ADMG 2010 Ch 24 ANSWER GUIDE

Pg 468/5 Implied warranties are not created by expressions of the seller like express warranties; rather, the code makes implied warranty implicit in the transaction in order to provide protection to the buyer. An implied warranty arises out of the circumstances under which the parties enter into their contract and is simply an operation of law.

Section 402A of the Restatement, Second, of Torts imposes strict liability in tort on merchant sellers for both personal injury and property damage that result from selling a product in a defective condition, which makes the product unreasonably dangerous to the user or consumer.

Pg 468 Prob 1 – Horizontal Privity. Florabelle can recover from Sadie & Exotic Clothes. Lack of horizontal privity is no defense as to Sadie because Florabelle is a statutory third party beneficiary under 2-318. Moreover, vertical privity is no defense for the manufacturer because by the great weight of authority this type of defense is no longer recognized. Florabelle will prevail under implied warranty of merchantability theory and a strict liability in tort theory.

Pg 468/Prob 3 Judgment for Doe. Roe is a merchant since he is a person who deals in goods of the kind 2-104. Unless excluded or modified, merchant seller impliedly warrants that goods which he sells are merchantable. 2-314. Doe would also prevail under strict liability in tort.

Pg 468 Prob 5. Butler may recover under a breach of the implied