Thread: merchantability - implied or otherwise

WC Jerry,

I was talking with a client today regarding the builder/developer responding with little work being done other than superficial stuff and that the builder/developer stated that 'your inspectors were full of crap and do not know what they were talking about, that everything the inspectors wrote up was allowed' (something to that affect).

I then explained to my client that, yes, that is to be expected and most builders reply with something that like.

I then explained that one of the first things we need to do is to get the builder/developer to state that what they did was right, not just to imply it was right because it was done and signed off.

That once the builder/developer states that it is correct, they put themselves into the position of having to defend that statement to the death, and death is what they usually get because we can document code and manufacturers' installation instructions which supports what we stated.

After doing the above I started considering what I had actually said, without saying ... that the builder selling the house implies merchantability of the house, while the builder responding to an inspection report who insists there is nothing wrong is no longer "implying" merchantability but is 'stating merchantability'. When the builder/developer is proven wrong, that defacto proves the house was not merchantable. Right?

Originally Posted by Jerry Peck

WC Jerry,

I was talking with a client today regarding the builder/developer responding with little work being done other than superficial stuff and that the builder/developer stated that 'your inspectors were full of crap and do not know what they were talking about, that everything the inspectors wrote up was allowed' (something to that affect).

I then explained to my client that, yes, that is to be expected and most builders reply with something that like.

I then explained that one of the first things we need to do is to get the builder/developer to state that what they did was right, not just to imply it was right because it was done and signed off.

That once the builder/developer states that it is correct, they put themselves into the position of having to defend that statement to the death, and death is what they usually get because we can document code and manufacturers' installation instructions which supports what we stated.

After doing the above I started considering what I had actually said, without saying ... that the builder selling the house implies merchantability of the house, while the builder responding to an inspection report who insists there is nothing wrong is no longer "implying" merchantability but is 'stating merchantability'. When the builder/developer is proven wrong, that defacto proves the house was not merchantable. Right?

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As this was posted instead of PM.
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Implied Warranty

The reference to the UPS/Toshiba setup reminds me of how, back in the day when I used nailers, there was a guy who had a shop set up in a cage at the hub of one of the major overnight delivery services and offered overnight repair of major brands.

Good point EC Jerry and goes with another old mantra of mine. When the builder, or any other person, claims you, the inspector, is wrong, crazy, dumb, whatever, and that their installation, repair, replacement is just fine, meets code, and was passed by the city so he knows its right and I'm wrong I always countered with, "did they put it in writing, date and sign it like I did?"

Funny how folks get real quiet when they're asked to put their argument/claim/opinion on paper and sign it. We do it every day so why should they hesitate? And if they do put it to paper, it still doesn't matter as now the client has two signed statements. Let the games begin!

Well Jerry, Face it, you are full of crap.

Hmmm, come to think of it I'm full of crap. No, wait, we are all full of crap.

We all just let it out differently.

Originally Posted by Billy Stephens

As this was posted instead of PM.

Billy,



Yeppers, I figgered some of this exchange might be interesting and informative to others too.

Originally Posted by Jerry McCarthy

did they put it in writing, date and sign it like I did?"

Funny how folks get real quiet when they're asked to put their argument/claim/opinion on paper and sign it. We do it every day so why should they hesitate?

That's the first step, getting them to commit it to paper 'There is NOTHING wrong with this house.'

BINGO! Got them right there.

And if they do put it to paper, it still doesn't matter as now the client has two signed statements. Let the games begin!

The games are beginning on this one.

I love these kinds of games.

Originally Posted by Jerry Peck

Billy,

I love these kinds of games.

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....

Billy,

From Wikipedia: (red text is my highlighting)

Merchantability

An implied warranty of merchantability is a warranty implied by law that goods are reasonably fit for the general purpose for which they are sold.

International sales law

In international sales law, merchantability forms part of the ordinary purpose of the goods. According to Article 35(2)(a) of the United Nations Convention on Contracts for the International Sale of Goods, a seller must provide goods fit for their ordinary purpose.

Australia

In Australia, the obligation is in section 66(2) of the Trade Practices Act 1974.

United States

In the United States, the obligation is in Article 2 of the Uniform Commercial Code (UCC). This warranty will apply to a merchant (that is, a person who makes an occupation of selling things) who regularly deals in the type of merchandise sold.
Under US law, goods are 'merchantable' if they meet the following conditions:

1. The goods must conform to the standards of the trade as applicable to the contract for sale.
2. They must fit for the purposes such goods are ordinarily used, even if the buyer ordered them for use otherwise.
3. They must be uniform as to quality and quantity, within tolerances of the contract for sale.
4. They must be packed and labeled per the contract for sale.
5. They must meet the specifications on the package labels, even if not so specified by the contract for sale.

