How do we disclaim implied warranties in an Alabama sale of goods?
By the statute's form rules, and not as to personal injury from consumer goods. Subject to subsection (3), to exclude or modify the implied warranty of merchantability or any part of it the language must mention merchantability and, in case of a writing, must be conspicuous; to exclude or modify any implied warranty of fitness the exclusion must be by a writing and conspicuous, and language excluding all implied warranties of fitness is sufficient if it states, for example, that "There are no warranties which extend beyond the description on the face hereof." (Ala. Code § 7-2-316(2)). Conspicuous, with reference to a term, means so written, displayed, or presented that, based on the totality of the circumstances, a reasonable person against which it is to operate ought to have noticed it, and whether a term is conspicuous is a decision for the court as a matter of law (§ 7-1-201(b)(10)). Notwithstanding subsection (2), unless the circumstances indicate otherwise all implied warranties are excluded by expressions like "as is" or "with all faults" or other language which in common understanding calls the buyer's attention to the exclusion and makes plain there is no implied warranty; a buyer who has examined the goods, sample or model as fully as desired or has refused to examine takes no implied warranty as to defects an examination ought to have revealed; and an implied warranty can also be excluded or modified by course of dealing, course of performance or usage of trade (§ 7-2-316(3)). Alabama adds a subsection the uniform text does not have: nothing in subsection (2) or (3)(a) or in § 7-2-317 shall be construed so as to limit or exclude the seller's liability for damages for injury to the person in the case of consumer goods (§ 7-2-316(5)), consumer goods being, in Article 9A's own definitions, goods used or bought for use primarily for personal, family or household purposes (§ 7-9A-102(a)(23)), a definition the Supreme Court of Alabama brought across into § 7-2-316(5) in Bagley v. Mazda Motor Corp. Alabama courts have applied all of this. In Fincher v. Robinson Bros. Lincoln-Mercury, Inc. a dealer's disclaimer printed in contrasting red type, in prominent locations and apart from other language in both the invoice and the signed order form, satisfied the conspicuousness requirement, and summary judgment for the dealer on the breach-of-warranty claim was accordingly proper; the judgment was affirmed in full. The court added that even without the red print the disclaimers would still have satisfied § 7-2-316(2). In Auburn Ford, Lincoln Mercury, Inc. v. Norred the Court held that under § 7-2-316(3)(a) an "as is" disclaimer does not have to be conspicuous or even mention the word "merchantability", though on those facts the disclaimer was still defeated by federal law, because the dealer had sold an extended service contract. And in Bagley v. Mazda Motor Corp. an "As Is-No Warranty" window sticker, "As Is" on the face of a Buyer's Guide the buyer signed on the reverse, and a signed "As Is Bill of Sale" meant the dealer "satisfied the statutory language of § 7-2-316 (3)(a) by notifying Deborah, in two different documents" that the car was sold "as is", yet because the buyers sued on personal injuries from the purchase of a car, "which, under the facts of this case, is a consumer good", § 7-2-316(5) was in play, and the Court held the trial court erred in granting summary judgment on the implied-warranty claim as to the personal-injury claims and reversed that much of the judgment while affirming the rest.
The trap
Subsection (5) is the Alabama-specific point and it is a hard floor on DISCLAIMER, but it is not a source of warranty, and that distinction decided the Bagley litigation. On the second appeal the same buyers lost outright. Alabama's general rule, which the court traced through Osborn v. Custom Truck Sales & Service back to Kilborn v. Henderson (1953), is that there is "no implied warranty of the quality or condition of a used automobile and the rule of caveat emptor applies": a rule nobody had raised the first time round, so the first opinion never ruled on it. With nothing to show that any implied warranty existed, the argument that the "as is" language had not excluded one had no merit, there was nothing for (5) to protect, and summary judgment for the dealer was affirmed. The second trap is structural: (2) is expressly "Subject to subsection (3)", so the mention-merchantability and conspicuousness requirements are not the only route, and an "as is" sale can exclude implied warranties without them unless the circumstances indicate otherwise; Alabama has said in terms that an "as is" disclaimer "does not have to be conspicuous or even mention the word 'merchantability.'" Where conspicuousness IS required, it is decided by the court as a matter of law "based on the totality of the circumstances", and what satisfied it in Fincher was a disclaimer in red type contrasting with the rest of the invoice and the signed order form, in prominent locations and "apart from other language", but the court added in a footnote that "even if the disclaimers had not been printed in red they would still satisfy § 7-2-316 (2)", so the colour was sufficient and not necessary. Contrasting type and a prominent position are the test; colour is one way of contrasting. Note the vintage: the case applying that standard quotes the pre-revision definition, under which language in the body of a form was conspicuous if "in larger or other contrasting type or color"; the definition now published is the totality-of-the-circumstances test, and nothing stated here says an Alabama court has applied the revised wording. The sharpest trap is not in this section at all: Auburn Ford, Lincoln Mercury, Inc. v. Norred sets out 15 U.S.C. § 2308 as it stood in 1982 and reads it to mean that a supplier may not disclaim or modify any implied warranty to a consumer, "except as provided in subsection (b) of this section", if the supplier gives a written warranty or, "at the time of sale, or within 90 days thereafter", enters into a service contract with the consumer. The dealer there had sold the buyer a $395 extended service contract the same day it sold her the car, so a disclaimer that "would ordinarily be sufficient" failed. That is a federal statute recited by an Alabama court in 1989, and subsection (b)'s own exception is not set out here, so check the current federal text before relying on it. Remedies for breach of warranty are limited under §§ 7-2-718 and 7-2-719, not under this section (§ 7-2-316(4)).
