united-states contract-law california legal-education lemon-law
Perfect tender rule vs (disclaimed) implied warranty?
<p>Context: This is a question I have while studying for the BAR exam. In Question 2 of this <a href="http://www.calbar.ca.gov/Portals/0/documents/admissions/Examinations/February-2021-CBX-Essay-Qs-and-Selected-Answers.pdf" rel="nofollow noreferrer">practice exam</a> (page 26), we have a contract for a good valued at $15,000 with an express warranty on its condition and a disclaimer against implied warranties of merchantability and fitness.</p>
<p>Both provided answers note that the express warranty appears to be violated and that alone is sufficient for breach of contract and various damages.</p>
<p>But they both also note that <a href="https://www.law.cornell.edu/ucc/2" rel="nofollow noreferrer">UCC Article 2</a> would also result in a breach of contract due to the failure of the seller to procure &quot;perfect goods&quot;.</p>
<p>My confusion is with the idea of &quot;<a href="https://www.law.cornell.edu/wex/perfect_tender_rule#:%7E:text=Under%20Article%202%20of%20the,in%20some%20way%20not%20perfect." rel="nofollow noreferrer">perfect</a>&quot; or &quot;<a href="https://www.law.cornell.edu/ucc/2/2-106" rel="nofollow noreferrer">conforming</a>&quot; goods. The answers seem to suppose that the goods need to be capable of ordinary use in order to be perfect/conforming, but that isn't actually in the contract itself except from the implied warranty of merchantability which was disclaimed.</p>
<p>So where does my understanding run afoul? What makes these goods imperfect if we ignore the express warranty and have disclaimed all implied warranties?</p>

<h2>In short:</h2>
<p>The implied warranty could not have been revoked under, at least, the Song-Beverly Consumer Warranty Act.</p>
<p>Warranting that a consumer goods in written promises and disclaiming that it is merchantable seem, at face value, a contradiction in term.</p>
<h2>In detail:</h2>
<p>Pursuant to subdivision (c) of <a href="https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV&amp;sectionNum=1791.1." rel="nofollow noreferrer">Civ. Code § 1791.1</a>:</p>
<blockquote>
<p>The duration of the implied warranty of merchantability and where present the implied warranty of fitness <strong>shall be coextensive in duration with an express warranty</strong> which accompanies the consumer goods, provided the duration of the express warranty is reasonable; but in no event <strong>shall such implied warranty have a duration of less than 60 days</strong> nor more than one year following the sale of new consumer goods to a retail buyer. Where no duration for an express warranty is stated with respect to consumer goods, or parts thereof, the duration of the implied warranty shall be the maximum period prescribed above.</p>
</blockquote>
<p>A relevant precedent was repeatedly confirmed that even if there wasn't set a date for the express warranty or a date that was longer than a year was set, the implied warranty may survive for &quot;latent&quot; defects:</p>
<blockquote>
<p>“More specifically, California Civil Code § 1791.1(c) provides that implied warranties of merchantability last for a minimum duration of sixty days. It follows that Plaintiffs' implied warranty explicitly extends to future performance. See <em>Kaiser Cement &amp; Gypsum Corp. v. Allis-Chalmers Mfg. Co.</em>, 35 Cal. App. 3d 948, 960 (1973). The Discovery Rule therefore applies, meaning Plaintiffs' implied warranty claim is time barred only if they actually discovered the breach or should have discovered the breach before January 8, 2014, or four years before they filed their complaint on January 8, 2018.” (<em>Audo v. Ford Motor Co.</em>, Case No.: 3:18-cv-00320-L-KSC (S.D. Cal. Jul. 6, 2018)) <em>Mexia v. Rinker Boat Co.</em>, 174 Cal.App.4th 1297, 95 Cal. Rptr. 3d 285, 294 (2009)</p>
</blockquote>
<p>And a similar finding was expressed in <em>Kaiser Cement &amp; Gypsum Corp. v. Allis-Chalmers Mfg. Co.</em>, <a href="https://casetext.com/case/kaiser-cement-gypsum-v-allis-chalmers-mfg#p960" rel="nofollow noreferrer">35 Cal. App. 3d 948, 960</a> (1973)</p>
