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As with present characteristic or condition warranties, many specific performance warranties set clear standards. For example, “the boat will not leak,” “the car will not rust,” or “I will deliver a valid state inspection sticker” present no interpretation problems. Nonconformity can be determined by the court as a matter of law because reasonable minds cannot differ.

Usually, however, performance warranties involve some uncertainty even if the standard appears clear. The promise, “these storm windows will slash your heating bill twenty-five percent,” raises a number of issues:

Performance warranties raise the important problem of determining the length of time for which the future operation is warranted. When the seller promises, for instance, that paint will not peel or floor covering will not crack, it must be determined whether the promised performance should last for a month, a year, or longer. Some performance warranties specify a warranty period, such as a battery “will hold its charge for forty-eight months”; a tire “will not blow out for 36,000 miles.” The promises last only until the period expires.

In general, warranties are treated like other types of contracts, interpreted according to general contract principles.¹⁸⁰ If the language of the warranty is ambiguous, and the language appears in a form prepared by the seller (which will almost always be the case in a consumer transaction), then the ambiguity must be resolved against the drafter.¹⁸¹ In addition, limitations on warranties will be construed strictly, in accordance with public policy which does not favor modifications of warrantie

Many express warranties are written to guarantee against defects in “materials or workmanship.” Although there is substantial contrary authority,²⁰² better-reasoned decisions construe warranties against defects in materials and workmanship to cover design defects, as workmanship includes the quality and skill that is part of the design process for the product.²⁰³

The implied warranty of merchantability arises by operation of law in every sale of goods by a merchant, unless properly disclaimed.²¹² The warranty promises that goods are merchantable at the time they leave the warrantor’s control, usually at delivery. Merchantability is a standard of quality or condition, but only at delivery.²¹³ It does not promise any level of performance.

As the implied warranty of merchantability promises merchantable condition at delivery,²³⁷ it is a present condition rather than a future performance warranty.²³⁸ Specifically, the buyer must show that something was wrong with the product and that the deficiency existed at delivery even if not observed at the time by the buyer.²³⁹ The fact that a defect did not manifest itself until sometime after delivery does not mean it did not exist at delivery

The implied warranty of fitness for a particular purpose arises by operation of law when the seller has reason to know that the buyer wants the goods for a particular purpose and the buyer relies upon the seller to furnish goods to meet that purpose.²⁴³ Usually this warranty is a present condition or characteristic warranty because it promises that the goods at the time of sale are capable of doing the buyer’s particular job.²⁴⁴ However, in theory, the implied warranty of fitness for a particula

If a specific defect can be established, some courts have allowed a claim of breach of warranty to go forward even though the defect has not yet caused the product to malfunction.²⁵² This conclusion is consistent with the UCC’s basic measure of damages for breach of warranty: the difference between the value of the goods if they had been as warranted and their actual value.²⁵³ It is also mandated by the “perfect tender” rule that all that need be shown to establish breach of warranty is that the

A deceptive practices (UDAP) claim may offer advantages when the defective product has not yet malfunctioned. While most state UDAP statutes impose some sort of injury requirement,²⁸³ many are interpreted broadly to allow suit whenever consumers have received something less than they bargained for.²⁸⁴

The burden of proving that the goods failed to meet the warranty standard is on the buyer,³¹² but only if the buyer accepted the goods. If the buyer rejected the goods, that is, sought to return them to the seller within a short time after delivery, the burden is on the seller to show that the goods met the warranty standards.³¹³ The buyer need not prove any fault on the part of the seller but only that the goods were defective.³¹⁴

Courts have almost universally adopted the principle that the buyer need not show the precise reason for a malfunction, but can rely on circumstantial evidence to establish defective or unmerchantable condition.³²⁵ For example, the fact that a product caught fire during normal use is sufficient evidence that it was defective.³²⁶ The consumer need prove only the effect of a defect or a malfunction, not its cause.³²⁷

Ideally, the buyer should present direct evidence of the defective condition at delivery through detailed testing and analysis of the product, with resolute and positive expert testimony. In most cases, however, the buyer must settle for something less. The amount at stake and the buyer’s finances may make extensive expert analysis unrealistic. Even when money is not a problem, the goods may defy precise analysis or may have been destroyed by the alleged defect.

