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    Warranties: Liability in Practice

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    Liability in Practice
    Scenario 1: SuperKool is a company that makes air conditioners and sells them out of its SuperKool stores. SuperKool also sells used air conditioners of its own brand, which the company identifies as selling "as is" with no express warranty. For the new air conditioners that SuperKool sells,
    1) What types of statements, duration, and disclaimers would be typical to put in its express warranties and explain why.
    2) What other types of warranties might apply under statute or common law?
    3) For the used air conditioners, does the "as is" label absolve SuperKool of all liability if something goes wrong with the air conditioner after purchase?

    Scenario 2: What kind of liability does SuperKool have in the following situation?
    An elderly customer buys a new air conditioner and installs it himself, but does not notice that after a month the air conditioner has stopped blowing cool air. Two months after installing the air conditioner, there is a heat wave and the customer dies of a heat stroke in the room in which the air conditioner was installed.

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    Solution Preview

    SuperKool, as with any other business that sells products, has to abide by warranty requirements established by federal legislation and enforced by the Uniform Commercial Code (UCC). The Magnuson- Moss Warranty Act created an express limited warranty for consumer products that added limitations and conditions to the user's warranty, but still allowed the consumer the right to sue for breach of implied warranty that is included in the UCC. This legal action that is possible on the part of the consumer is the second aspect of the warranty guidelines required to be followed by an organization.

    These warranty requirements create a situation in which organizations can limit the liability to repairs during the time frame of the limited warranty, but the ...

    Solution Summary

    Liabilities in practice warranties are examined. The other types of warranties which might apply under statue or common law are determined.