Document Type

Article

Publication Date

1-2009

Abstract

Thousands of times each day, a buyer opens a box that contains a new computer or other electronic device. There he finds written material including an express "Limited Warranty." Sometimes the box has come by FedEx directly from the manufacturer; other times the buyer has carried it home from a retail merchant. Despite the fact that it is standard practice for the manufacturer to include a limited written express warranty on the sale of such products,' and despite the fact that both the manufacturer and the buyer believe that warranty to be legally enforceable, the law on its enforceability is unclear. There are two doctrinal barriers to the enforceability of this warranty. Because the critical section in Article 2 of the Uniform Commercial Code, section 2-313, requires that any express warranty be "part of the basis of the bargain,"' there is a question whether a warranty, seen for the first time by the buyer after the purchase has been concluded, can be part of the "basis of the bargain." An additional doctrinal barrier is present when the buyer purchases from a retail seller. In that case the buyer's contract is with the retailer, not with the manufacturer, but the manufacturer, not the retailer, gives a warranty. Section 2-313 contemplates warranties by the "seller." 3 Because the buyer's "seller" is the retailer, not the manufacturer who gives a warranty, the warranty is given by a third party, not, as section 2-313 seems to demand, by the "seller." Courts finding no claim sometimes invoke terminology familiar from many tort cases, that there is no "privity" between a manufacturer and a buyer once removed.4 Finding the statement-"we warrant to you, the end user, that the enclosed product is fit for ordinary purposes," and uninformed of the legal niceties, what would a lay buyer believe? He would believe that he had received a legally enforceable warranty. His belief would be justified not only by the plain meaning of the words, but also by the uniform practice; sellers of new, packaged electronic equipment always give express warranties and usually honor them. And, notwithstanding his lawyer's clever explanation of the legal barriers that might be imposed against a buyer's claim, every seller would expect that he was incurring legal liability. 5 No obscure term in the contract has risen up to bite the seller. The seller knew what he was doing, was likely forced by the market practice to do it, and may even have been looking at the Magnuson-Moss Act when he chose his words. Writers and judges have long recognized both issues. Statutory provisions that would impose warranty liability on a remote seller were proposed as early as 1944 when Article 2's predecessor, the Revised Uniform Sales Act, was being drafted. Dick Speidel and a number of other scholars have written extensively on the issue.8 Neither section 120 of the Revised Uniform Sales Act, nor Dick's proposal, section 2-313A of the 2001 Revision to Article 2, ever became law. Even today, and despite scholars' agreement on the enforceability of warranties in the box, a determined defendant can find cases to support an argument that neither a remote nor a direct seller has liability for warranties in the box that are first seen by the buyer after the sale has been concluded. Below I discuss judicial and legislative attempts to deal with the two problems and I suggest how they might be handled in a case today. The proper result is indisputable, only the method is in question; to conclude otherwise would truly make the law an ass.

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