Masonry Magazine September 2008 Page. 50
Legal Issues
By Alison R. Mullins
Liability May Be Limited
What are contractual limitations of liability for warranties of merchantability? You see them all the time. They are everywhere: on the backs of event tickets, in the box of new cell phones, and in the purchase contracts of cars. What do they mean? Why do they matter to you as a mason?
Limitations of liability for warranties of merchantability limit the remedies available to purchasers when a product fails to perform its ordinary purpose. Commonly, an attempt is made to limit liability to either replacement or repair of the product. Courts across the country are repeatedly ruling on the question of whether these contractual limitations of liability are valid and binding.
As masons, your scope of work on most projects includes installing products. You need to be concerned about your liabilities for the products you are installing. In some circumstances, your warranty to the client may be broader than the warranty upstream to the manufacturer of the product you installed. Contractually, you need to provide yourself sufficient protections.
Language limiting liability
Language contractually limiting the liability must be conspicuous. One way to make the language conspicuous is to draft the clause limiting liability two font sizes larger than the rest of the contract language and putting it in bold print. The idea is that the purchaser must be aware of the disclaimer before the sale of the goods in a matter of fairness.
Sign Here
Date Here
VERY VERY FINE PRINT
Basis of the bargain rule
The basis of the bargain rule means that the purchaser is aware of the disclaimer or limitation of liability, or lack thereof, in making the decision to enter into the purchase. The rule's purpose is to prevent purchasers from agreeing to unknown and unfair disclaimers. The law surrounding the test of what constitutes the "basis of the bargain" is unsettled; however, there is a consensus that there needs to be at least simple reliance by the purchaser on statements of the seller.
Course of dealings
Despite not being a direct part of the negotiations prior to delivery, a limitation of liability regarding warranty language can be found to be part of the basis of the bargain. In their analysis, courts may look to the prior dealings between the parties to see if there was an established course of conduct that made