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Warranties guaranteeing future product performance can add years to the liability period

A subtle change in the wording of a product warranty can add years to a customer’s right to sue the vendor for breach of warranty under the Uniform Commercial Code.

Product failure as the breach: Suppose that the vendor warranted that its product would be free from defects for X years after the delivery date. In many U.S. jurisdictions, that warranty would be treated as an explicit guarantee of the product’s future performance. If the product were to fail, the failure itself would be deemed a breach of the warranty; the customer could sue for the breach at any time up to (usually) four years after the failure.

Product delivery as the breach: On the other hand, suppose that the vendor had promised only that it would repair or replace the product if it failed during the first X years after delivery. That language does not explicitly guarantee future performance. If the product were to fail, the courts in many U.S. jurisdictions — but not all — would deem the breach to have occurred, not on the date of the failure, but on the date the product was delivered, pursuant to UCC § 2-275. In a case governed by the law of one of those jurisdictions, the customer would be forced to bring suit for breach within (usually) four years after delivery, not after the product failure. See generally the appellate court’s review of case law in Trans-Spec Truck Service, Inc. v. Caterpillar, Inc., 524 F.3d 315, part II.B (1st Cir. 2008) (affirming summary judgment dismissing breach of warranty claim under Massachusetts law).

(NOTES: [1] In such cases, the language promising to take certain actions if the product fails is deemed a limitation of remedies instead of a warranty. [2[ The analysis summarized in the previous paragraph might be different if the promissory language were deemed a separate ‘service contract,” and if the customer sued for breach of the service contract and not for breach of the product warranty. See id.)

(This is the text of an update to the page, Warranties and representations: A brief overview.)

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