When a seller makes a promise to a buyer there are implications if the seller breaks that promise. Breach of warranty is a possible remedy for a buyer if a broken promise has caused them harm.
When a seller makes a promise to a buyer there are implications if the seller breaks that promise. Breach of warranty is a possible remedy for a buyer if a broken promise has caused them harm. Under Arkansas statute, a warranty is defined as an assurance, promise, or guaranty by one party that a particular statement of fact is true and may be relied upon by other party. There are three main types of warranties: express warranty, implied warranty of merchantability and implied warranty for fitness for particular purpose.
Under A.C.A. § 4-2-607, in order to recover under any of the theories of implied breach of warranty of merchantability, implied breach of warranty of fitness or breach of express warranty, the plaintiff has the burden of proving four common elements:
- The plaintiffhas sustained damages
- Such conditions of the product was a proximate cause of plaintiff’s damages;
- The plaintiff was a person whom defendant might reasonably expect to use the product;
- The plaintiff notified the defendant of the breach within a reasonable time after he discovered or should have discovered it.
Unlike what is required for a general negligence claim, a plaintiff must notify the seller of the breach, regardless of what type of breach of warranty. In Jackson, the court ruled that “the requirements of notification are not stringent. Notice need only be sufficient to inform the seller that the transaction is claimed to involve a breach and thus to open the way for negotiation of a normal settlement. It must, however, be more than a complaint. It must, either directly or inferentially, inform the seller that the buyer demands damages upon an asserted claim of breach of warranty.” Jackson v. Swift-Eckrich, 830 F. Supp. 486 (W.D. Ark. 1993).
Consumers in Arkansas are protected from the breach of warranties by Title 4 of the Business and Commercial Law Subtitle 7 chapter 86 § 4-86-101. According to A.C.A. § 4-2-318, this protection is not limited to just the person who purchases a product. The statute explains, “a seller’s warranty whether express or implied extends to any natural person who is in the family or household of his buyer or who is a guest in his home if it is reasonable to expect that such person may use, consume or be affected by the goods and who is injured in person by breach of the warranty.” A.C.A. § 4-2-318
Disclaimer of Warranty
A seller may waive warranty from its product, but in order to do so the seller must follow the guidelines established by A.C.A. § 4-1-201. A disclaimer of warranty must be conspicuous enough to ensure that it will be brought to the attention of an ordinary buyer. For instance, the Supreme Court of Arkansas has accepted the disclaimer of warranty on Hunter because, “The manufacturer’s disclaimer appeared on the back of the dealer’s purchase order, but in print larger than the surrounding writing, and writing in large print on the front of the form, directly above the line for the buyer’s signature, directed the buyer to the controlling terms on the back, the writing was such that should have attracted the attention of a reasonable buyer and, therefore, satisfied the standard for conspicuousness.” Hunter v. Texas Instruments, Inc., 798 F.2d 299 (8th Cir. 1986). However, Arkansas Supreme Court has rejected seller’s trying to make the disclaimer of warranty when the disclaimer is not explicit for the buyer. In Mack the Arkansas Supreme Court stated that, “such an attempted disclaimer is ineffective, as a matter of law, and fails of its purpose when it is in the body of an instrument and in type of the same size and color as other provisions.” Mack Trucks of Arkansas, Inc. v. Jet Asphalt & Rock Co., 246 Ark. 101 (Ark. 1969).
According to A.C.A. § 4-2-313, express warranties by the seller are created as follows: “Any affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes part of the basis of the bargain creates an express warranty that the goods shall conform to the affirmation or promise.” It is not necessary to the creation of an express warranty that the seller use formal words such as “warrant” or “guarantee” or that he has a specific intention to make a warranty, in order for one to be made. There are many places to look to find express warranties, such as brochures, instruction manuals, inventory descriptions and samples. As explained by A.C.A. § 4-2-313, the following are the recognized categories of express warranties:
- Any description of the goods which is made part of the basis of the bargain creates an express warranty that the goods shall conform to the description;
- Any sample or model which is made part of the basis of the bargain creates an express warranty that the whole of the goods shall conform to the sample or model.
