BLTS-8e Appendix F:
Sample Answers for End-of-Chapter Hypothetical Questions with Sample Answer
Chapter 18: Warranties and Product Liability
18.3 Hypothetical Question with Sample Answer
Tandy purchased a washing machine from Marshall Appliances. The sales contract included a provision explicitly disclaiming all express or implied warranties, including the implied warranty of merchantability. The disclaimer was printed in the same size and color as the rest of the contract. The machine turned out to be a “lemon” and never functioned properly. Tandy sought a refund of the purchase price, claiming that Marshall had breached the implied warranty of merchantability. Can Tandy recover her money, notwithstanding the warranty disclaimer in the contract? Explain.
Sample Answer:
Yes. To disclaim the implied warranty of fitness for a particular purpose, the disclaimer must be in writing and be conspicuous. Although the implied warranty of merchantability can be disclaimed orally, if the disclaimer is in writing it must be conspicuously written. This means that the disclaimer must—either by different color or type size or some other technique—stand out from the context in which it is printed so as to readily alert the reader of the document of the disclaimer. In this case, the disclaimer was printed in the same size and color of type as the rest of the contract and was not conspicuous. If this was the only warranty disclaimer, it is not effective and Tandy can recover.