(as
published in the Western Business Journal, Spring, 2002)
Historically, the attitude towards merchant sales was to let the buyer beware or “caveat emptor.” This doctrine was premised on the idea that the buyer and seller were on equal footing. The law has since evolved and certain warranties by the seller are now implied in every sale of goods. Article 2 of the Uniform Commercial Code (U.C.C.) covers sales of goods and is codified in Montana, see, Montana. Code Annotated § 30-1-101, et seq.
There are generally two warranties that may be implicit in any sale of “goods.” First, the Warranty of Fitness for a Particular Purpose is implied if it can be shown that the seller at the time of purchase has reason to know a particular purpose for which the goods are required. The buyer must rely on the seller’s judgment or skill when making the purchase. Basically, the seller warrants that the goods sold shall be fit for that particular purpose.
The second warranty is the Implied Warranty of Merchantability. This is a warranty that the goods are fit for the ordinary purposes for which they are used. The purpose is to hold the seller responsible when inferior goods, not of a merchantable standard, are passed on to the unsuspecting buyer.
However, a merchant may disclaim these warranties. There are generally two rules when doing so. First, use the word “merchantability” in the disclaimer and make the language conspicuous. For example, the disclaimer should be in bold or capital letters and in a larger type face. Next, one may use expressions such as “AS IS” or “with all faults” to disclaim implied warranties. Again, these should be easy for the buyer to see.
If you should require further information regarding warranties or other issues under the U.C.C., attorneys at Moulton, Bellingham, Longo & Mather, P.C., can assist you with a full range of commercial legal services.
| Return to Publication List |
|---|