Sales and Leases Outline (First Edition)

Sales and Leases | 195

of the defect’s particular nature. Of course, as a practical matter, proving a specific defect at the time of sale goes a long way toward demonstrating unmerchantability. As for the definition of a defect, many courts, at least in the products-liability context, adopt the rules in tort law. [ See 2 Hawkland UCC Series § 2-314:6, Westlaw (database updated June 2021).] 7. Knowledge of Defect at the Time of Sale as a Limitation on Recovery Some courts hold that a plaintiff cannot recover for breach of the implied warranty of merchantability if she knew, at the time of sale, that the goods were unmerchantable—or, put another way, knew of the defect or problem that made the goods unmerchantable. Additionally, the official comments to § 2-314 express the idea that the buyer may have trouble proving causation if the buyer’s examination of the goods should have revealed the defect. A prominent treatise, however, maintains that the plaintiff’s knowledge is better addressed under the rules on disclaimer of warranties under § 2-316, discussed below. [ See U.C.C. § 2-314, cmt. 13; 2 Hawkland UCC Series § 2-314:5, Westlaw (database updated June 2021); Excluding and Modifying Warranties, infra .] 8. Plaintiff’s Conduct as a Limitation on Recovery Ordinarily, the plaintiff’s conduct, such as contributory or comparative negligence, will not limit her recovery for breach of the implied warranty of merchantability. After all, the warranty claim rests on contract law, not the seller’s negligence or other misconduct. But sometimes, the plaintiff’s conduct can lead to a finding that whatever made the goods unmerchantable was not the actual or proximate cause of the harm, which defeats recovery. Examples include the plaintiff’s:

 misuse of the goods, at least if unforeseeable;  failure to follow suitably conspicuous and clear instructions;  substantially altering the goods; or  continued use of the goods, even after she knows that the goods are harmful.

[2 Hawkland UCC Series § 2-314:5, Westlaw (database updated June 2021).]

9. Buyer’s Specifications as a Limitation on Recovery The buyer may be unable to recover for breach of the implied warranty of merchantability if (1) she provides the seller specifications for the goods, (2) the seller manufactures the goods according to those specifications, and (3) the specifications lack any design defect so obvious that following the specifications would be unreasonable. [2 Hawkland UCC Series § 2-314:5, Westlaw (database updated June 2021).]

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