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Consumer Warranty Law: Section 2-106. Definitions: “Contract”; “Agreement”; “Contract for Sale”; “Sale”; “Present Sale”; “Conforming” to Contract; “Termination”; “Cancellation”.

(1) In this Article unless the context otherwise requires “contract” and “agreement” are limited to those relating to the present or future sale of goods. “Contract for sale” includes both a present sale of goods and a contract to sell goods at a future time. A “sale” consists in the passing of title from the seller to the buyer for a price (Section 2-401). A “present sale” means a sale which is accomplished by the making of the contract.

Consumer Warranty Law: Section 2-107. Goods to Be Severed From Realty: Recording.

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(2) A contract for the sale apart from the land of growing crops or other things attached to realty and capable of severance without material harm thereto but not described in subsection (1) or of timber to be cut is a contract for the sale of goods within this Article whether the subject matter is to be severed by the buyer or by the seller even though it forms part of the realty at the time of contracting, and the parties can by identification effect a present sale before severance.

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Consumer Warranty Law: Section 2-201. Formal Requirements; Statute of Frauds.

(1) Except as otherwise provided in this section a contract for the sale of goods for the price of $500 or more is not enforceable by way of action or defense unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by his authorized agent or broker. A writing is not insufficient because it omits or incorrectly states a term agreed upon but the contract is not enforceable under this paragraph beyond the quantity of goods shown in such writing.

Consumer Warranty Law: Section 2-202. Final Written Expression: Parol or Extrinsic Evidence.

Terms with respect to which the confirmatory memoranda of the parties agree or which are otherwise set forth in a writing intended by the parties as a final expression of their agreement with respect to such terms as are included therein may not be contradicted by evidence of any prior agreement or of a contemporaneous oral agreement but may be explained or supplemented

(a) by course of dealing or usage of trade (Section 1-205) or by course of performance (Section 2-208); and

Consumer Warranty Law: Section 2-209. Modification, Rescission and Waiver.

(1) An agreement modifying a contract within this Article needs no consideration to be binding.

(2) A signed agreement which excludes modification or rescission except by a signed writing cannot be otherwise modified or rescinded, but except as between merchants such a requirement on a form supplied by the merchant must be separately signed by the other party.

Consumer Warranty Law: Section 2-302. Unconscionable Contract or Clause.

(1) If the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result.

Consumer Warranty Law: Section 2-313. Express Warranties by Affirmation, Promise, Description, Sample.

(1) Express warranties by the seller are created as follows:

(a) 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.

(b) 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.

Consumer Warranty Law: Section 2-314. Implied Warranty: Merchantability; Usage of Trade.

(1) Unless excluded or modified (Section 2-316), a warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind. Under this section the serving for value of food or drink to be consumed either on the premises or elsewhere is a sale.

(2) Goods to be merchantable must be at least such as

(a) pass without objection in the trade under the contract description; and

Consumer Warranty Law: Section 2-315. Implied Warranty: Fitness for Particular Purpose.

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, there is unless excluded or modified under the next section an implied warranty that the goods shall be fit for such purpose.

Official Comment

Purposes of Changes:

Consumer Warranty Law: Section 2-316. Exclusion or Modification of Warranties.

(1) Words or conduct relevant to the creation of an express warranty and words or conduct tending to negate or limit warranty shall be construed wherever reasonable as consistent with each other; but subject to the provisions of this Article on parol or extrinsic evidence (Section 2-202) negation or limitation is inoperative to the extent that such construction is unreasonable.

Consumer Warranty Law: Section 2-317. Cumulation and Conflict of Warranties Express or Implied.

Warranties whether express or implied shall be construed as consistent with each other and as cumulative, but if such construction is unreasonable the intention of the parties shall determine which warranty is dominant. In ascertaining that intention the following rules apply:

(a) Exact or technical specifications displace an inconsistent sample or model or general language of description.

(b) A sample from an existing bulk displaces inconsistent general language of description.

Consumer Warranty Law: Section 2-508. Cure by Seller of Improper Tender or Delivery; Replacement.

(1) Where any tender or delivery by the seller is rejected because non-conforming and the time for performance has not yet expired, the seller may seasonably notify the buyer of his intention to cure and may then within the contract time make a conforming delivery.

(2) Where the buyer rejects a non-conforming tender which the seller had reasonable grounds to believe would be acceptable with or without money allowance the seller may if he seasonably notifies the buyer have a further reasonable time to substitute a conforming tender.

Consumer Warranty Law: Section 2-515. Preserving Evidence of Goods in Dispute.

In furtherance of the adjustment of any claim or dispute

(a) either party on reasonable notification to the other and for the purpose of ascertaining the facts and preserving evidence has the right to inspect, test and sample the goods including such of them as may be in the possession or control of the other; and

Consumer Warranty Law: 19.9.7.4 Raising Contractor-Related Claims and Defenses Against the Holder of the Obligation

Asserting claims and defenses against the entity that financed the transaction is another way to deal with the contractor’s insolvency. The financer will often be able to pay a judgment even if the contractor cannot. In most cases a consumer who has valid defenses against the contractor is entitled to withhold payment from, or even assert affirmative claims against, the financier.

Consumer Warranty Law: 19.9.7.5 Other Theories of Lender Liability

In addition to the derivative liability created by the FTC Holder Rule, an entity that finances home improvement contracts may be liable in its own right if it participated in the contractor’s fraudulent conduct, failed to warn the consumer of fraud of which it was aware, or directed the fraudulent conduct of its agent.

Consumer Warranty Law: 19.9.8.1.3 Photographs and witnesses

Obtain good, clear pictures of work that was done, unfinished work, resulting damages, and remaining debris. Photographs should show as much detail as possible, and should include both close-ups and distance shots of the overall area. The photographs need not be taken by a professional photographer. The consumer, who will probably be a witness in the case, can take them. Have the person who took the photographs label them immediately upon receiving them, as close as possible to the actual taking of them.

Consumer Warranty Law: 19.9.8.1.4 The opposing parties

Keep tabs on the opposing parties. If one is a corporation or other entity, check periodically with the appropriate agencies as to its status and addresses, and so forth. If an entity is not a corporation, it may be doing business under an assumed name. If so, it may be required to register with a governmental agency. Is the contractor required to be licensed? Is it licensed? If not, the contractor may not be able to enforce its contracts. Is the entity required to be bonded or to set up an escrow account, and has it done so?

Consumer Warranty Law: 19.9.8.2 Pleading Tips

Home improvement litigation often begins with the lender suing the homeowner in a mortgage foreclosure action. In such cases, if court rules allow, the homeowner should bring the contractor and its principals in as third party defendants, even though they may not be the deep pockets. This allows a broader exploration of the consumer’s defenses and claims without limitations based on the lender’s liability and can be used as a vehicle for presenting the entire story to the jury, which will probably be aligned in sympathy with the consumer.

Consumer Warranty Law: 19.9.8.3 Dealing with Mortgages and Liens on the Consumer’s Home

Most home improvement contracts are secured by a mortgage on the home, either in the name of the contractor or in the name of a financer. In addition, statutory liens such as mechanic’s liens can arise. Subcontractors who have no direct contractual relationship with the buyer may have a lien if the contractor has not paid them. The enforceability of home mortgages and statutory liens is a complex area covered in NCLC’s Home Foreclosures.242 This subsection examines several practice tips.

Consumer Warranty Law: 19.9.8.4 Discovery

Discovery will be necessary to obtain facts regarding the nature of the transaction, the parties and their relationships. The pleadings should be phrased broadly enough to encompass all possible characterizations of the transaction so as to avoid any relevancy or “fishing” objections in discovery.