26 authorities
- statuteAla. Code § 7-2-316enactment date not established
The words that state the rule
Subject to subsection (3), to exclude or modify the implied warranty of merchantability or any part of it the language must mention merchantability and in case of a writing must be conspicuous, and to exclude or modify any implied warranty of fitness the exclusion must be by a writing and conspicuous. Language to exclude all implied warranties of fitness is sufficient if it states, for example, that “There are no warranties which extend beyond the description on the face hereof.”
- statuteAla. Code § 7-2-316enactment date not established
The words that state the rule
(1) Words or conduct relevant to the creation of an express warranty and words or conduct tending to negate or limit warranty shall be construed wherever reasonable as consistent with each other; but subject to the provisions of this article on parol or extrinsic evidence (Section 7-2-202) negation or limitation is inoperative to the extent that such construction is unreasonable.
- statuteAla. Code § 7-2-316enactment date not established
The words that state the rule
(3) Notwithstanding subsection (2): (a) Unless the circumstances indicate otherwise, all implied warranties are excluded by expressions like “as is,” “with all faults” or other language which in common understanding calls the buyer’s attention to the exclusion of warranties and makes plain that there is no implied warranty; and (b) When the buyer before entering into the contract has examined the goods or the sample or model as fully as he desired or has refused to examine the goods there is no implied warranty with regard to defects which an examination ought in the circumstances to have revealed to him; and (c) An implied warranty can also be excluded or modified by course of dealing or course of performance or usage of trade.
- statuteAla. Code § 7-2-316enactment date not established
The words that state the rule
Nothing in subsection (2) or subsection (3) (a) or in Section 7-2-317 shall be construed so as to limit or exclude the seller’s liability for damages for injury to the person in the case of consumer goods.
- statuteAla. Code § 7-2-316enactment date not established
The words that state the rule
(4) Remedies for breach of warranty can be limited in accordance with the provisions of this article on liquidation or limitation of damages and on contractual modification of remedy (Sections 7-2-718 and 7-2-719).
- statuteAla. Code § 7-1-201enactment date not established
The words that state the rule
(10) “Conspicuous,” with reference to a term, means so written, displayed, or presented that, based on the totality of the circumstances, a reasonable person against which it is to operate ought to have noticed it. Whether a term is “conspicuous” or not is a decision for the court as a matter of law.
- statuteAla. Code § 7-1-201enactment date not established
The words that state the rule
(b) Subject to definitions contained in other articles of the Uniform Commercial Code that apply to particular articles or parts thereof:
- statuteAla. Code § 7-9A-102enactment date not established
The words that state the rule
(23) “Consumer goods” means goods that are used or bought for use primarily for personal, family, or household purposes.
- statuteAla. Code § 7-2-317enactment date not established
The words that state the rule
Warranties whether express or implied shall be construed as consistent with each other and as cumulative, but if such construction is unreasonable the intention of the parties shall determine which warranty is dominant. In ascertaining that intention the following rules apply: (a) Exact or technical specifications displace an inconsistent sample or model or general language of description. (b) A sample from an existing bulk displaces inconsistent general language of description. (c) Express warranties displace inconsistent implied warranties other than an implied warranty of fitness for a particular purpose.
- case583 So.2d 256Fincher v. Robinson Bros. Lincoln-Mercury, Inc.Ala.decided 1991read it at the source ↗
The words that state the rule
Fincher maintains that the language used by Robinson in the invoice and in the order form was not "conspicuous" and, therefore, was insufficient as a matter of law to disclaim any implied warranties. The dispositive issue, therefore, is whether there was a disclaimer of warranties under § 7-2-316 (2).
