Warranties and disclaimers under the UCC - Next Generation Bar Exam

1. Under UCC 2-314, when does the implied warranty of merchantability arise?

   When the seller is a merchant with respect to goods of that kind. A casual seller who does not deal in such goods gives no warranty of merchantability.

2. How does a buyer's pre-contract examination of the goods affect implied warranties?

   Implied warranties do not cover defects the examination ought to have revealed. The same rule applies if the buyer refuses the seller's demand to examine the goods.

3. Under UCC 2-315, what creates an implied warranty of fitness for a particular purpose?

   The seller has reason to know the buyer's particular purpose and that the buyer is relying on the seller's skill or judgment. Unlike merchantability, this warranty can be given by a non-merchant seller.

4. Under Alternative A of UCC 2-318, to whom do a seller's warranties extend beyond the buyer?

   Family or household members and guests in the buyer's home who may be expected to use the goods and are injured in person. States have adopted different alternatives; Alternative A is the narrowest.

5. What effect does language such as 'as is' or 'with all faults' have on implied warranties?

   It excludes all implied warranties. Such expressions make plain that the buyer takes the risk of quality.

6. Under UCC 2-313, what creates an express warranty?

   An affirmation of fact, promise, description, sample, or model about the goods that is part of the basis of the bargain. No formal words such as 'warrant' or 'guarantee' are needed, and specific intent to warrant is not required.

7. A buyer tells a hardware clerk she needs paint for a boat hull. The clerk recommends a product, she buys it, and it peels in salt water. Which warranty was breached?

   The implied warranty of fitness for a particular purpose. The seller knew the particular purpose and the buyer relied on its recommendation.

8. How does UCC 2-316(1) treat a disclaimer that conflicts with an express warranty?

   The disclaimer is inoperative to the extent the two cannot reasonably be read as consistent. A seller cannot create an express warranty and then disclaim it in boilerplate.

9. Under UCC 2-314, what is the core standard of merchantability?

   The goods must be fit for the ordinary purposes for which such goods are used. Merchantable goods must also pass without objection in the trade and be adequately packaged and labeled.

10. Under UCC 2-312, what does the warranty of title promise?

    Good title, rightful transfer, and goods free of any security interest or lien the buyer did not know of. The warranty may be excluded only by specific language or circumstances showing the seller does not claim title.

11. A sales contract's fine print says 'no implied warranties' in ordinary type, without mentioning merchantability. On what ground is the disclaimer ineffective as to merchantability?

    It neither mentions merchantability nor is conspicuous. UCC 2-316(2) requires both for a written disclaimer of merchantability.

12. Under UCC 2-316, what form must a disclaimer of the implied warranty of fitness take?

    A conspicuous writing. General language, such as 'there are no warranties beyond the description,' suffices for fitness if written and conspicuous.

13. Under UCC 2-316, what must a disclaimer of the implied warranty of merchantability include?

    The word 'merchantability' and, if written, conspicuous presentation. An oral disclaimer of merchantability is possible but must mention merchantability.

14. Under UCC 2-607(3)(a), what must a buyer who has accepted goods do to preserve a claim for breach?

    Notify the seller of the breach within a reasonable time after discovering it. Failure to give timely notice bars any remedy for the breach.

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