Filter Results CategoriesCart
Highlight Updates

1.5.3 Used Goods

The Magnuson-Moss Warranty Act covers consumer products, without any distinction as to whether the product is new or used. The product must simply be “tangible personal property which is distributed in commerce and which is normally used for personal, family, or household purposes.”107

Likewise, the UCC applies to the sale of both new and used goods. The definition of “goods” at section 2-105(1) makes no distinction between new and used goods. Nor do the Code’s warranty sections make any such distinction. Comment 3 to the section on implied warranty of merchantability, section 2-314, indicates that coverage of second-hand goods was contemplated: “A contract for the sale of second-hand goods, however, involves only such obligation as is appropriate to such goods for that is their contract description.”108

For these reasons virtually all courts considering the issue (usually in the context of used automobiles) have held that Article 2, and specifically the implied warranty of fitness for a particular purpose109 and the implied warranty of merchantability,110 apply to sales of used goods. The extent of the merchant’s obligation will vary depending on the circumstances.111

Alabama is the only state that takes a different view, holding that implied warranties do not arise in the sale of a used car.112 The state supreme court’s decisions involve only the implied warranty of merchantability, however. Alabama courts might take a different view of the implied warranty of fitness for a particular purpose, because the seller makes that warranty by holding out that the goods are suitable for some known use on the part of the buyer.

Some Texas decisions had formerly held that implied warranties did not arise in the sale of used goods.113 These decisions ignored comment 3 to U.C.C. § 2-314 even though Texas had adopted the official comments when it enacted the UCC.114 In 2014 the Texas Supreme Court resolved the issue, holding that the manufacturer’s implied warranties, unless properly disclaimed, extend to subsequent purchasers who buy goods secondhand.115 The court’s language clearly implies that the immediate seller of used goods is also subject to implied warranties.116

Footnotes

  • 107 {99} 15 U.S.C. § 2301(1). See § 2.2.1.1, infra.

  • 108 {100} See Tornow v. Stanford Bros., Inc., 2005 WL 4135450 (Mich. Cir. Ct. Apr. 21, 2005) (scope of implied warranty of merchantability for used car depends on factors such as extent of prior use, buyer’s knowledge, and whether price was significantly discounted).

  • 109 {101} Ram Head Outfitters, Ltd. v. Mecham, 74 U.C.C. Rep. Serv. 2d 261 (D. Ariz. 2011).

