the time of the agreement and $250 thereafter, the presumption of such conduct is that a contract had been executed under § 2-204 of the UCC. Sellena cannot unilaterally vary the terms of agreement after the execution of the contract of sale. There was a meeting of the minds of the parties, including consideration, which is one of the elements of a contract. An agreement for the consideration must exist at the time of the execution of the contract (Cross and Miller p. 186).

Question No. 2

1) Both parties made assumptions in this case: the Builder by assuming that Mason’s price for the bricks is the same as those of his previous purchases, and Mason by assuming that the Builder has knowledge that he sells his bricks by piece for $1 each. Nonetheless Mason is more to blame for the mistake in interpretation because he is a merchant – a person dealing with goods of a kind and is expected to have knowledge or skills regarding such goods (§2-104 (1), UCC). As a merchant, the UCC requires Mason to exercise good faith that is of a higher level than Builder, who is not deemed a merchant of bricks. Section 2-103(1)(b) defines good faith with respect to a merchant as “honesty in fact and the observance of reasonable commercial standards of fair dealing in the trade.” Mason should have, therefore, informed Builder during the negotiation that he sells bricks by piece and that a $2,000 worth of bricks equates to 2,000 pieces of bricks, but that he was willing to give him a discount because of the large quantities Builder was ordering.
2) As earlier stated, Sellena made a valid disclaim of warranties as to the sale of the widget, but only if the price is pegged at $500 because of her express mention of the word ‘merchantability.’ Such express mention of the term is a requirement for disclaimer under § 2317[1], UCC. However, this is not true to the sale of the widget at the price of $750.

References

Cross, F. and Miller, R. (2011). The legal environment of business: Text and cases: Ethical, regulatory, global, and corporate issues, Cengage Learning.
Uniform Commercial Code.