Article by James J. White
I suspect that most American lawyers and law students regard express warranty as neither more nor less than a term in a contract, a term that is subject to conventional contract rules on formation, interpretation, and remedy. Assume, for example, that a buyer sends a purchase order to a seller and the purchase order specifies the delivery of 300 tons of “prime Thomas cold rolled steel.” The acknowledgment also describes the goods to be sold as “prime Thomas cold rolled steel.” Every American lawyer would agree that there is a contract to deliver such steel and furthermore would conclude that the seller makes an express warranty that the steel delivered would conform to that description and that the seller would be liable for breach of its contract if it failed to deliver steel that conformed to that description. So we would say that the description is an express warranty and that the express warranty is neither more nor less than a term in a contract.
But section 2-313 of the Uniform Commercial Code on express warranty has language that fits only uncomfortably with that “contract term” analysis. Section 2-313(1)(b) reads: “Any description of the goods which is made part of the basis of the bargain creates an express warranty that the goods shall conform to the description.” If this term “prime Thomas cold rolled steel” is merely a term in a contract, then why is there an additional requirement that the term be “part of the basis of the bargain,” and why does similar language appear with respect to “promises” in 2-313(1)(a), and with respect to “samples and models” in 2-313(1)(c)? Normal rules of contract interpretation provide that one is bound by terms of the contract—at least where he has acknowledged his assent by signing—whether or not he has read the contract, whether or not he knows what it says, and whether or not he has relied. Assume that you promise to pay me in a fixed number of deutschemarks instead of dollars. Assume that at the time of contracting I was indifferent to the mode of payment and failed to notice the deutschemark determination. I could still require you to pay in deutschemarks, and I could enjoy the benefits of an appreciation of deutschemarks against dollars that occurred since the signing even though I had not relied on that term. Even if I would have preferred a contract to buy in dollars, I could still insist on deutschemarks.
The basis of the bargain language that now appears in 2-313 is a vestige of “warranty law.” Warranty law started as tort but progressively, from sometime in the nineteenth century, has moved step-by-step from tort to contract. Those steps were hastened by the adoption of the Uniform Sales Act in many states in the twentieth century and accelerated by the post-war adoption of section 2-313 of the UCC by each state except for Louisiana. The promulgation and adoption of the United Nations Convention on Contracts for the International Sale of Goods (CISG) may be regarded as the last step in the move to contract, for it abandons the last vestige of tort and self-consciously makes express warranty into contract and nothing more. Whether and to what extent the revised Article 2 of the Uniform Commercial Code should follow the CISG is the subject of current debate.
About the Author
James J. White. Robert A. Sullivan Professor of Law, University of Michigan Law School.
Citation
72 Tul. L. Rev. 2089 (1998)