1.

THE PRODUCT LIABILITY TORTS

A. The Strict Product Liability Doctrine

In the 1960’s, the American Law Institute drafted and adopted Restatement (2d) of Torts §402A.
This section states:
“(1) One who sells any product in a defective condition
unreasonably dangerous to the user or consumer or to his property
is subject to liability for physical harm thereby caused to the
ultimate user or consumer, or to his property, if (a) the seller is
engaged in the business of selling such a product and (b) it is
expected to and does reach the user or consumer without
substantial change in the condition in which it is sold.

(2) The rules stated in subsection (1) apply although (a) the seller
has exercised all possible care in the preparation and sale of his
product, and (b) the user or consumer has not bought the product
from or entered into any contractual relation with the seller.”

The Restatement serves as the “model” for most strict product liability law. Many states have
adopted statutory versions of the Restatement. However, there is some variation among states in
the way §402A is applied.

1. Who May Be Liable for Damages Caused by Defective Products?

Any entity involved in the chain of distribution for a defective product may be liable for injuries
caused by the defect. Potentially liable parties include the manufacturer, distributor, and retailer
of the product. The purpose behind the strict product liability doctrine is to spread the risk of
loss caused by defective products away from the innocent consumer and to the entities in the
chain of distribution for the defective product that profit from the sale of the product. The seller
or retailer of a defective product may be liable for resultant injuries or damages even if neither
entity was at fault for creating the defect. However, in most states, a distributor or retailer of a
defective product found liable for injuries caused by the defect may seek indemnity against such
liability from the entity responsible for creating the defect.

The liability of distributors and sellers not at fault for creating a product defect typically survives
in states where the doctrine of joint and several liability has been abolished in favor of a pure
comparative fault system of liability. In these states, product liability is considered to be a form
of fault. Although the seller and/or distributor may not be jointly and severally liable with the
culpable manufacturer, the fault of the manufacturer is imputed by law to the distributor/ retailer.

2. Elements of the Product Liability Tort Claim

Generally, to prevail on a strict product liability claim, a plaintiff must prove that an inherent
defect in a product caused the damages claimed. In other words, the plaintiff must prove (1) that
the product was inherently defective and (2) that the defect in the product caused the injury or
damage. Both elements of the strict product liability claim must be specifically and
independently proved. The strict product liability doctrine evolved, in part, because the plaintiff
injured by a defective product will not typically be in a position to prove negligence during the
design/manufacturing process. Therefore, product liability plaintiffs are not required to prove
the specific act or omission that created the defect.

To establish the first element of a strict product liability claim, a plaintiff must prove that the
product was inherently defective. That is, the plaintiff must prove that an inherent defect existed
in the product at the time the product left the custody and control of the manufacturer/
supplier/retailer. Some states, such as Arizona, follow Restatement (2d) §402A and also require
the plaintiff to prove that the defect rendered the product unreasonably dangerous.

To establish the defect element of the claim, the plaintiff must show a specific defect, or specific
defects, that existed, or could have existed, in the product and caused the damages in issue.
Typically, opinion testimony by a qualified expert is necessary to establish that the product was
inherently defective. In a product’s liability case, plaintiff’s burden of proof is not carried by
evidence of product failure and the conclusionary argument that the product must have had some
kind of defect otherwise it would not have failed.

To establish the second element of a strict product liability claim, a plaintiff must prove that the
damages were caused by the defect in the product. Proving that the product was inherently
defective is not, by itself, sufficient to establish a prima facie product liability claim. A causal
connection must be established between the inherent defect and the injury. A defendant in a
product liability case is not liable for damages caused by a defective product unless the damages
were actually caused by the defect in the product.

A product can be defective due to a manufacturing defect, a design defect, or due to a failure to
provide adequate warning about an unavoidable danger associated with the use of the product. A
product may include a manufacturing defect if the product was not manufactured as intended. A
design defect may exist in a product if use of the product caused injury even though the product
was manufactured as designed and intended. A product may have a failure to warn defect if the
manufacturer/seller fails to provide an adequate warning of an unavoidable risk associated with
the use of the product.

3. Manufacturing Defect

A product may include a manufacturing defect if the product was not manufactured as intended.
A product may include a manufacturing defect if the product was not manufactured to its own
specifications. Again, many states differ as to whether the manufacturing defect must render the
product unreasonably dangerous.

There are many examples of manufacturing defects. A component part of a product may have
been omitted during the manufacturing process. A product may have been improperly
assembled. A product may have been broken or damaged during the manufacturing process. A
part or component of a product may be weaker or more prone to failure than intended.