<blockquote>
<p>&quot;In <em>Aced v. Hobbs-Sesack Plumbing Co.</em>, 55 Cal. 2d 573, 584 [12 Cal. Rptr. 257, 360 P.2d 897], our Supreme Court stated the principles of prospective warranties as follows: &quot;... if a warranty relates to a future event before which the defect cannot be discovered by the exercise of reasonable diligence, the warranty, though accompanied by a representation as to present condition, is prospective in character and the statute of limitations begins to run as of the time of that event. ... [T]he principle in question had been followed with respect to implied as well as express warranties, and it has long been recognized in this state that the time when the statute of limitations begins to run is the same whether a warranty is express or implied.&quot;</p>
</blockquote>
<p>Also, implied warranties may only be disclaimed in strict compliance with the provisions and requirements of the Song-Beverly Act (if the goods are subject to its provisions) relating to &quot;as is&quot; or &quot;with all faults&quot; sales. <a href="https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV&amp;sectionNum=1792.3." rel="nofollow noreferrer">Civ. Code § 1792.3</a> provides:</p>
<blockquote>
<p>No implied warranty of merchantability and, where applicable, <strong>no implied warranty of fitness shall be waived</strong>, except in the case of a sale of consumer goods on an “as is” or “with all faults” basis where the <strong>provisions of</strong> this chapter affecting “as is” or <strong>“with all faults” sales are strictly complied with.</strong></p>
</blockquote>
<p>The provisions governing this, <em>inter alia</em>, are <a href="https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV&amp;sectionNum=1792.4." rel="nofollow noreferrer">Civ. Code §§ 1792.4 (1)-(3)</a>, <a href="https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV&amp;sectionNum=1792.5." rel="nofollow noreferrer">1792.5</a> and, most importantly, <a href="https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV&amp;sectionNum=1793." rel="nofollow noreferrer">Civ. Code § 1793</a>. prohibits disclaiming any implied warranties guaranteed by the Song-Beverly Act which, as relevant herein, provides that:</p>
<blockquote>
<p>[A] manufacturer, distributor, or retailer, in transacting a sale in which express warranties are given, may not limit, modify, or disclaim the implied warranties guaranteed by this chapter to the sale of consumer goods.</p>
</blockquote>
<p>As I presumed based on the coextensivity provision: You can't sell a consumer goods of such price with an express warranty and no implied warranty even if you try going &quot;as is&quot; or &quot;with all faults and defects&quot;.</p>
<hr />
<h2>Conforming</h2>
<p>A consumer goods can only be &quot;conforming&quot; or may only conform to an <em>express warranty</em> not to an implied warranty since the latter means, as relevant here, that it pass without objection in the trade under the contract description <a href="https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV&amp;sectionNum=1791.1." rel="nofollow noreferrer">(§ 1791.1 (a)(1))</a> and that it is fit for the ordinary purposes for which the consumer goods is used <a href="https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV&amp;sectionNum=1791.1." rel="nofollow noreferrer">(§ 1791.1 (a)(2))</a>.</p>
<h2>&quot;New motor vehicle&quot; (§ 1793.22 (e)(2))</h2>
<blockquote>
<p>“<strong>New motor vehicle</strong>” means a new motor vehicle that is bought or used primarily for personal, family, or household purposes. “New motor vehicle” also means a new motor vehicle with a gross vehicle weight under 10,000 pounds that is bought or used primarily for business purposes by a person, including a partnership, limited liability company, corporation, association, or any other legal entity, to which not more than five motor vehicles are registered in this state. “New motor vehicle” includes […] other motor vehicle sold with a manufacturer’s new car warranty.</p>
</blockquote>
