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Context: This is a question I have while studying for the BAR exam. In Question 2 of this practice exam (page 26), we have a contract for a good valued at $15,000 with an express warranty on its condition and a disclaimer against implied warranties of merchantability and fitness.

Both provided answers note that the express warranty appears to be violated and that alone is sufficient for breach of contract and various damages.

But they both also note that UCC Article 2 would also result in a breach of contract due to the failure of the seller to procure "perfect goods".

My confusion is with the idea of "perfect" or "conforming" goods. The answers seem to suppose that the goods need to be capable of ordinary use in order to be perfect/conforming, but that isn't actually in the contract itself except from the implied warranty of merchantability which was disclaimed.

So where does my understanding run afoul? What makes these goods imperfect if we ignore the express warranty and have disclaimed all implied warranties?

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  • Looking at the question in the test: "SM undertakes, affirms and agrees that this mower is free of defects in material and workmanship at the time of its delivery to the buyer. If the mower or one of its component parts fails within one year of delivery to the buyer because the mower or its component part was defective when installed, SM shall repair or replace at its sole option any such mower or component part at its own cost or expense. Other remedies are excluded." An express warranty was created here regardless of the "disclaimer" later which is subject to U.C.C. &/ Magnusson-Moss.
    – kisspuska
    Jul 12 at 3:20
  • This might be the culprit under U.C.C., but I would not submit this as an answer, only share it as it may be worth reviewing: U.C.C. § 2-316. (1) law.cornell.edu/ucc/2/2-316
    – kisspuska
    Jul 12 at 3:34
  • Free of material or workmanship defects at the time of delivery implies that it is at least usable for the ordinary purpose of the goods; disclaiming an implied warranty that the "wheel [comes] off" under normal use is almost a hint that it is unreasonable. (Think the saying: "Push it until the wheels come off", meaning to subject yourself or something else to an excessive use.) Disclaiming the implied warranty that the mower is merchantable to the extent that is implied in the defect free (in material and workmanship) is simply unreasonable disclaiming per U.C.C. § 2-316 (1):
    – kisspuska
    Jul 12 at 4:37
  • "[…]negation or limitation is inoperative to the extent that such construction is unreasonable." I don't agree with the analysis of the example answer. It may pass, but I think you can do better.
    – kisspuska
    Jul 12 at 4:38
  • Thank you for the answers, though @kisspuska - isn't that statement regarding the lack of defects the express warranty itself? In other words, I fully understand why that text is sufficient to prove breach of contract. When trying to understand the UCC Article 2 implications, I was ignoring that express warranty text since it was by itself sufficient, and the answers seemed to imply that UCC Article 2 had a different mechanism to lead to breach of contract notwithstanding the express warranty. Jul 12 at 15:42
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In short:

The implied warranty could not have been revoked under, at least, the Song-Beverly Consumer Warranty Act.

Warranting that a consumer goods in written promises and disclaiming that it is merchantable seem, at face value, a contradiction in term.

In detail:

Pursuant to subdivision (c) of Civ. Code § 1791.1:

The duration of the implied warranty of merchantability and where present the implied warranty of fitness shall be coextensive in duration with an express warranty which accompanies the consumer goods, provided the duration of the express warranty is reasonable; but in no event shall such implied warranty have a duration of less than 60 days nor more than one year following the sale of new consumer goods to a retail buyer. Where no duration for an express warranty is stated with respect to consumer goods, or parts thereof, the duration of the implied warranty shall be the maximum period prescribed above.

A relevant precedent was repeatedly confirmed that even if there wasn't set a date for the express warranty or a date that was longer than a year was set, the implied warranty may survive for "latent" defects:

“More specifically, California Civil Code § 1791.1(c) provides that implied warranties of merchantability last for a minimum duration of sixty days. It follows that Plaintiffs' implied warranty explicitly extends to future performance. See Kaiser Cement & Gypsum Corp. v. Allis-Chalmers Mfg. Co., 35 Cal. App. 3d 948, 960 (1973). The Discovery Rule therefore applies, meaning Plaintiffs' implied warranty claim is time barred only if they actually discovered the breach or should have discovered the breach before January 8, 2014, or four years before they filed their complaint on January 8, 2018.” (Audo v. Ford Motor Co., Case No.: 3:18-cv-00320-L-KSC (S.D. Cal. Jul. 6, 2018)) Mexia v. Rinker Boat Co., 174 Cal.App.4th 1297, 95 Cal. Rptr. 3d 285, 294 (2009)

