Breach of warranty

Breach of warranty
See also
Exemption clause Consideration clause Hardship clause Statutory obligation Interim injunction Exculpatory Clause Statutory lien Discharge of contract Contractual liability

Breach of warranty is similar to breach of contract and is based on the idea that a warranty, or promise, is essential to the integrity and performance of the contract. Even if the user of the product was unaware of the warranty or the warranty was made after the sale, courts have held that the failure of the warranty results in failure of the contract, and the seller will be liable.

Punitive damages are generally not available in an action based on breach of contract. This is also true for products liability actions based in breach of warranty. For all practical purposes, however, attorneys will commence a lawsuit in products liability based on all three theories, thus preserving punitive damages through the negligence and strict liability theories.

Action of warranty breach

In bringing a warranty action, the buyer must prove that:

1. a warranty existed
2. the warranty has been breached
3. the breach of the warranty proximately caused the loss suffered
4. notice of the breach of warranty was given to the seller

The seller has the burden of proving defences based on the buyer's conduct. If the seller breaches his warranty, the buyer may reject or revoke acceptance of the goods. Moreover, whether the goods have been accepted or rejected, the buyer may recover a judgement, against the seller for damages. Harm for which damages are recoverable includes personal injury, damage to property, and economic loss. Economic loss most commonly involves damages for loss of bargain and consequential damages for lost profits.

Basis for the Warranty of Habitability

The basis for the implied warranty of habitability is most often found in the housing codes in the jurisdiction. Thus a substantial violation of the local housing code will breach the warranty. In some jurisdictions, the warranty of habitability derives from a common law concept of habitability. Even when the housing code is not violated the landlord may still be in breach of the warranty if the defect in the premises complained of makes the premises uninhabitable or unfit in the view of a reasonable person. Thus, an objectively reasonable standard of habitability is required by the warranty. No matter the source, the uninhabitable conditions complained of must be substantial to breach the warranty; de minimus defects will not do.

There are three elements to a successful warranty of habitability claim:

• First, the landlord must have notice of the defective condition.
• Second, the defect must be substantial, considering its violation of the applicable housing code, its effect on the tenant's health or safety, the length of time it has existed, and its seriousness.
• Third, the landlord must have been given a reasonable time to repair the defect and not done so.

References

• Allee J.A., Mayer T.V., (2005), Product Liability, Law Journal Press, New York.
• Burke D.B., Snoe J.A., (2010), Property: Examples & Explanations, Aspen Publishers, New York.
• Mann R.A., Roberts B.S., (2018), Essentials of Business Law and the Legal Environment, Cengage Learning, Brazil.
• Stone R., (2011), The Modern Law of Contract, Psychology Press, Sydney.
• Weishapple C., (2010), Introduction to Legal Nurse Consulting, Cengage Learning, Canada.

Author: Aneta Szewczyk