- case583 So.2d 256Fincher v. Robinson Bros. Lincoln-Mercury, Inc.Ala.decided 1991read it at the source ↗
The words that state the rule
printed in a type and color (red) that contrasted with the type and color used in the remainder of the documents: "The Seller, ROBINSON BROS. L-M, Inc., hereby expressly disclaims all warranties, either express or implied, including any implied warranty of merchantability or fitness for a particular purpose and ROBINSON BROS. L-M, Inc., neither assumes nor authorizes any other person to assume for it any liability in connection with the sale of the vehicle." This language also appeared in these two documents in prominent locations and apart from other language.
- case583 So.2d 256Fincher v. Robinson Bros. Lincoln-Mercury, Inc.Ala.decided 1991read it at the source ↗
The words that state the rule
"Conspicuous" is defined in § 7-1-201 (10) as follows: "A term or clause is conspicuous when it is so written that a reasonable person against whom it is to operate ought to have noticed it. A printed heading in capitals (as: NONNEGOTIABLE BILL OF LADING) is conspicuous. Language in the body of a form is 'conspicuous' if it is in larger or other contrasting type or color. But in a telegram any stated term is 'conspicuous.' Whether a term or clause is 'conspicuous' or not is for decision by the court."
- case583 So.2d 256Fincher v. Robinson Bros. Lincoln-Mercury, Inc.Ala.decided 1991read it at the source ↗
The words that state the rule
The undisputed facts in this case show that Robinson disclaimed any implied warranties that could have arisen from its sale of the automobile to Fincher. Both the copy of the invoice received by Fincher and the order form signed by him contained disclaimers that satisfy the requirement of conspicuousness set out in § 7-1-201 (10). 2 Accordingly, the summary judgment for *Page 259 Robinson was proper as to the breach of warranty claim.
- case583 So.2d 256Fincher v. Robinson Bros. Lincoln-Mercury, Inc.Ala.decided 1991read it at the source ↗
The words that state the rule
2 Robinson supplemented the record on appeal to include the original invoice and order form. Those documents clearly show the disclaimers to be in red print. Fincher asserts that the trial court never saw the original documents, but, instead, based its judgment on black and white photocopies of those documents. Fincher argues that the red print shown in the original documents cannot serve as a basis for upholding the judgment. It is difficult for us to tell from the record whether the trial court considered the red print in entering the judgment for Robinson. In any event, we note that even if the disclaimers had not been printed in red they would still satisfy § 7-2-316 (2).
- case583 So.2d 256Fincher v. Robinson Bros. Lincoln-Mercury, Inc.Ala.decided 1991read it at the source ↗
The words that state the rule
For the foregoing reasons, the judgment is affirmed. AFFIRMED. HORNSBY, C.J., and MADDOX, ALMON, STEAGALL, KENNEDY and INGRAM, JJ., concur.
- case541 So.2d 1077Auburn Ford, Lincoln Mercury, Inc. v. NorredAla.decided 1989read it at the source ↗
The words that state the rule
Under Ala. Code 1975, § 7-2-316 (3)(a), such an "as is" disclaimer does not have to be conspicuous or even mention the word "merchantability." Gaylord v. Lawler Mobile Homes, Inc. , 477 So.2d 382 (Ala. 1985). This disclaimer would ordinarily be sufficient to preclude Lisa's breach of warranty claim. However, she also purchased an "Extended Service Contract" for $395 with Auburn Ford the same day she purchased the car. That contract was to run from June 30, 1986, to March 30, 1987.
- case541 So.2d 1077Auburn Ford, Lincoln Mercury, Inc. v. NorredAla.decided 1989read it at the source ↗
The words that state the rule
We find the following at 15 U.S.C. § 2308 (1982): "§ 2308. Implied warranties "Restrictions on disclaimers or modifications "(a) No supplier may disclaim or modify (except as provided in subsection (b) of this section) any implied warranty to a consumer with respect to such consumer product if (1) such supplier makes any written warranty to the consumer with respect to such consumer product, or (2) at the time of sale, or within 90 days thereafter, such supplier enters into a service contract with the consumer which applies to such consumer product. " (Emphasis added.)
- case541 So.2d 1077Auburn Ford, Lincoln Mercury, Inc. v. NorredAla.decided 1989read it at the source ↗
The words that state the rule
Thus, in light of Lisa's service contract, Auburn Ford's disclaimer is ineffective to now exclude any implied warranties.
- case541 So.2d 1077Auburn Ford, Lincoln Mercury, Inc. v. NorredAla.decided 1989read it at the source ↗
The words that state the rule
Accordingly, the judgment is affirmed in all respects upon the condition that Lisa accept a remittitur in the amount of $3,018.83. AFFIRMED CONDITIONALLY.
The words that state the rule
As previously noted, according to the affidavit of Parsons, an "As Is-No Warranty" sticker was posted on the window of the 1980 Mazda and the words "As Is" were written below the sticker on the face of the Buyer's Guide, which Deborah *Page 315 signed on its reverse side. Deborah also signed an "As Is Bill of Sale," which specifically detailed all of the warranties being disclaimed, including warranties of merchantability and fitness for a particular purpose. Therefore, Creekside satisfied the statutory language of § 7-2-316 (3)(a) by notifying Deborah, in two different documents, that the car she was purchasing was being sold "as is."