If the merchandise is sold with an express "guarantee", the terms of the implied warranty of merchantability will fill the gaps left by that guarantee. If the terms of the express guarantee are not specified, they will be considered to be the terms of the implied warranty of merchantability. The UCC allows sellers to disclaim the implied warranty of merchantability, provided the disclaimer is made conspicuously and the disclaimer explicitly uses the term "merchantability" in the disclaimer.[1] Some states, however, have implemented the UCC such that this can not be disclaimed.

What I find a buyer usually overlooks is that, even if the contractor does not fix all items and states that what he has done has been approved and blahblahblah. The client "typically" has a one year warranty, during which time they can research, inspect, 2nd, 3rd opinion until the warranty is up.
If the contractor has not dotted all his i's, he is liable, within that 1st year, correct?

Originally Posted by wayne soper

If the contractor has not dotted all his i's, he is liable, within that 1st year, correct?

Even if the contractor has dotted all his i's and t's he is liable.

For how long and for what is up to the contract and state law. State law may specify times, but is almost always very vague on 'what is covered' other than major structural items.

In Florida, the contractor is basically behind it for 15 years, for major things such as structural, however, being as that is not specified (it's vague as I said), then it depends on how good the better attorney and their experts are, and the judge. I've seen an incompetent judge almost sink an open and shut case ... almost ... some reality hit the judge and they avoided the ultimate mistake (but did affect the outcome in a negative way). As I understood it, that judge was a new judge and was not experienced in trials. One would think that, after years of being a lawyer, they would understand trials, but apparently that is not always so.

Two California appellate courts have handed down rulings clarifying the application of statutes of limitations when construction defects are alleged and when the limitations can be tolled on the basis of equitable estoppel. The 10-year statute of repose is not subject to equitable tolling while promises or attempts to repair are pending. Suits to recover for construction defects are subject to limitation periods of 3 or 4 years depending on whether the theory is breach of warranty (Code of Civil Procedure §337, 4 years for an action founded upon an instrument in writing) or tortious injury to property (§338, 3 years for injury to real property). These periods begin to run only when the defect would be discoverable by reasonable inspection.

On the other hand, §337.15 imposes an absolute requirement that suit be brought within 10 years after substantial completion regardless of the date of discovery of the defect. The plain language of §337.15 suggests that the 10-year period is not subject to extension.

The purpose of §337.15 is to protect contractors and other professionals and tradespeople in the construction industry from perpetual exposure to liability for their work. The Legislature meant the generous 10-year period to be firm and final.

The 10-year limit could, however, be subject to equitable estoppel, which would apply if the intentional conduct of a defendant induced the plaintiff to forebear suit. Elements of equitable estoppel are: 1) potential defendant represents that all damage has been or will be repaired, thus making it unnecessary to sue; 2) plaintiff reasonably relies on the representation and refrains from bringing a timely action; 3) representation is false; and 4) plaintiff proceeds diligently once the truth is discovered.

As far as judges go they are not the cream of the legal field in that a good practicing attorney in California with a decent work load can clear 350 to 500 K a year, where your average judge makes less than a third of that amount. True, there are perks for being a judge, but income wise it’s a real step down so are the best and brightest of our legal profession standing in line to become judges?

In Florida, you have 4 years after it was discovered or should have been discovered, with the end-all being 15 years.

If discovered in the 14th year, action must be taken before the 15 year drop-dead time.

There are other things apply too, and, yes, certain actions toll the time.

Nonetheless, the law is vague on what is, and is not, covered. That's where the attorneys come in.

I agree that the best and brightest attorneys are not standing in line for judgeships, however, some highly respected attorneys are willing to put their law practice on hold and become judges, usually not forever, just for awhile, then the go back to their law practice (they either own them and have 'partners' or are one of the partners), with the judge status improving their status and money making.

EC Jerry said: "some highly respected attorneys are willing to put their law practice on hold and become judges, usually not forever, just for awhile, then the go back to their law practice (they either own them and have 'partners' or are one of the partners), with the judge status improving their status and money making."
and I say thank God for that. However, some end up on our Supreme Court, but lets not go there.

In New Jersey, a home 'builder' has to provide a 10 year warranty with the house. Now, we all know unless the house is falling down, these warranties are pretty much useless.

Several years ago a lawsuit took place that changed how a consumer is protected. This suit change how the code division now handles complaints of bad 'craftsmanship'.

The construction department can pull a C.O. up to ten years after it was issued.

Darren,

Interesting.

I would caution homeowners on applying the "unsafe structure' part of it as, by that very nature, they have agreed and deemed that 'the structure is unsafe', in which case they would need to vacate the house and take up residence elsewhere until the corrections were made.

On another note; California contractor’s warranties are not worth the paper they’re written on, and most if not all home warranties that RE agents push are even more worthless. Years of performing construction defect work has proven that fact over & over ad nauseam. CA Civil Code 910 and for fun read this web site:
Home Warranties Not Always What They Seem

Allow me to add to my above post how many times have you heard the listing agent say to the buyer, "why are you spending the money for an inspection when the builder is supplying a free warranty, or the seller is providing one?"