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What are each of the warranty protections that apply to leases under Article 2A of the...

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armyof32000 | Salutatorian

Posted October 4, 2013 at 6:24 AM via web

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What are each of the warranty protections that apply to leases under Article 2A of the Uniform Commercial Code (UCC) and explain them with an example, please?

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docholl1 | College Teacher | (Level 2) Senior Educator

Posted October 29, 2013 at 5:42 PM (Answer #1)

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Under Article 2A of the UCC, sections 2A-210 through 2A-212 set forth the lessor and lessee's obligations with respect to 1) Express Warranties; 2) Warranties Against Interference and Against Infringement; Lessee's Obligation Against Infringement; and 3) Implied Warranty of Merchantability.

Section 210 establishes express warranties, as follows: a) if the lessor states a fact about the goods in question or makes a promise about the goods, then those statements are a guaranty on the lessor's about the goods; b) if a description of the goods is part of the lease, then the goods must conform to the description; c) if the lessor provides a only an example of the goods (to represent the actual goods subject to the lease), the actual goods must conform to the example.  If the lessor makes statements as described here, the lessor creates the express warranty even if he or she does not use the words "warrant" or "guarantee."

Section 211 establishes that 1) if there is a lease, then for the lease term a warranty exists that no person other than the lessee has enjoyment of the leasehold interest; 2) if the lessor is a merchant who regularly deals in the goods being leased, the lessor warrants that the leased goods are delivered free of any claim of a third party; and 3) if the lessee provides specifications for the goods to the lessor or supplier, the lessee cannot hold the lessor or supplier responsible if the leased goods do not follow lessee's specifications.

Section 212 requires that 1) (with the exception of a finance lease) if the lessor is a merchant in the goods being leased to lessee, then the lessor warrants that the goods will be merchantable--that is, saleable or tradeable; 2) Merchantable goods must "pass without objection in the trade;" must be of "fair average quality;" are fit for the purpose for which they are designed; are of equal quality with each other (i. e., they are all the same); they must be labeled and package according to the requirements of the lease; and must conform to the facts stated on package labels.

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