1.2.8 Strict Liability and Negligence; Common Law Warranty Law; Cooling-Off Statutes
The UCC and the Magnuson-Moss Warranty Act do not apply to repairs and service transactions (although they may apply to mixed transactions involving both goods and services). The main sources of warranty law for repair and service transactions are common law warranty and negligence law. Courts may, however, borrow Article 2 principles when interpreting these common law sources. Common law warranties are examined in § 19.4, infra.
Another important warranty protection relating to home improvements and related services is the ability to cancel door-to-door sales within three business days (or sometimes until certain disclosures are provided). This cancellation right may be provided under the Federal Trade Commission’s Cooling-Off Rule, analogous state laws, or the Truth in Lending Act. These and other cancellation rights are examined in § 19.8.1, infra.
Negligence law is useful not only in service transactions, but also in the sale or lease of goods. A related tort, strict liability, does not apply to service transactions, but applies to the sale or lease of goods. Both these tort theories may be useful in dealing with goods transactions because they avoid UCC limitations dealing with parol evidence, warranty disclaimers, privity requirements, limitations on remedies, and the like. Negligence and strict liability are examined in Chapter 12, infra. The major weakness of these claims is that many jurisdictions will not recognize them, even in consumer transactions, for recovery of purely economic injury. In these states, the torts will only be allowed to remedy personal injury and property damage.48