How do you disclaim implied warranties in an Oregon sale of goods?
Under ORS 72.3160(2), subject to subsection (3), to exclude or modify the implied warranty of merchantability the language must mention merchantability and, in a writing, be conspicuous, and to exclude or modify any implied warranty of fitness the exclusion must be by a conspicuous writing. A term is conspicuous, under ORS 71.2010(2)(j), when it is so written, displayed or presented that, 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; the Oregon Supreme Court has recorded that Oregon courts previously held warranty disclaimers insufficiently conspicuous when placed under a heading titled 'warranty' (Certain Underwriters v. TNA NA Manufacturing). Under 72.3160(3)(a), unless the circumstances indicate otherwise, all implied warranties are excluded by expressions like 'as is' or 'with all faults' or other language that in common understanding calls the buyer's attention to the exclusion and makes plain there is no implied warranty. For consumer goods under ORS 72.8010 to 72.8200 (new goods for personal, family or household use, not soft goods or consumables), effective disclaimer of the implied warranty of merchantability or fitness on an as-is or with-all-faults sale requires a conspicuous writing attached to the good that clearly informs the buyer before sale, in simple and concise language, that the good is sold as is or with all faults, that the entire risk as to quality and performance is with the buyer, and that if the good proves defective the buyer and not the manufacturer, distributor or retailer assumes the entire cost of all necessary servicing or repair (ORS 72.8050(1)). A mail-order catalog sale is not exempt from that content: 72.8050(2) requires the catalog itself to contain, for each good offered, the same conspicuous writing and information. A manufacturer, distributor or retailer that makes an express warranty on a consumer good must comply with 72.8050 to disclaim those implied warranties (ORS 72.8070(1)). Where no express warranty is made, or none of stated duration, the implied warranties on a consumer good endure for one year after sale, or for a motor vehicle until the earlier of one year and 12,000 miles of use; where an express warranty of stated duration is made, they endure for not less than 60 days and for the earlier of the express warranty's duration and the period just described (72.8070(2)-(3)). Outside the consumer-goods scheme, 72.3160(3) also excludes an implied warranty as to defects an examination ought to have revealed where the buyer examined the goods as fully as desired or refused to examine them, allows exclusion or modification by course of dealing, course of performance or usage of trade, and carries a livestock-between-merchants rule.
The trap
For a new consumer good, the as-is disclosure must be a conspicuous writing attached to the good and must state all three 72.8050(1) points; in a mail-order catalog sale the same writing and information must appear in the catalog for each good offered (72.8050(2)). A seller that gives an express warranty on a consumer good must also comply with 72.8050 to disclaim the implied warranties (72.8070(1)), and a short express warranty does not shorten the implied ones below 60 days (72.8070(3)). Conspicuousness is decided by the court on the totality of the circumstances (ORS 71.2010(2)(j)), and putting a disclaimer under a heading reading 'warranty' has been held not to be conspicuous. A buyer who examined the goods as fully as desired or refused to examine them also loses the implied warranty as to defects the examination ought to have revealed, with no disclaimer language at all (72.3160(3)(b)).
9 authorities
- statuteORS 72.3160enactment date not established
The words that state the rule
Subject to subsection (3) of this section, 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.” (3) Notwithstanding subsection (2) of this section: (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
- statuteORS 72.3160enactment date not established
The words that state the rule
When the buyer before entering into the contract has examined the goods or the sample or model as fully as the buyer 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 the buyer; and (c) An implied warranty can also be excluded or modified by course of dealing or course of performance or usage of trade; and (d) With respect to the sale of livestock between merchants, excluding livestock sold for immediate slaughter, there shall be no implied warranty that the livestock animal is free from disease except where the seller had knowledge or reason to know that the animal was not free from disease at the time of the sale.
- statuteORS 71.2010enactment date not established
The words that state the rule
“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.
The words that state the rule
Oregon courts have previously held that warranty disclaimers are not sufficiently conspicuous if placed under a heading titled “warranty.”
- statuteORS 72.8010enactment date not established
The words that state the rule
“Consumer good” means a new consumer good as defined in ORS 79A.1020 and includes, but is not limited to, a new motor vehicle, new manufactured dwelling, new modular home, new machine, new appliance or new like product used or bought for use primarily for personal family or household purposes. However, “consumer good” does not include a soft good or a consumable.
- statuteORS 72.8050enactment date not established
The words that state the rule
Except with respect to sale of a consumer good by means of a mail-order catalog, on sale of a consumer good on an “as is” or “with all faults” basis effective disclaimer of the implied warranty of merchantability or the implied warranty of fitness requires that a conspicuous writing attached to the consumer good clearly informs the buyer before sale in simple and concise language that: (a) The good is being sold on an “as is” or “with all faults” basis; (b) The entire risk as to the quality and performance of the good is with the buyer; and (c) If the good proves defective after purchase, the buyer and not the manufacturer, distributor or retailer assumes the entire cost of all necessary servicing or repair.
- statuteORS 72.8050enactment date not established
The words that state the rule
On sale of a consumer good by means of a mail-order catalog effective disclaimer of the implied warranty of merchantability or the implied warranty of fitness requires that the catalog offering the good contain, with respect to each item or good so offered, the conspicuous writing and information otherwise prescribed by subsection (1) of this section.
- statuteORS 72.8070enactment date not established
The words that state the rule
Nothing in ORS 72.8010 to 72.8200 affects the right of a manufacturer, distributor or retailer to make an express warranty with respect to a consumer good. Effective disclaimer of the implied warranty of merchantability or the implied warranty of fitness by a manufacturer, distributor or retailer making an express warranty with respect to a consumer good requires compliance with ORS 72.8050.
- statuteORS 72.8070enactment date not established
The words that state the rule
When with respect to sale of a consumer good to a retail buyer no express warranty is made or the duration of an express warranty is not stated, the implied warranty of merchantability or, if applicable, the implied warranty of fitness endures: (a) Except if the good is a motor vehicle, for one year after the sale; or (b) If the good is a motor vehicle, until expiration of one year after the sale or until 12,000 miles of use, whichever first occurs. (3) When with respect to sale of a consumer good to a retail buyer an express warranty of a stated duration is made, the implied warranty of merchantability or, if applicable, the implied warranty of fitness endures for not less than 60 days after the sale and for the duration of the express warranty or the duration prescribed for the good under subsection (2) of this section, whichever first occurs.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.