A representative of ADT Security Services met with John and Elaine Rose and told

Question

A representative of ADT Security Services met with John and Elaine Rose and told them that they would never lose their house to a fire and that the alarm and fire detection system would save the lives of the Roses’ dogs and family members in the event of a fire. John Rose and ADT entered into a two-page written service agreement in which ADT agreed to install an alarm system and provide security and fire detection service. Two months later, the Roses’ house caught fire, presumably after being struck by lightning. The ADT smoke alarms in the house failed to transmit a fire alarm signal and the house burned to the ground. In the resulting lawsuit, ADT argued that the service agreement Rose signed expressly contradicted and disclaimed any representations made by the ADT salesperson. Further, it argued the disclaimer in the agreement specifically disclaimed both “the implied warranties of merchantability and fitness” and was printed in bold, capital letters. Had the implied warranties been properly excluded?

Subject: MKTG1130-Business Regs and Compliance

100 words or more please

Please make sense, and don't copy from book solutions.

Explanation / Answer

Implied warranties come in two general types: merchantability and fitness.

An implied warranty of merchantability is that merchantable goods are goods fit for the ordinary purposes for which they are to be used.

In the implied warranty of fitness it does not contain a requirement that the seller be a merchant with respect to the goods sold. It just requires that the seller have the knowledge and expertise on that buyer may rely.

In this case there was a contractual relationship between the Roses and ADT. Therefore, appellants' warranty claim was right as per contract. But ADT effectively disclaimed any warranties arising from the contract.It specially disclaims both the implied warranties of merchantability and fitness and it was in clear words, printed in bold, capital letters in the section of the agreement entitled General Terms and Conditions. And the most importantly the disclaimer in the agreement was in accordance with the law governing warranty disclaimers. Therefore it the implied warranties been properly excluded from the contract.

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