Keep in mind that there are several carve outs for what is not an express warranty. The best example is the salesman’s opinion, such as, “I think this is the best car on the market”. An affirmation merely of the value of the goods or a statement purporting to be merely the seller’s opinion or commendation of the goods does not create a warranty. Additionally, for the express warranty to exist, it needs to have been actually relied upon by the buyer. The Arkansas Supreme Court considered these two scenarios in Ciba-Geigy Corp, that “statements in advertising materials did not become a basis of the parties’ bargain because the buyer did not read them and therefore they did not constitute an express warranty, but in-person assurances made to the buyer regarding the product’s safety could be found to be affirmations of fact and not mere opinion. An affirmation that an automobile was a one-owner vehicle, when it was actually two-thirds of one car and one-third of another car put together, was held to create an express warranty” Ciba-Geigy Corp. v. Alter, 834 S.W.2d 136 (Ark. 1992))
In order to recover for breach of an express warranty, the plaintiff has the burden of proving in addition to the elements mentioned above, that an express warranty was created by one of the means I have just mentioned.
An example of this is given by Arkansas Supreme Court in Thornsberry, where the Smiths hired Thornsberry to build a house on land they had purchased. After moving into the home, the Smiths discovered numerous problems with the house. During the construction, Thornsberry told them that there was a soil problem but went ahead and poured the footings and advised the Smiths that the problem was resolved. When the house started to shift due to the soil problem, the Smiths filled a law suit against Thornsberry and requested the court award damages for breach of express warranty. The trial court found that Thornsberry had breached an express warranty in building the house on expansive soil. Thornsberry v. Smith, 2006 Ark. App. LEXIS 684 (Ark. Ct. App. 2006). Here we can see that the Smiths proved that Thornsberry created a warranty, the house was not in accordance with what was promised and because of Thornsberry’s failure to build a solid house, the house suffered damaged.
There are two different kinds of an implied warranty: implied warranty for merchantability and implied warranty for fitness for particular purpose.
Implied Warranty of Merchantability
The statue A.C.A. § 4-2-314 guarantees that goods shall be in a merchantable condition, and that guarantee is implied in any contract for their sale, unless it is specifically waived. In order for goods to be in a merchantable condition there are a number of different criteria that must be met: (1) the goods must pass without objection in the trade under the contract description; (2) the goods must be fit for the ordinary purposes for which such goods are used; (3) the goods must be adequately contained, packaged, and labeled as the agreement may require; and (4) the goods must conform to the promises or affirmations of fact made on the container or label if any.
For instance, in Dupont, the plaintiff, Dillaha, sued DuPont for supplying a defective paint. Dillaha operated an automotive paint and body shop. He consistently purchased paint and other DuPont products sold by the defendant in that case. The cars painted in his shop were returned with millions of tiny bubbles in the finish. Dillaha was forced to paint the cars over numerous times. The paint, provided by the defendant was analyzed and it was indisputably polluted. The court held that there was enough evidence to support Dillaha’s claim of breach of implied warranty of merchantability, because the paint was not in a merchantable condition. E. I. Du Pont de Nemours & Co. v. Dillaha, 280 Ark. 477 (Ark. 1983)
Implied Warranty for Particular Purpose
Implied warranty for fitness for particular purpose is when the plaintiff claims damages from a defendant on the grounds that the product was not fit for the particular purpose for which it was intended. According to A.C.A. § 4-2-315, “where the seller at the time of contracting has reason to know any particular purpose for which the goods are required and that the buyer is relying on the seller’s skill or judgment to select or furnish suitable goods” the implied warranty of fitness for particular purpose is created to ensure that the goods shall be fit for such purpose. In order to recover for a breach of an implied warranty of fitness for particular purpose, the plaintiff has the burden of proving in addition to the elements mention above, that at the time of contracting, the defendant had reason to know the particular purpose for which the product was required; that the defendant knew the buyer was relying on defendant’s skill or judgment to select or furnish the product; and, that the product was not fit for the purpose for which it was required.
In Mack, the plaintiff, Jet Asphalt & Rock Co. filed a suit against defendant Mack Trucks of Arkansas, Inc. The plaintiff made a special order specifying and describing two diesel trucks would need for work, Mack recommended then a specific truck and agreed to deliver it. Jet had many problems with the trucks as they were not fit for what they needed and in the end the company was forced to change the trucks. The Court held that Mack was liable for breach of implied warranty for fitness for particular purpose because the company knew of the purpose for the trucks and the trucks were not fit for the purpose. Mack Trucks of Arkansas, Inc. v. Jet Asphalt & Rock Co., 246 Ark. 101 (Ark. 1969)