Question

In: Accounting

1)In a sales contract which party makes warranties, buyer or seller? 2)In contrast to an express...

1)In a sales contract which party makes warranties, buyer or seller?

2)In contrast to an express warranty, implied warranties are made simply by selling an item

3)What is the implied warranty of merchantibility?

4)Can any seller make an implied warranty of merchantibility?

5)What's the difference bewteen the implied warranty of merchantability and the implied warranty of fitness for a particular purpose?

6)Can any seller make the wrranty of fitness for a particular purpose?

7)In order for the warranty of fitness to apply the buyer must prove one thing about the seller and one thing about the buyer...what are those things?

8) As between express warranties, implied warranties of merchantability and implied warranties of fitness for a particular purpose which of these haas the highest priority if there are conflicting warrranties? The lowest?

Solutions

Expert Solution

AAns 1 Obviously the seller makes the warranty or give warranty regarding with the goods he solds to the buyer. Through warranty the seller gives an assurance to the buyer regarding with the quality goods for a particular period of time AND the buyer obtain the right of replacement with respect to the goods he bought from the seller. if in case there is a defect found in it.

Ans 2. An implied warranty is easily formed by simply selling the goods because whenever the goods are sold, implied warranty by default formed with a sale contract, it is not especially needed to stated explicitly like express warranty. unlike express warranty which is mandatory to be stated either verbally or in writing. it is naturally forms with contract of sale.

Ans 3.Most consumer purchases are covered by an implied warranty of merchantability, which means it is guaranteed to work as claimed. For instance, a vacuum cleaner that does not create enough suction to clean an average floor is in breach of the implied warranty of merchantability. Federal law defines "merchantable" by the following criteria:

  • They must conform to the standards of the trade as applicable to the contract for sale.
  • They must be fit for the purposes such goods are ordinarily used, even if the buyer ordered them for use otherwise.
  • They must be uniform as to quality and quantity, within tolerances of the contract for sale.
  • They must be packaged and labeled per the contract for sale.
  • They must meet the specifications on the package labels, even if not so specified by the contract for sale.

Even used goods are covered, although some states allow retailers of either used or new goods to invalidate the implied warranty by stating "sold as is."

Products guaranteed for a different purpose than what the manufacturer explicitly intended come with an implied warranty of fitness. For example, if a shoe salesperson sells you a pair of high heels for running -- assuming you've made it clear that you want shoes for running -- then your purchase is covered under an implied warranty of fitness.

Ans4. No, I personally believe that implied warranty of merchantability depends upon the nature of goods sell by the seller, the seller does not forms it specially, whenever he sells the goods, he bound by the formation of such warranty by default.

.An implied warranty of merchantability is an “assumed” warranty that a product will work for the purpose for which it is intended. This implied warranty applies even when there is no printed or verbal warranty provided when the item is purchased. This type of warranty protects consumers from purchasing defective or misrepresented items.

For example, if Greg purchases a heater to place in his bedroom and, when he plugs it, he discovers it only blows cold air, he is protected by the implied warranty that the heater would be suitable for heating a room. The seller would be obligated to refund Greg’s money or to replace the heater with one that works properly. To explore this concept, consider the following implied warranty of merchantability definition.

Ans 5.A "Warranty of Merchantability" and a "Warranty of Fitness for a Particular Purpose" are both implied warranties (unspoken, unwritten promises). The Warranty of Merchantability is a promise that the vehicle will do what it is supposed to do. This covers the basic functions of the car, such as running. A breach of this warranty exists only if the dealer sold the vehicle to you with an existing condition.

The Warranty of Fitness for a Particular Purpose would apply if the dealer sold a vehicle to you promising that it would serve a certain purpose, such as hauling a trailer or a boat. The vehicle must be able to serve that purpose or the deal may have broken this warranty.

Ans6. Yes,Under the principle of implied warranty, products (goods or services) must be fit for the 'ordinary' use for which they are intended. But where the seller (or provider or manufacturer) knows the buyer's particular use (and the buyer relies on the seller's expertise or judgment in choosing the product) then an 'implied warranty for fitness for a particular purpose' is created. In other words, the seller warranties that the product will be fit for the buyer's specific use. For example, if a buyer buys food for immediate consumption and relies on the food seller's judgment, then there is an implied warranty that the food is fit for immediate consumption.
In industrial purchases, however, if a buyer submits detailed specifications (or if the seller sells on 'as is' basis) the buyer may not claim to have relied on the seller's judgment.

Ans 8.. If express and implied warranties are inconsistent:  (1) express warranties displace implied warranties except implied warranties of fitness for a particular purpose (an express warranty in a contract for a shortwave radio, for example, stating that the radio willreceive signals from 4,000 miles away displaces an implied warranty of fitness that a shortwave radio will pickup signals from any distance, but telling a buyer that the radio will receive signals from 8,000 miles, for whichreason the buyer buys the radio, may violate a warranty of fitness for a particular purpose, which prevails overexpress warranties); (2) samples displace general descriptions; and (3) technical specifications displace samplesor general descriptions


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