The words that state the rule
However, the Bagleys cite Ala. Code 1975, § 7-2-316 (5), in support of their breach-of-warranty argument. Section 7-2-316 (5) states, in pertinent part, that "[n]othing in subsection (2) 13 or subsection (3)(a) or in Section 7-2-317 14 shall be construed so as to limit or exclude the seller's liability for damages for injury to the person in the case of consumer goods." "Consumer goods" are defined as "goods that are used or bought for use primarily for personal, family, or household purposes." Ala. Code 1975, § 7-9A-102 (a)(23). Here the Bagleys are suing based on personal injuries they suffered as a result of the purchase of a car, which, under the facts of this case, is a consumer good.
The words that state the rule
The record indicates that on the day Deborah purchased the 1980 Mazda, a wheel came off while the car was being driven. This fact raises the issue whether the car was fit for its ordinary purpose and therefore merchantable. Also, Deborah testified that a salesperson at Creekside, knowing the particular purpose for which Deborah was purchasing the car — roadway transportation — recommended the 1980 Mazda to her and dissuaded her from her first choice, which raises a fact question as to whether an implied warranty of fitness for a particular purpose existed. Thus, the evidence is sufficient to raise a genuine issue of material fact as to the Bagleys' claim as to damages for breach of implied warranties of merchantability and fitness for a particular purpose. We conclude, therefore, that the trial court erred in granting Creekside's motion for a summary judgment on the Bagley's breach-of-warranty claim as to the personal-injury claims arising out of the breach of the implied warranties of merchantability and fitness for a particular purpose; to that extent the summary judgment is due to be reversed.
The words that state the rule
In summary, the trial court's summary judgments for Creekside and Mazda on the AEMLD claim are affirmed. To the extent the Bagleys' appeal relates to the partial summary judgment for Creekside on the fraud claim, the appeal is dismissed. The trial court's summary judgment for Creekside on the breach-of-express-warranty claim is affirmed, but is reversed as to the breach-of-implied warranty claim(s). The case is remanded for the entry of orders and for further proceedings consistent with this opinion. AFFIRMED IN PART; REVERSED IN PART; APPEAL DISMISSED IN PART; AND CASE REMANDED.
- case913 So.2d 441Bagley ex rel. Bagley v. Creekside Motors, Inc.Ala.decided 2005read it at the source ↗
The words that state the rule
The Bagleys' argument that the "law of th[is] case" is that implied warranties existed in the sale of the Mazda automobile they purchased is apparently prompted by the recognition that, as a general rule of law in Alabama, there are no implied warranties on the sale of a used automobile. In Osborn v. Custom Truck Sales Service , 562 So.2d 243 , 247 (Ala. 1990), we stated: "[T]his Court stated in Trax, Inc. v. Tidmore , 331 So.2d 275 , 277 (Ala. 1976): "`The law in Alabama regarding sales of used or second-hand vehicles was stated in Kilborn v. Henderson , 37 Ala.App. 173 , 65 So.2d 533 (1953): "The general rule is that there is no implied warranty of the quality or condition of a used automobile and the rule of caveat emptor applies.'" "See also Curry Motor Co. v. Hasty , 505 So.2d 347 , 350 (Ala. 1987)." See also Roland v. Cooper , 768 So.2d 400 , 406 (Ala.Civ.App. 2000).
- case913 So.2d 441Bagley ex rel. Bagley v. Creekside Motors, Inc.Ala.decided 2005read it at the source ↗
The words that state the rule
Accordingly, we next consider whether the trial court erred in entering a summary judgment for Creekside. In that respect, the Bagleys have presented nothing to show that Osborn and the other Alabama cases holding that no implied warranties attach to the sale of used automobiles are inapplicable to this case, and our research has discovered no basis for so holding. It follows that the Bagleys have failed to establish the existence of any implied warranties in this case. In the absence of any showing that implied warranties existed, the Bagleys' argument that such warranties were not excluded by the "as is" language in the sales contract has no merit, and the trial court correctly entered the summary judgment for Creekside on their breach-of-implied-warranty claim. That summary judgment is therefore due to be affirmed. AFFIRMED.
- case913 So.2d 441Bagley ex rel. Bagley v. Creekside Motors, Inc.Ala.decided 2005read it at the source ↗
The words that state the rule
None of the parties raised any issue in the first appeal in this case as to whether implied warranties attached to the sale of a used automobile. In their briefs in the first appeal, the parties never mentioned the law set out in Osborn and the cases associated with it, and this Court never ruled upon applicability of that law to the facts in this case.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.