Does this 'all warranties disclaimed' language actually disclaim the implied warranty of merchantability in Illinois?
Only if it is drafted and delivered right, and only if there is a warranty there to disclaim, which is a question § 2-316 does not answer. The merchantability warranty arises only where "the seller is a merchant with respect to goods of that kind", and it requires goods that pass without objection in the trade under the contract description, are of fair average quality if fungible, are "fit for the ordinary purposes for which such goods are used", run of even kind, quality and quantity within and among units, are adequately contained, packaged and labelled as the agreement may require, and conform to any promises on the container or label (810 ILCS 5/2-314(1)-(2)); other implied warranties may arise from course of dealing or usage of trade unless excluded or modified (§ 2-314(3)). The fitness warranty arises where the seller at the time of contracting has reason to know the particular purpose and that the buyer is relying on the seller's skill or judgment to select or furnish suitable goods (§ 2-315). Against that, and subject to subsection (3), to exclude or modify the implied warranty of merchantability the language must mention merchantability and, in a writing, must be conspicuous; to exclude or modify an 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' (810 ILCS 5/2-316(2)). Subsection (3) preserves the alternatives ('as is', 'with all faults' or like language, the buyer's examination or refusal to examine, and course of dealing, course of performance or usage of trade) subsection (1) construes words creating and words negating a warranty as consistent wherever reasonable and makes the negation inoperative only to the extent that construction is unreasonable, and subsection (4) sends limitation of the REMEDY for breach of warranty to §§ 2-718 and 2-719 instead. In Razor the Illinois Supreme Court refused to enforce a consequential-damages exclusion in a consumer's new-car written warranty where the buyer testified she never saw it and nothing showed she could have seen it before signing, and affirmed the circuit court's order to that effect together with the $3,500 of consequential damages; whether the same follows for a § 2-316 merchantability disclaimer, or in a commercial sale, is not established here.
The trap
Razor's timing point is the one to watch: a term the buyer could not have seen before entering the sale contract was held procedurally unconscionable, and Illinois needs only ONE branch of unconscionability, but read what carried it. Razor was a Magnuson-Moss case about a WRITTEN warranty, and the court's own measure was the federal rule that 'the FTC regulation clearly and unambiguously requires that the written warranty itself must be conveyed at the time of sale' (16 C.F.R. § 700.11(b)); it decided a consequential-damages exclusion under § 2-719(3) in a consumer sale, declined to take up an argument the parties never raised, and said it intimated 'no suggestion as to what the outcome of this or any future case might be if this or any other argument were properly raised'. So it is not established that a conspicuous § 2-316 implied-warranty disclaimer in an owner's manual falls with it; 37 Illinois opinions name § 2-316 under either spelling of the section number and none of them has been read. Note also the Illinois-specific subsection (3)(d): the implied warranties of merchantability and fitness for a particular purpose do not apply to sales of cattle, swine, sheep, horses, poultry and turkeys (or their unborn young) where the seller made reasonable efforts to comply with State and federal animal-health regulations, unless the seller knew the animal was diseased at the time of the sale, a non-uniform Illinois carve-out with no counterpart in most states.
11 authorities
- statute810 ILCS 5/2-316enactment date not established
The words that state the rule
(2) 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."
- statute810 ILCS 5/2-316enactment 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 2-202) negation or limitation is inoperative to the extent that such construction is unreasonable.
- statute810 ILCS 5/2-316enactment 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; and
- statute810 ILCS 5/2-316enactment date not established
The words that state the rule
(d) the implied warranties of merchantability and fitness for a particular purpose do not apply to the sale of cattle, swine, sheep, horses, poultry and turkeys, or the unborn young of any of the foregoing, provided the seller has made reasonable efforts to comply with State and federal regulations pertaining to animal health. This exemption does not apply if the seller had knowledge that the animal was diseased at the time of the sale.
- statute810 ILCS 5/2-316enactment 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 2-718 and 2-719).
The words that state the rule
Surely, whatever other context there might be in which a contractual provision would be found to be procedurally unconscionable, that label must apply to a situation such as the case at bar where plaintiff has testified that she never saw the clause; nor is there any basis for concluding that plaintiff could have seen the clause, before entering into the sale contract.
The words that state the rule
Accordingly, we affirm the circuit court's order to that effect, as well as the $3,500 which represents that portion of the jury verdict intended to recompense plaintiff for the consequential damages she incurred.
The words that state the rule
We decline to accept the dissent's invitation to consider section 702.3 sua sponte and decide this issue on the basis of an argument the parties have never made, not in the circuit court, the appellate court, initial briefing before this court, nor even on rehearing. We intimate no suggestion as to what the outcome of this or any future case might be if this or any other argument were properly raised before this court or the circuit court
The words that state the rule
We would have been content if the warranty was merely referred to in the sale contract, whereas the FTC regulation clearly and unambiguously requires that the written warranty itself must be conveyed at the time of sale.
- statute810 ILCS 5/2-314enactment date not established
The words that state the rule
(1) Unless excluded or modified (Section 2-316), a warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind. Under this Section the serving for value of food or drink to be consumed either on the premises or elsewhere is a sale. (2) Goods to be merchantable must be at least such as (a) pass without objection in the trade under the contract description; and (b) in the case of fungible goods, are of fair average quality within the description; and (c) are fit for the ordinary purposes for which such goods are used; and (d) run, within the variations permitted by the agreement, of even kind, quality and quantity within each unit and among all units involved; and (e) are adequately contained, packaged, and labeled as the agreement may require; and (f) conform to the promises or affirmations of fact made on the container or label if any. (3) Unless excluded or modified (Section 2-316) other implied warranties may arise from course of dealing or usage of trade.
- statute810 ILCS 5/2-315enactment date not established
The words that state the rule
Where the seller at the time of contracting has reason to know any particular purpose for which the goods are required and that the buyer is relying on the seller's skill or judgment to select or furnish suitable goods, there is unless excluded or modified under the next section an implied warranty that the goods shall be fit for such purpose.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.