Question

In: Operations Management

Warranties can be created when a seller affirms that the goods meet certain standards of quality,...

Warranties can be created when a seller affirms that the goods meet certain standards of quality, description, performance, or condition. These warranties are
a. Express
b. Implied
c. Executed
d. Executory
Why A?

Your explanation should compare express and implied warranties


Solutions

Expert Solution

A is right because the terms and standards of quality, performance, description and condition are expressly affirmed by the seller. These warranties are express because every commitment about above factors is either orally or in written form. The example of an express warranty is an assurance of working of a fan motor for first two years of its operation. It means that If the motor fails during this period, the seller is expected to replace or repair the item free of cost.

On contrast, the implied warranty of merchantability from the seller is an assurance that the product will work as expected, to accomplish  the function it is intended for. For example, a water heater is expected to heat the water and it should be safe for operation under ordinary conditions of use. This is implied warranty from the seller, even if it has not been stated orally or is in writing. For the breach of implied warranty, the seller is automatically liable.


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