Eyewitness testimony is most credible when the defect manifests itself soon after delivery.³⁴³ In Riley v. Ken Wilson Ford, Inc.,³⁴⁴ the court found that the fact that the automobile oil warning light came on while plaintiffs drove the vehicle home after purchase was evidence that problems existed at the beginning.

Eyewitness testimony is especially troublesome when the manufacturer or wholesaler is sued for breach of the implied warranty of merchantability and the goods are in the possession of an intermediate party—the retailer—before reaching the buyer. The manufacturer is only responsible for the goods until they are delivered to the retailer. The buyer will have to show that the defect existed when the goods were delivered to the retailer.³⁴⁸

When relying on circumstantial evidence, and especially eyewitness testimony of poor performance, the buyer should always present evidence of proper use and maintenance of the goods, supporting the inference that the defect resulted from an inherent deficiency in the goods rather than from improper use, improper maintenance, or other intervening cause.³⁴⁹ In Winston Industries, Inc. v.

The buyer may be able to elicit admissions by the seller that the product was defective at delivery. In Hensley v. Colonial Dodge, Inc.,³⁵⁶ a used car broke down a week after purchase. When the buyer towed the car back to the seller, the seller’s manager stated that the engine had to be replaced.

The seller’s repair efforts at no charge or at a reduced charge, or promises to repair on that basis, are strong evidence that a defect existed at delivery and that it is covered by warranty.³⁶⁰ The seller would not work on the problem at less than full cost unless there was some liability under a warranty. Even when the repair was initially successful, subsequent problems of the same type demonstrate that the repair under warranty was not fully successful and the seller or manufacturer should be liable.

The buyer can enhance eyewitness testimony of poor performance through evidence that a replacement part or product worked well when the original part or product did not. This evidence shows that the fault probably did not lie in the buyer’s method of use, the environment, or other external factors.³⁶³

Mass production has made products interchangeable and nearly identical, meaning that a buyer’s problem with a product will often be shared by other buyers.

The length of the express warranty period itself may be “manifestly unreasonable” and therefore invalid. Section 1-302 provides: “Whenever this Act requires any action to be taken within a reasonable time, any time which is not manifestly unreasonable may be fixed by agreement.” Comment 1 to section 1-302 explains that “provision is made [in section 1-302] for disregarding a clause which whether by inadvertence or overreaching fixes a time so unreasonable that it amounts to eliminating all remedy under the contract.”

This appendix analyzes state new car “lemon laws.” Practitioners should use this appendix for easy reference to their own state’s statute, and to compare their statute with other states’ laws. All fifty states and the District of Columbia now have new car lemon laws. This analysis is a summary and should be used as a beginning to a thorough reading of the statute itself. As terms are not always defined in a statute, it may be helpful to determine how another state has defined a term or how a court has interpreted the statute.

Ala. Code. §§ 8-20A-1 to 8-20A-6

Vehicles covered: All vehicles, new or previously untitled, that are under 10,000 lbs., self-propelled, and intended primarily for operation on public highways (§ 8-20A-1(2)). Excludes motor homes. No reference to leased vehicles.

Persons covered: Purchasers or any persons entitled to enforce the warranty if vehicle used in substantial part for personal, family, or household purposes (§ 8-20A-1(1)).

Alaska Stat. §§ 45.45.300 to 45.45.360

Vehicles covered: Vehicles normally used for personal, family, or household purposes and registered under Alaska Stat. §§ 28.10.011 to 28.10.661; excludes tractors, farm vehicles, and off-road vehicles (§ 45.45.360(6), (8)). No reference to leased vehicles. Alaska also has a lemon law for boats, all-terrain vehicles (ATVs), snowmobiles, and similar vehicles: Alaska Stat. §§ 45.27.100 to 45.27.395 (§ 45.27.190).

Ariz. Rev. Stat. Ann. §§ 44-1261 to 44-1267

Vehicles covered: Vehicles under 10,000 lbs. that are designed primarily for transportation of persons or property; excludes living portions of motor homes (§ 44-1261(A)(2), (B)). Includes used motor vehicles (§§ 44-1261(A)(3), 44-1267). No reference to leased vehicles.

Persons covered: Purchasers, transferees during express warranty period, or any person entitled to enforce the warranty (§ 44-1261(A)(1)).

Ark. Code Ann. §§ 4-90-401 to 4-90-417