BUSINESS LAW

The Pet Shop owner is planning to open a new store in Cupertino. However, he has
become concerned about implied warranties under the Uniform Commercial Code
(since liability is a major concern for businesses in California). The Shop owner
has come to you for advice how to protect his store from implied warranty liability
under the UCC.

Review the Warranty provisions of Article 2 of the Uniform Commercial Code (UCC
Sections 2-312 through 2-316 on pages B11 – B12 of Appendix B in the textbook).

Draft a notice for the Pet Shop owner to display in the new store to disclaim the
implied warranties of fitness and merchantability that would otherwise be
incorporated into every contract of sale under the warranty provisions of the UCC.

Include additional exculpatory language that could help in defending claims that
might be asserted by any disgruntled purchaser. Be as creative as you wish, but

please limit the total notice to 200 words or less.

UCC IMPLIED WARRANTIES

2314. (1) Unless excluded or modified (Section 2316), a warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind. Under this section the serving for value of food or drink to be consumed either on the premises or elsewhere is a sale.
(2) Goods to be merchantable must be at least such as

(a) Pass without objection in the trade under the contract description; and

(b) In the case of fungible goods, are of fair average quality within the description; and

(c) Are fit for the ordinary purposes for which such goods are used; and

(d) Run, within the variations permitted by the agreement, of even kind, quality and quantity within each unit and among all units involved; and

(e) Are adequately contained, packaged, and labeled as the agreement may require; and

(f) Conform to the promises or affirmations of fact made on the container or label if any.

(3) Unless excluded or modified (Section 2316) other implied warranties may arise from course of dealing or usage of trade.

2315. Where the seller at the time of contracting has reason to know any particular purpose for which the goods are required and that the buyer is relying on the seller’s skill or judgment to select or furnish suitable goods, there is unless excluded or modified under the next section an implied warranty that the goods shall be fit for such purpose.

2316. (1) Words or conduct relevant to the creation of an express warranty and words or conduct tending to negate or limit warranty shall be construed wherever reasonable as consistent with each other; but subject to the provisions of this division on parol or extrinsic evidence (Section 2202) negation or limitation is inoperative to the extent that such construction is unreasonable.

(2) Subject to subdivision (3), to exclude or modify the implied warranty of merchantability or any part of it the language must mention merchantability and in case of a writing must be conspicuous,
and to exclude or modify any implied warranty of fitness the exclusion must be by a writing and conspicuous. Language to exclude all implied warranties of fitness is sufficient if it states, for example, that “There are no warranties which extend beyond the description on the face hereof.”

(3) Notwithstanding subdivision (2)

(a) Unless the circumstances indicate otherwise, all implied warranties are excluded by expressions like “as is,” “with all faults” or other language which in common understanding calls the buyer’s attention to the exclusion of warranties and makes plain that there is no implied warranty; and

(b) When the buyer before entering into the contract has examined the goods or the sample or model as fully as he desired or has refused to examine the goods there is no implied warranty with regard to defects which an examination ought in the circumstances to have revealed to him; and

(c) An implied warranty can also be excluded or modified by course of dealing or course of performance or usage of trade.

(4) Remedies for breach of warranty can be limited in accordance with the provisions of this division on liquidation or limitation of damages and on contractual modification of remedy (Sections 2718 and 2719).
1. Watch the video of the story about the Pet Shop, which we discussed in class.) Here is the link:

2. The Pet Shop owner is planning to open a new store in Cupertino. However, he has become concerned about implied warranties under the Uniform Commercial Code (since liability is a major concern for businesses in California). The Shop owner has come to you for advice how to protect his store from implied warranty liability under the UCC.

3. Review the Warranty provisions of Article 2 of the Uniform Commercial Code (UCC Sections 2-312 through 2-316 on pages B11 – B12 of Appendix B in the textbook).

4. Draft a notice for the Pet Shop owner to display in the new store to disclaim the implied warranties of fitness and merchantability that would otherwise be incorporated into every contract of sale under the warranty provisions of the UCC.

5. Include additional exculpatory language that could help in defending claims that might be asserted by any disgruntled purchaser. Be as creative as you wish, but please limit the total notice to 200 words or less.


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