Introduction:
“Let the buyer beware” is no longer the law in most states. Express warranties, which are written commitments made by the seller to the buyer, and usually promise to replace or repair the product if it does not perform as warranted, describe in detail the commitment of the seller and the duties of the buyer to obtain the protection of the warranty. If the express conditions are not complied with by the buyer, the warranty is usually voided.
Implied warranties are warranties imposed by law, usually state law, which compel the seller to perform in a certain manner whether or not there is an express warranty. The state statutes describe in detail what must be warranted and impose both rights to sue and, at times, penalties on the seller if the seller does not comply with the warranties.
This article shall discuss the basic law of implied warranties.
The Basic Law:
An implied warranty is a statutorily imposed requirement that a product is fit for its intended purpose and meets the buyer's reasonable expectations.
These implied warranties can be written or oral and are usually governed by state laws, not federal laws. They usually exist whether or not the seller seeks to have the buyer waive them and whether or not the seller is even aware of the state law imposing them. To protect consumers, products and services come with an implied warranty, whether or not there is also a written warranty. This implied warranty is in addition to any express warranty provided at the time of sale. Usually, the implied warranty includes a warranty of workmanlike quality for services, the implied warranty of habitability for a home, and the warranty of ownership by the seller that gives the seller the right to sell the goods.
More broadly, there are two key types of implied warranties: one is for merchantability and one is for fitness for the intended purpose. The warranty of merchantability warrants that a product will meet reasonable expectations of the buyer, while the warranty for fitness means the product meets the buyer’s reasonably intended use.
Assume you buy meat at a local store and it turns out to be tainted. That defect would violate the implied warranty of merchantability. All the food in a grocery store has an implied warranty as consumers assume it is fresh and edible and they are entitled to a refund if that warranty is breached.
The Uniform Commercial Code, a standard followed in whole or part by most states, provides at § 2-314:
An implied warranty is a legal term for the assurances that a product is fit for the purpose that it is intended and that it is merchantable, i.e., conforms to an ordinary buyer’s expectations. The warranty of merchantability is implied unless expressly disclaimed by name, or the sale is identified with the phrase "as is" or "with all faults.”
Such terms as “AS IS” seek to restrict or eliminate the implied warranties and can be effective only between merchants. When consumer transactions are involved, labeling, “sold as is,” or using similar terms, does not free a retailer from implied warranties in several states. Meanwhile, written warranties are protected via the federal Magnuson-Moss Warranty Act and covered by federal law.
The jury instructions that California utilizes to educate the jury as to the law that applies are useful to review in considering implied warranty:
ACI No. 3210. Breach of Implied Warranty of Merchantability - Essential Factual Elements
Judicial Council of California Civil Jury Instructions (2023 edition)
Breach of Implied Warranty of Merchantability - Essential Factual Elements [Name of plaintiff] claims that the [consumer good] did not have the quality that a buyer would reasonably expect. This is known as “breach of an implied warranty.” To establish this claim, [name of plaintiff] must prove all of the following:1. That [name of plaintiff] bought a[n] [consumer good][from/manufactured by] [name of defendant];2. That at the time of purchase [name of defendant] was in the business of [selling [consumer goods] to retail buyers/manufacturing [consumer goods]];3. That the [consumer good] [insert one or more of the following:]3. [was not of the same quality as those generally acceptable in the trade;] [or]3. [was not fit for the ordinary purposes for which the goods are used;] [or]3. [was not adequately contained, packaged, and labeled;] [or]3. [did not measure up to the promises or facts stated on the container or label;]4. That [name of plaintiff] was harmed; and 5. That [name of defendant]’s breach of the implied warranty was a substantial factor in causing [name of plaintiff) harm.
Note further the following explanations:
As used in this chapter:
(a) “Implied warranty of merchantability” or “implied warranty that goods are merchantable” means that the consumer goods meet each of the following:
(1) Pass without objection in the trade under the contract description.
(2) Are fit for the ordinary purposes for which such goods are used.
(3) Are adequately contained, packaged, and labeled.
(4) Conform to the promises or affirmations of fact made on the container or label.
As for implied warranty of fitness (as opposed to implied warranty of merchantability):
“Implied warranty of fitness” means (1) that when the retailer, distributor, or manufacturer has reason to know any particular purpose for which the consumer goods are required, and further, that the buyer is relying on the skill and judgment of the seller to select and furnish suitable goods, then there is an implied warranty that the goods shall be fit for such purpose and (2) that when there is a sale of an assistive device sold at retail in this state, then there is an implied warranty by the retailer that the device is specifically fit for the particular needs of the buyer.
(c) The duration of the implied warranty of merchantability and where present the implied warranty of fitness shall be coextensive in duration with an express warranty which accompanies the consumer goods, provided the duration of the express warranty is reasonable; but in no event shall such implied warranty have a duration of less than 60 days nor more than one year following the sale of new consumer goods to a retail buyer. Where no duration for an express warranty is stated with respect to consumer goods, or parts thereof, the duration of the implied warranty shall be the maximum period prescribed above.
(d) Any buyer of consumer goods injured by a breach of the implied warranty of merchantability and where applicable by a breach of the implied warranty of fitness has the remedies provided in Chapter 6 (commencing with Section 2601) and Chapter 7 (commencing with Section 2701) of Division 2 of the Commercial Code, and, in any action brought under such provisions, Section 1794 of this chapter shall apply.
