Warranties and Liabilities Case Study

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Ethics, Legal, Politics Case Studies

WARRANTY AND ENVIRONMENTAL LIABILITIES

Breach of Warranty. A warranty is a part of a contract of the sale of certain goods (Farlex Inc., 2014). It is either an express or implied assurance that the purchased good or item will perform at a certain level of efficiency. The warranty is express when the seller or manufacturer affirms facts about the item being purchased. An implied warranty is fixed and enforced by law, i.e., the product liability law. This law guarantees or protects product quality or suitability for use, and merchantability. The Uniform Commercial Code covers these and other warranties (Farlex, Inc.). A case of product liability can occur when the buyer suffers in any way from the use of the product as a consequence of reliance or trust in the product and its warranties (Rot Law, 2011). The injured person can make a breach of warranty claim-based either on an express or implied warranty (Rot Law).

Section 1. The manufacturer of the air conditioner purchased by Arvo Lake breached the warranty for consequential damages (Willinton, 2013).

Section 2. The damage in Lake's case was foreseeable. It is the manufacturer's responsibility to make sure that every item he produces and sells is in optimum condition as he expressly and implicitly guarantees. Every unit of his product line should pass rigorous standards of quality and performance and inspected carefully for all foreseeable defects, such as a hole in the refrigeration system in Lake's air conditioner.

Section 3. Yes. The manufacturer or seller is responsible for the natural consequences of the breach of warranty (Willinton, 2013).

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Ultimately, yes. The manufacturer or seller knows, or should know, everything about his product. When he expressly or implicitly warrants that it will function or perform at a certain level of quality or efficiency, he holds himself responsible for the entire range of extensive liabilities when it fails. He should, or is expected to, foresee all negative consequences to any failure in its use In the case of Lake, who was a retired 71-year-old man, a natural consequence of a hole in the purchased air conditioning unit would be the cessation of cooling, high temperature, hyperthermia, circulatory failure and death.

Limitations to product liability on account of natural consequences would be the delay or inability to deliver a product because of fire, strike, accidents, riots, mass actions (Synquest, 2010). There is no liability for loss or damage due to special or unavoidable causes beyond one's reasonable control (Synquest).

Section 2 -- Environmental Liability and Due Process. (Justia, 1991)

The U.S. Court of Appeals, First Circuit, on October 29, 1991 ruled that the placing of a lien on the Reardons' property without prior hearing in a court of law or administrative hearing was not unconstitutional (Justia, 1991). It found the imposition by the Environmental Protection Agency or EPA under the Comprehensive Environmental Response Compensation and Liability Act or CERCLA did not constitute a deprivation of property or procedural due process. The court decided that the lack of re-enforcement review under CERCLA was not a challenge to the lien imposed. The lien was meant to secure funds for clean costs at a toxic waste location. The Reardons.....

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