Raising the bar in breach of implied warranty cases

A recent decision suggests that the bar for finding a product maker or seller liable for breach of the implied warranty or merchantability may be getting higher – or at least that its true height may be becoming more clear.

For product makers and sellers, breach of implied warranty claims can be particularly difficult to defend. The “not reasonably fit for intended use” liability standard normally applied to claims of this type is rather amorphous. It can be given widely varied interpretations depending on who is doing the interpreting and how sympathetically the person making the claim is viewed. As a result, even relatively minor product problems are too often found sufficient to support liability, particularly in cases involving cars, RVs, and other high-ticket consumer goods.

But a favorable trend may be developing.

In affirming dismissal of a class action involving breach of express and implied warranty claims brought against Toyota, the 9th Circuit Court of Appeals held that to prove an implied warranty of merchantability claim, a car buyer must prove that the defect compromises vehicle safety, renders the vehicle inoperable, or drastically undermines ordinary vehicle operation. Troup v. Toyota, No. 11-56637 (11/20/13) (unreported). The alleged defect in the case – the use of resin to construct the fuel tank – “did not implicate the [car’s] operability,” the court said, but “merely required [vehicle owners] to refuel more frequently.” Id.

The court appears to have drawn a line between claims involving genuine product function and usability problems and those involving convenience issues.

And even a claim of impaired function or operability may not be enough to sustain liability where the manufacturer or seller can show that defect can be “cured,” that is, the problem can be fixed. See McDonald v. Mazda Motors of Am., 269 Ga.App. 62, 65 (2004). “If the defect can be cured, then the purchaser has what he bargained for, i.e., a product which would pass in the trade” and no warranty breach has occurred. Id. (internal punctuation omitted).

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Filed under Court Decisions, Warranty

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