Business Law Case Study 4

In: Business and Management

Submitted By huskerchas
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Written Assignment 4
Case Study
A dealer sold a new car to Raymond Smith. The sales contract contained language expressly disclaiming liability for personal injuries caused as a result of defects in the car and limiting the remedy for breach of warranty to repair or replacement of the defective part. One month after purchasing the auto, Smith was seriously injured when the car veered off the road and into a ditch as a result of a defect in the steering mechanism of the car. * If Smith sues the dealer for breach of warranty and the dealer defends by relying on the contract disclaimer, what would be the result and why? * In your essay, be sure to cite information on warranty and UCC Article 2.
For buyers who have returned a product that simply didn’t work, they have benefited from the implied warrant of merchantability. This warranty guarantees that a product sold by a merchant will work when it’s used for its intended purposes. That is what’s called an “implied warranty” meaning it exists without a need to be written or spoken. A commercial seller does not have to tell a buyer that the product is guaranteed to work for its usual purpose because the law itself creates that warranty.
The Implied Warranty of Merchantability falls under the Uniform Commercial Code (UCC) 2-314. The warranty is based off the idea that the seller should know whether a product will perform properly or not and encourages sellers to focus on quality assurance before putting products on the market. An implied warranty for merchantability guarantees that a product will work as expected.
In this case, the dealer created a limited warranty concerning the repair or replacement of the defective part which they cannot do under the implied warranty of merchantability (UCC 2-314). As previous stated, this requires that the vehicle is to be fit for the ordinary purposes for which the…...

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