And a similar finding was expressed in Kaiser Cement & Gypsum Corp. v. Allis-Chalmers Mfg. Co., 35 Cal. App. 3d 948, 960 (1973)

"In Aced v. Hobbs-Sesack Plumbing Co., 55 Cal. 2d 573, 584 [12 Cal. Rptr. 257, 360 P.2d 897], our Supreme Court stated the principles of prospective warranties as follows: "... if a warranty relates to a future event before which the defect cannot be discovered by the exercise of reasonable diligence, the warranty, though accompanied by a representation as to present condition, is prospective in character and the statute of limitations begins to run as of the time of that event. ... [T]he principle in question had been followed with respect to implied as well as express warranties, and it has long been recognized in this state that the time when the statute of limitations begins to run is the same whether a warranty is express or implied."

Also, implied warranties may only be disclaimed in strict compliance with the provisions and requirements of the Song-Beverly Act (if the goods are subject to its provisions) relating to "as is" or "with all faults" sales. Civ. Code § 1792.3 provides:

No implied warranty of merchantability and, where applicable, no implied warranty of fitness shall be waived, except in the case of a sale of consumer goods on an “as is” or “with all faults” basis where the provisions of this chapter affecting “as is” or “with all faults” sales are strictly complied with.

The provisions governing this, inter alia, are Civ. Code §§ 1792.4 (1)-(3), 1792.5 and, most importantly, Civ. Code § 1793. prohibits disclaiming any implied warranties guaranteed by the Song-Beverly Act which, as relevant herein, provides that:

[A] manufacturer, distributor, or retailer, in transacting a sale in which express warranties are given, may not limit, modify, or disclaim the implied warranties guaranteed by this chapter to the sale of consumer goods.

As I presumed based on the coextensivity provision: You can't sell a consumer goods of such price with an express warranty and no implied warranty even if you try going "as is" or "with all faults and defects".


Conforming

A consumer goods can only be "conforming" or may only conform to an express warranty not to an implied warranty since the latter means, as relevant here, that it pass without objection in the trade under the contract description (§ 1791.1 (a)(1)) and that it is fit for the ordinary purposes for which the consumer goods is used (§ 1791.1 (a)(2)).

"New motor vehicle" (§ 1793.22 (e)(2))

New motor vehicle” means a new motor vehicle that is bought or used primarily for personal, family, or household purposes. “New motor vehicle” also means a new motor vehicle with a gross vehicle weight under 10,000 pounds that is bought or used primarily for business purposes by a person, including a partnership, limited liability company, corporation, association, or any other legal entity, to which not more than five motor vehicles are registered in this state. “New motor vehicle” includes […] other motor vehicle sold with a manufacturer’s new car warranty.

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  • I am wary and unsure if this is actually a correct answer because of the use of the word "car" whether or not this would apply to a commercial tractor mower, but the relevant facts need to be present in the question and not referenced outside. (Based off of that and in reply to that did I compose this answer)
    – kisspuska
    Jul 12 at 3:17
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    Thank you, this makes a lot of sense! The Song-Beverly Act as you say seems to expressly disallow disclaiming warranties unless the contract states that the goods are sold as-is, that the buyer takes on all risk to the quality of the goods, and that the buyer is responsible for all servicing and repair. So the disclaimer is clearly insufficient to actually remove the implied warranties of merchantability and fitness. Jul 12 at 15:57
  • Please look at the comments because my answer was drafted based on the facts presented in the question ONLY and it did not consider almost any facts that was linked in the test. But I did try to give my best guess for the fact patterns presented the test question too!
    – kisspuska
    Jul 12 at 16:04
  • If I were the defendant, I would definitely argue that the commercial vehicle is not subject to Song-Beverly and therefore neither the question nor the answer reflect well on the test you linked.
    – kisspuska
    Jul 12 at 16:07
  • Ahh, good point, I missed the definition of "consumer goods", but then I agree that that act cannot apply here. Then I am still a bit confused on how we can find that the goods tendered are nonconforming to the contract if we ignore the express warranty. That only matters in understanding the answers to the question, as for some reason both answers went to length to explain that not only was the express warranty violated, but the UCC Article 2 was violated due to nonconforming goods being tendered (without reference to the express warranty). Jul 12 at 18:47

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