  • 110 {102} Enobakhare v. Carpoint, L.L.C., 2011 WL 703920 (E.D.N.Y. Jan. 10, 2011) (mag.), adopted by 2011 WL 704902 (E.D.N.Y. Feb. 16, 2011); Patches Farms, Inc. v. Thompson Mach. Commerce Corp., 69 U.C.C. Rep. Serv. 2d 16 (N.D. Miss. 2008); Diaz v. Paragon Motors of Woodside, Inc., 424 F. Supp. 2d 519 (E.D.N.Y. 2006) (standard for used car is whether it can be used for transportation on streets and highways in a reasonably safe manner); Whittle v. Timesavers, Inc., 614 F. Supp. 115 (W.D. Va. 1985); Moore v. Burt Chevrolet, Inc., 563 P.2d 369 (Colo. Ct. App. 1977); Chamberlain v. Bob Matick Chevrolet, Inc., 239 A.2d 42 (Conn. Cir. Ct. 1967); Ed Fine Oldsmobile, Inc. v. Knisley, 319 A.2d 33 (Del. Super. Ct. 1974); Knipp v. Weinbaum, 351 So. 2d 1081 (Fla. Dist. Ct. App. 1977); Brown v. Hall, 221 So. 2d 454 (Fla. Dist. Ct. App. 1969); Ga. Timberlands, Inc. v. S. Airway Co., 188 S.E.2d 108 (Ga. Ct. App. 1972) (used airplane); Lee v. Peterson, 716 P.2d 1373 (Idaho Ct. App. 1986); Dickerson v. Mountain View Equip. Co., 710 P.2d 621 (Idaho Ct. App. 1985); Lipinski v. Martin J. Kelly Oldsmobile, Inc., 759 N.E.2d 66 (Ill. App. Ct. 2001); Overland Bond & Inv. Corp. v. Howard, 292 N.E.2d 168 (Ill. App. Ct. 1972); Hodges v. Johnson, 199 P.3d 1251 (Kan. 2009); Int’l Petroleum Services, Inc. v. S & N Well Serv., 639 P.2d 29 (Kan. 1982); Mangieri v. Admiral Pontiac, Inc., 14 U.C.C. Rep. Serv. 82 (Md. Cir. Ct. 1974); Fernandes v. Union Bookbinding Co., 507 N.E.2d 728 (Mass. 1987); Johnson v. Fore River Motors, Inc., 26 Mass. App. Dec. 184 (Dist. Ct. 1963); Tornow v. Stanford Bros., Inc., 2005 WL 4135450, at *5 (Mich. Cir. Ct. Apr. 21, 2005); Williams v. College Dodge, Inc., 11 U.C.C. Rep. Serv. 958 (Mich. Dist. Ct. 1972); Gast v. Rogers-Dingus Chevrolet, 585 So. 2d 725 (Miss. 1991) (used car); Fitzner Pontiac-Buick-Cadillac, Inc. v. Smith, 523 So. 2d 324 (Miss. 1988) (used car); Brazeal v. Craig, 683 S.W.2d 329 (Mo. Ct. App. 1984) (implied warranty extends to second-hand, major mechanical components of cars as well as to second-hand cars); Worthey v. Specialty Foam Products, Inc., 591 S.W.2d 145 (Mo. Ct. App. 1979); Stickney v. Fairfield’s Motors, Inc., 9 U.C.C. Rep. Serv. 236 (N.H. Super. Ct. 1970); Realmuto v. Straub Motors, 322 A.2d 440 (N.J. 1974); Ewen v. Congers Auto Sales, Inc., 972 N.Y.S.2d 143 (N.Y. App. Term 2013) (table); Ireland v. J.L.’s Auto Sales, Inc., 574 N.Y.S.2d 262 (N.Y. Justice Ct. 1991) (used car); Rose v. Epley Motor Sales, 215 S.E.2d 573 (N.C. 1975); Buskirk v. Harrell, 2000 Ohio App. LEXIS 3100 (Ohio Ct. App. June 28, 2000); Perry v. Lawson Ford Tractor Co., 613 P.2d 458 (Okla. 1980); Smith v. Sharpensteen, 13 U.C.C. Rep. Serv. 609 (Okla. Civ. App. 1973), rev’d on other grounds, 521 P.2d 394 (Okla. 1974); Roupp v. Acor, 384 A.2d 968 (Pa. Super. Ct. 1978); Crandell v. Larkin & Jones Appliance Co., 334 N.W.2d 31 (S.D. 1983); Patton v. McHone, 822 S.W.2d 608 (Tenn. Ct. App. 1991) (implied warranty of merchantability applies to sale of used car); MAN Engines & Components, Inc. v. Shows, 434 S.W.3d 132 (Tex. 2014); Tracy v. Vinton Motors, Inc., 296 A.2d 269 (Vt. 1972); Testo v. Russ Dunmire Oldsmobile, Inc., 554 P.2d 349 (Wash. Ct. App. 1976). See also Stroklund v. Thompson/Center Arms Co., 64 U.C.C. Rep. Serv. 2d 565 (D.N.D. 2007) (applying U.C.C. express and implied warranty provisions to used good); Wilks v. Ramsey Auto Brokers, Inc., 132 So. 3d 1009 (La. Ct. App. 2014) (Louisiana right of redhibition applies to used car, which must operate reasonably well for a reasonable time); Berney v. Rountree Olds-Cadillac Co., 763 So. 2d 799 (La. Ct. App. 2000) (implied warranty arises under Louisiana Civil Code that used goods will operate reasonably well for a reasonable period of time); Anthony’s Auto Sales, Inc. v. Shephard, 600 So. 2d 125 (La. Ct. App. 1992) (Louisiana warranty statute applies to used goods). See generally § 15.4.2, infra (application of implied warranty of merchantability to used cars).

  • 111 {103} See § 4.2.3.2.5, infra.

  • 112 {104} Bagley v. Creekside Motors, Inc., 913 So. 2d 441 (Ala. 2005). See also Osborn v. Custom Truck Sales & Serv., 562 So. 2d 243 (Ala. 1990) (no implied warranty of merchantability on used cement trucks sold for business purposes); Trax, Inc. v. Tidmore, 331 So. 2d 275 (Ala. 1976) (no implied warranties in sale/leaseback of used tractors; buyer had previously owned them so knew more about them than seller).

  • 113 {105} Southerland v. N. Datsun, Inc., 659 S.W.2d 889 (Tex. App. 1983) (no implied warranty of merchantability arose in consumer purchase of used motor home); Chaq Oil Co. v. Gardner Mach. Corp., 500 S.W.2d 877 (Tex. Civ. App. 1973).

  • 114 {106} See Kendall M. Gray, Comment, Merchantability and Used Goods: Do You Really Get What You Pay For?, 45 Baylor L. Rev. 665 (1993) (criticizing holdings that Code does not cover used goods).

  • 115 {107} MAN Engines & Components, Inc. v. Shows, 434 S.W.3d 132 (Tex. 2014). See also Gupta v. Ritter Homes, Inc., 646 S.W.2d 168 (Tex. 1983) (remanding common law implied warranty claim for trial and holding that implied warranties on houses are automatically assigned from original buyer to later owner).

  • 116 {108} MAN Engines & Components, Inc. v. Shows, 434 S.W.3d 132, 139 (Tex. 2014) (purchaser of used goods could sue immediate seller, who could sue next seller, and so on until manufacturer was brought to account—“a laborious struggle back upstream”).