Warranty and Disclaimers

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u03a1– Critical Analysis

Warranty Disclaimers

Dale E. Bunton

January 30, 2011

MBA 6270

Chris Banescu

u03a1 – Warranty Disclaimers

Assume a customer purchased a floor-model refrigerator from your store at a heavily discounted price. The sales contract included a provision explicitly disclaiming all express and implied warranties. The disclaimer was printed in bold lettering that was smaller than the font used in the rest of the contract, but clearly indicated the item was "AS IS" in capital letters. The refrigerator turned out to have a few problems and after three months the customer came back to the store trying to return the refrigerator. The customer is now seeking a full refund of the purchase price, claiming that your company breached the implied warranty of merchantability.

1. What is your responsibility as a manager in this situation?

It is a manager’s responsibility to be well-informed on the Uniform Commercial Code (UCC) and Warranty Laws. The Uniform Commercial Code is a set of laws regulating commercial transactions (Miller, R., & Jentz, G., 2011, pg 325). In our text on page 380, the author states that a warranty is an assurance by one party of the existence of a fact on which the other party can rely (Miller, R., & Jentz, G., 2011, pg 380). Warranty Disclaimers must be obvious and clear to the consumer. It must be written and it would be good business to verbally explain the conditions to the consumer. This is assist in avoiding any legal complications for the business.

As a manager, understanding the laws associated with warranties and clearly explaining the warranty disclaimer, if applicable) to the consumer is not only good business sense but it demonstrates that the business is being socially responsible. Corporate Responsibility is based on the idea that business can and should act ethically by being accountable to society for their actions (Miller, R., & Jentz, G., 2011, pg 59).

Evaluate the warranty disclaimer...