Draw the Law, People Issues XII: Customers and Warranties, Part I

Last week I talked about the basics of the CAN-SPAM Act (or advertising through e-mails) and I provided this silly, fake e-mail to show you what NOT to do in your e-mail advertisements.

Anyway, moving to today's topic about warranties, which will also continue onto next week as well . . . .

What is the Purpose of a Warranty?

Warranty law’s goal is “to determine what it is that the seller has in essence agreed to sell.” Some warranties apply to all transaction of goods (and is not just between merchants as some believe).  Basically, when a seller makes a sale of something they guarantee certain aspects and qualities that should be in the product so that the customer is getting what they bargained for.

Types of Warranties

There are two types of warranties, express and implied.  I will cover express this week and follow-up next week with implied.

Express Warranty

An express warranty is exactly as it sounds. It is all of the following:

(a)   Any affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes part of the basis of the bargain creates an express warranty that the goods shall conform to the affirmation or promise.

(b)   Any description of the goods which is made part of the basis of the bargain creates an express warranty that the goods shall conform to the description.

(c)   Any sample or model which is made part of the basis of the bargain creates an express warranty that the whole of the goods shall conform to the sample or model.

See HRS §490:2-313

So based on those definitions these are the typical ways an express warranty can be formed:

  1. oral representations
  2. written representations
  3. description of goods
  4. samples
  5. plans
  6. tech specs
  7. reference to a some sort of standard
  8. the past same goods a seller sends to the buyer
  9. advertisements

For the creation of an express warranty there are no magic formal words. You need not say “I warrant this car gets 30 miles to the gallon in downtown Honolulu.” It can be more casual and conversational, so long as you make a affirmative statement that someone takes is a part of the deal and that the good will conform to what you said, you have an express warranty. In fact, sometimes words do not need be exchanged about the good. Showing a customer a sample or floor model can suffice and saying "this is exactly what you will get" while gesturing to that model can create an express warranty.

Bottom line: While, this looks troublesome for sellers there are ways to disclaim warranties and avoid some liability, especially with overzealous salespeople.  However, let me close out this post with these general thoughts:

  1. When selling stuff to your customers do not make promises you cannot keep.
  2. The line sometimes between “puffing” and over-promising is very fine.
  3. You always want to practice your pitches and sales lines, and go over the script with your sales force.
  4. Finally, any paper (including e-mails and social media stuff) related to the selling of the good you want to make sure you have not inadvertently created express warranties that you cannot keep.

Next week will be a further discussion of warranties, specifically the implied ones of merchantability and fitness for a particular purpose. Also don’t forget to “Subscribe” to this blawg!

*Disclaimer:  This post discusses general legal issues, but does not constitute legal advice in any respect.  No reader should act or refrain from acting based on information contained herein without seeking the advice of counsel in the relevant jurisdiction.  Ryan K. Hew, Attorney At Law, LLLC expressly disclaims all liability in respect to any actions taken or not taken based on the contents of this post.