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Consumer Warranty Law: Use of a Specific Time Period Can Create a Future Performance Warranty

Use of a specific time period, such as one year, will provide additional support for a finding of explicit extension to future performance.414 “Lifetime” warranties or twenty-year warranties are especially likely to come within the section 2-725(2) exception,415 if for no other reason than a four-year statute of limitations running from the date of tender or delivery would deprive the buyer of the benefit of the seller’s long-term promise.

Consumer Warranty Law: UCC issues

If a warranty promises that the seller will repair or replace any defective part within the warranty period, some courts have held that the breach of that promise arises only when the seller fails or is unable to repair or replace, and the statute of limitations starts running from that later date and not from the date of sale.417 On the other hand, some courts have held that the limitations period runs from the date of sale.418 One court has solved the problem by finding the question to be a jury issue.4

Consumer Warranty Law: Does Future Performance Exception Apply to Implied Warranties?

A number of courts have held that the exception for future performance warranties cannot apply to implied warranties, which by their very nature are not explicit.439 Because implied warranties of fitness for a particular purpose can relate to some future use that the buyer expresses, however, it is possible that a court would find that the statute of limitations for breach of this type of warranty does not begin to run upon delivery.440 A court has, however, rejected a buyer’s argument that language which limited the duration

Consumer Warranty Law: 7.6.5 Seller’s Repair Attempts or Other Conduct May Toll the Limitations Period

Courts generally recognize that the seller’s repair efforts or promises may toll the running of the statute of limitations or equitably estop the seller from asserting the defense.446 Section 1-103(b) provides that “principles of law and equity, including . . . estoppel . . . shall supplement [the Code].”447 Both section 2-725(4) and the comment to that section make it clear that the section does not alter the law on the tolling of the statute of limitations.

Consumer Warranty Law: 7.6.6 Fraudulent Concealment Tolls the Limitations Period

The seller’s fraudulent concealment of a defect can toll the statute.456 Some courts hold that the seller’s failure to disclose a known defect is sufficient to toll the statute of limitations, at least when the seller has a duty of disclosure.457 Other courts, however, hold that the latency of a defect or even the seller’s awareness of a defect is insufficient, alone, to constitute fraudulent concealment.

Consumer Warranty Law: 7.6.10 Limitations Periods for Non-UCC Claims

The problem of the UCC limitations period can be avoided by raising claims under other theories.483 For strict liability, negligence, and fraud claims, the statute of limitations typically runs from the date of discovery or injury.484 In most states, deceptive practices (UDAP) claims similarly run from when the violation was discovered or should have been discovered.485 The state’s lemon law may also have a longer statute of limitations, or a different rule about when the statute begins to run.

Consumer Warranty Law: 7.7.1 Introduction

This section discusses three major defenses to breach of warranty: the buyer’s conduct as the cause of the damage; noncompliance with conditions precedent to warranty coverage; and expiration of the express warranty period. The previous section discussed the statute of limitations as a defense.

Consumer Warranty Law: General

The UCC does not explicitly provide for defenses to warranty actions based on the buyer’s conduct. Nonetheless, the comments to sections 2-314, 2-316, and 2-715 indicate that buyer conduct, if the proximate cause of injury, can bar some or all recovery. Comment 13 to section 2-314 states that an “affirmative showing by the seller that the loss resulted from some action or event following his own delivery of the goods can operate as a defense.” Comment 8 to section 2-316 notes that “if the buyer discovers the defect and uses the goods anyway . . .

Consumer Warranty Law: Buyer’s Negligence

Authorities generally agree that the buyer’s negligence is no defense to a warranty claim when it “consists only in failing to discover the danger in the product or to take precautions against its possible existence.”504 The buyer has a right to assume that a warranted product will not be so defective as to be dangerous in or unsuitable for normal, reasonably anticipated circumstances.505

Consumer Warranty Law: Assumption of Risk

The voluntary and unreasonable disregard of a known and appreciated risk, while sometimes called contributory negligence, is more serious buyer conduct than mere negligent failure to discover or protect against a defect. Although the buyer’s negligence may be reasonably contemplated by the warranty, disregarding a known and appreciated risk usually is not and generally is considered unreasonable conduct.

Consumer Warranty Law: Misuse of the Product

Misuse or abnormal use of the product is generally recognized as a defense to warranty claims, either because the buyer’s misuse is the intervening cause of the damage or because the warranty does not extend to abnormal use.519 If a buyer uses a passenger car for drag racing, the seller will claim that it was the buyer’s abnormal use of the product that caused the damage and/or that the abnormal use is beyond the scope of the warranty.520 In addition to causation, the seller may have to show that the buyer knew that the produc

Consumer Warranty Law: Failure to Abide by Directions for Use

A seller will often direct the buyer to use or maintain the product in a particular fashion. “Inflate tire to 23–28 pounds only,” and “Do not use near open flame” are typical. The directions can be on the product, in the warranty, in the user’s manual, or even given orally. Failure to abide by these directions will be raised as a defense by the seller as failure to comply with a condition precedent, misuse of the product, contributory negligence, or the proximate cause of the malfunction and damage.533

Consumer Warranty Law: 7.7.3 Noncompliance with Conditions to Warranty Coverage

Warranties often expressly condition coverage on performance by the buyer of some duty, such as “Warranty applies only if product is returned postage prepaid to manufacturer” or “Warranty void unless buyer returns ‘warranty card’ to manufacturer within 15 days.” Conditions such as these are not merely instructions on proper maintenance or use of the product,541 although warranty conditions and use instructions may overlap, as in “Product not covered by warranty unless Grade X oil is used.”

Consumer Warranty Law: Determining When Warranty Expires

Many express warranties have a specific duration, such as one year or thirty days. In a suit for breach of the warranty, the seller may claim that the express warranty period already expired before the defect was discovered and brought to the warrantor’s attention.

Consumer Warranty Law: Defects Reported But Not Repaired Before Period Expires

There are several different scenarios in which a seller may attempt to defend against a warranty claim on the ground that the warranty period has expired. When a defect within the scope of the express warranty is discovered and brought to the warrantor’s attention before expiration of the express warranty period, the warrantor must remedy the defect or be liable for breach of the warranty.

Consumer Warranty Law: Defects Not Discovered Until After Period Expires

The more difficult case is when the defect sued upon was discovered after the expiration of the specified warranty period. This is first of all a question of contract construction. Most courts have held that standard warranty language requires that the defect be discovered within the warranty period.570 For example, in Walsh v. Ford Motor Co.,571 the manufacturer promised to repair or replace any parts “found to be defective” within the warranty period.

Consumer Warranty Law: Manufacturer’s knowledge; unconscionability

Courts are reluctant to find that time-limited warranties cover latent defects that are not discovered during the warranty period because of concern that this would nullify the time limit and make the manufacturer a guarantor that the product will be defect-free for its entire life.585 One response to this argument is to show that the manufacturer knew of the defect during the warranty period.

Consumer Warranty Law: Is the length of the warranty period “manifestly unreasonable”?

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.”