The Song- Beverly Consumer Warranty Act (California)
The California Song-Beverly Consumer Warranty Act (Song-Beverly Act) (Cal. Civ. Code, §§ 1790 to 1795.8) was enacted in 1970.
The Song-Beverly Act establishes methods to ensure that buyers of consumer goods obtain the benefit of an express warranty given with the goods and, further, provides that every retail sale of consumer goods in California is accompanied by certain implied warranties. It also strictly limits how those warranties may be disclaimed. It provides remedies for damages, equitable relief, civil penalties, and recovery of litigation costs and expenses, including attorneys’ fees.
It should be noted that the Song-Beverly Act provides more far extensive protections to buyers of consumer goods than the California Commercial Code (UCC). The purpose of the Song Beverly Act is to deliver to buyers of consumer goods the benefit of additional protections and it is construed by the courts to carry out this objective (see Joyce v. Ford Motor Co., 198 Cal. App. 4th 1478, 1486 (2011)).
The Song-Beverly Act was intended to supplement rather than supersede the UCC, but where there is a conflict between the two, the Song-Beverly Act controls (Cal. Civ. Code § 1790.3 and see Joyce, 198 Cal. App. 4th at 1486 and Jiagbogu, 118 Cal. App. 4th at 1242).
For example, courts have held that the four-year statute of limitations of California Commercial Code Section 2725 (Section 2725) applies to actions for breach of warranty under the Song-Beverly Act, rather than the three-year statute of limitations of California Code of Civil Procedure § 338(a) for liability created by statute.
Courts also held that UCC reasonable time requirements for a buyer’s rightful rejection of goods, revocation of acceptance, and notice of breach (Cal. Com. Code §§ 2602(1), 2607(3), and 2608(2)) do not apply to actions under the Song Beverly Act (see Mexia v. Rinker Boat Co., 174 Cal. App. 4th 1297, 1307 (2009)).
The Song-Beverly Act defines consumer goods as any new product or part of a product that is used, bought, or leased primarily for personal, family, or household purposes: It does not include, however, clothing (Cal. Civil Code § 1791(c)); and consumables (Cal. Civ. Code § 1791(d)).
Assistive Devices:
Under the Song-Beverly Act, every sale of an assistive device at retail in California also has the retail seller’s implied warranty that the device is specifically fit for the particular needs of the buyer (Cal. Civ. Code § 1792.2(b). This implied warranty, the express warranty of Section 1793.02, and the associated rights and remedies are not subject to waiver and are cumulative with any other rights and remedies of the buyer. (Cal. Civ. Code § 1793.02(f).) (Cal. Civ. Code § 1793.2(d)(1).)
New Motor Vehicles:
The Song-Beverly Act has similar provisions applying specifically to new motor vehicles (Cal. Civ. Code § 1793.2(d)(2)). What qualifies as a reasonable number of repair attempts before replacement or refund is required is a question of fact to be considered based on the particular circumstances, but there must at a minimum be more than one opportunity to fix the nonconformity (see Silvio v. Ford Motor Co., 109 Cal. App. 4th 1205, 1209 (2003)). Each occasion when an opportunity for repairs is provided counts as an attempt even if no repairs are actually done. The repair efforts of a manufacturer and its authorized repair facility are not treated separately but are aggregated to calculate the number of repair attempts. Other circumstances juries might consider include: How easy or difficult it is for a repair facility to duplicate a problem. How much detail a buyer gives in assisting the diagnostic process. Whether a repair facility has a protocol for gathering information needed to locate or duplicate a problem. Whether a buyer omits important information bearing on diagnosing or duplicating a problem. Whether a problem is a generic one with dozens of potential causes. Whether a manufacturer has published technical service bulletins on diagnosis and repair. (Judge Ronald F. Frank, 39-NOV L.A. Law. 27, 30 (2016).)
The Song-Beverly Act provides a buyer with other recourse if a manufacturer making an express warranty for consumer goods sold in California or does not have California service and repair facilities. The retail seller must either service or repair the goods to conform to the express warranties given or direct the buyer to an independent repair or service facility that is: a) reasonably close; and b) willing to accept the repair or service. Alternatively, they can replace the goods with others that are a) identical or b) reasonably equivalent, or c) reimburse the purchase price paid by the buyer, less the amount directly attributable to the buyer’s use before discovery of the nonconformity. (Cal. Civ. Code § 1793.3(a), (b).)
Thoughts and Conclusions:
One business client, upon being educated as to the various implied warranty laws of California, joked, “You’ve made it, Let the Seller Beware, haven’t you?”
He is largely correct but note that those implied warranties more often apply in sales to consumers. Transactions between merchants are subject to laws similar to the Uniform Commercial Code. But if a business elects to sell its services or products to consumers, then it is vital for it to learn the various implied warranties that apply and adjust its business methods to conform. Ignoring a demand from a California consumer can result not just in litigation but having to pay the attorney’s fees of the consumer and penalties. California consumers have learned that they have rights guaranteed by law and are not shy in enforcing them.
One successful business we represented simply automatically accepted the return of any consumer product without even investigating, feeling that it was more cost-effective than imposing a full investigatory process to assume that their product was truly defective.
That method may avoid consumer litigation but it does not address the more fundamental issue of whether a product line is defective in some way or advertised incorrectly. It is thus vital for the wise businessperson to determine if there is a significant problem with a product or service and correct it before facing numerous complaints.
And if you are the consumer do not let “AS IS” language or the limited express warranty terms deter you from seeking redress. The statutes provide protection where the express warranties do not.