Warranties and Liabilities

Ethics, Legal, Politics Case Studies WARRANTY AND ENVIRONMENTAL LIABILITIES Breach of Warranty. A warranty is a part of a contract of the sale of certain goods (Farlex Inc., 2014). It is either an express or implied assurance that the purchased good or item will perform at a certain level of efficiency. The warranty is express when the seller or manufacturer affirms facts about the item being purchased. An implied warranty is fixed and enforced by law, i.e., the product liability law.

This law guarantees or protects product quality or suitability for use, and merchantability. The Uniform Commercial Code covers these and other warranties (Farlex, Inc.). A case of product liability can occur when the buyer suffers in any way from the use of the product as a consequence of reliance or trust in the product and its warranties (Rot Law, 2011). The injured person can make a breach of warranty claim-based either on an express or implied warranty (Rot Law). Section 1.

The manufacturer of the air conditioner purchased by Arvo Lake breached the warranty for consequential damages (Willinton, 2013). Section 2. The damage in Lake's case was foreseeable. It is the manufacturer's responsibility to make sure that every item he produces and sells is in optimum condition as he expressly and implicitly guarantees. Every unit of his product line should pass rigorous standards of quality and performance and inspected carefully for all foreseeable defects, such as a hole in the refrigeration system in Lake's air conditioner. Section 3. Yes.

The manufacturer or seller is responsible for the natural consequences of the breach of warranty (Willinton, 2013). Ultimately, yes. The manufacturer or seller knows, or should know, everything about his product. When he expressly or implicitly warrants that it will function or perform at a certain level of quality or efficiency, he holds himself responsible for the entire range of extensive liabilities when it fails. He should, or is expected to, foresee all negative consequences to any failure in its use (Willinton, 2013).

In the case of Lake, who was a retired 71-year-old man, a natural consequence of a hole in the purchased air conditioning unit would be the cessation of cooling, high temperature, hyperthermia, circulatory failure and death. Limitations to product liability on account of natural consequences would be the delay or inability to deliver a product because of fire, strike, accidents, riots, mass actions (Synquest, 2010). There is no liability for loss or damage due to special or unavoidable causes beyond one's reasonable control (Synquest). Section 2 -- Environmental Liability and Due Process.

(Justia, 1991) The U.S. Court of Appeals, First Circuit, on October 29, 1991 ruled that the placing of a lien on the Reardons' property without prior hearing in a court of law or administrative hearing was not unconstitutional (Justia, 1991). It found the imposition by the Environmental Protection Agency or EPA under the Comprehensive Environmental Response Compensation and Liability Act or CERCLA did not constitute a deprivation of property or procedural due process. The court decided that the lack of re-enforcement review under CERCLA was not a challenge to the lien imposed.

The lien was meant to secure funds for clean costs at a toxic waste location. The Reardons could not invoke defense under CERCLA because CERCLA prohibits the judicial review of EPA's actions. Neither does Administrative Procedure Act have any jurisdiction in situations where CERCLA prohibits judicial review. CERCLA bars the review of the lien until EPA enforces an action. The court found that there were no safeguards for due process for the landowners before or after the placing of the lien.

And it also held that neither did the lien deprive the Reardons of their constitutionally protected interest on their property. It interpreted the lien, not a confiscation of property, but a restriction on its alienation. The lien did not constrain their use or ownership of the property. The lien, instead, provides the government's interest in the funds it spent in cleaning the property. At the same time, it insured that those responsible would pay back the public for cleanup costs (Justia).

The landowners were not entitled to a preliminary injunction as they were not likely to succeed (Justia, 1991). They already profited much from the cleanup while EPA spent money and other resources and could not possibly secure interest without the lien. The lien imposed on the landowners' property would only serve as part of the remedy for the serious health risk the public was exposed to (Justia). In cases affecting public health, a full trial does not become necessary (Clark, 1993).

The government only needs to establish probable cause that the concerned landowner should be charged clean up costs and that their land should be cleaned up. It was no surprise that the judiciary was always reluctant to favor due process challenges to CERCLA for all the environmental problems it confronts and must remedy. Environmental lien must be differentiated from those before CERCLA due process cases. The delayed judicial review fit for previous due process cases did not apply to environmental lien cases.

The CERCLA provision must have been enacted to help recover government cost activities without requiring an analysis of due process. Environmental liens are potential hindrances.