The strict product liability plaintiff alleging a manufacturing defect must prove the existence of a
specific manufacturing defect to prevail on the claim. Although the product failure can be
evidence that the product was defective, the failure alone does not prove the defect. The plaintiff
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must prove, either through physical or circumstantial evidence, a specific defect that existed in
the product and caused the failure that occurred.

Courts have acknowledged that a plaintiff may not be in a position to offer direct physical
evidence of a product defect when the product is destroyed by the product failure. It has been
suggested that some manufacturers design their products so that, if the product fails, the product
will be completely destroyed by the failure and no evidence will remain to prove the specific
defect that caused the failure. For this reason, courts have developed the “malfunction theory” to
establish defect by circumstantial evidence.

The malfunction theory has particular and important application in fire subrogation cases. In
these cases, the product is very often so heavily damaged or completely destroyed by the fire that
no physical evidence exists to prove the product defect. Although the elements of the
malfunction theory differ from state to state, a plaintiff in such cases can generally establish a
manufacturing defect strict product liability claim through the following:

1. Proof that the fire originated in or at the product;

2. The product was relatively new, i.e., early in its useful life;

3. The product was properly used by the plaintiff;

4. There was never any trauma or damage to the product; and

5. Although a specific defect cannot be identified due to the physical damage to the product,
plaintiff’s expert can identify one or several ways in which the product could have been
defective and started the fire.

For example, consider the claim against the manufacturer of a coffee maker involved in a fire.
The coffee maker was purchased brand new less than a week before the fire and was properly
being used for the first time. The plaintiff’s expert eliminated all potential ignition sources in the
area of origin other than the coffeemaker and eliminated user negligence as a cause of the fire.
The coffee maker was almost completely consumed by the fire rendering it virtually useless as
physical evidence. Plaintiff’s expert can testify that these facts support the opinions that the
coffee maker was defective and that the defect caused the fire. However, to establish a prima
facie case against the manufacturer/seller, the expert must also describe a specific defective
condition that could have existed in the coffee maker and caused the fire that occurred.

The malfunction theory most probably would not be permitted to prove that a fire originating in
an eight year old battery charger was caused by an inherent defect in the battery charger when
the remains of the battery charger are so damaged that it is impossible for any expert to identify
the specific problem with the battery charger that caused the fire. A plaintiff most probably
would not be able to establish the necessary elements of the claim when the battery charger
functioned properly for eight years before the fire. Additionally, battery chargers are susceptible
to external damage and some extent external damage would have been expected over an eight
year period.

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Some states have codified affirmative defenses to product liability claims. For example, Arizona
Revised Statute 12-688 states that a defendant in a product liability action shall not be liable if
the defendant proves (1) the damage was caused by a subsequent modification of the product that
was not reasonably foreseeable or (2) the damage was caused by the use or consumption of the
product in a manner or in an activity that was not reasonably foreseeable. These statutory
affirmative defenses are not typical affirmative defenses which allow a defendant to avoid
liability even if a plaintiff proves the elements of its claim. The affirmative defense that the
damages were caused by an alteration or modification of the product that was not reasonably
foreseeable is merely a defense that the product was not inherently defective and/or the damages
were not caused by an inherent defect in the product. The affirmative defense that damages were
caused by the use of a product in a manner or in an activity that was not reasonably foreseeable
is merely a defense that the damages were not caused by an inherent defect in the product.

4. Design Defect

Design defects are usually easier to physically identify than manufacturing defects. Design
defects should be common to the entire product line and not specific, as with manufacturing
defects, only to the product involved in the incident. Therefore, evidence such as exemplar
products and design drawings should exist to identify the design defect even though the extent of
damage to the product involved in the incident may render it useless as evidence.

A court can apply a number of tests to determine whether a product is defective in design.
Design defects can be established through the aforementioned consumer expectation or
risk/benefit tests described by the Barker court. Most states also allow courts discretion to
develop other design defect tests as necessary for specific circumstances.

The consumer expectation test addresses whether a product failed to perform as safely as an
ordinary consumer would have expected when used in an intended or reasonably foreseeable
manner. The consumer expectation standard for design defect is very similar to the Uniform
Commercial Code Warranty of Fitness and Merchantability. The standard requires a product to
safely perform the purpose for which it is intended.

The risk/benefit test allows a jury to find a product defective in design even if the performance of
the product meets consumer expectations. Under California law, a plaintiff attempting to
establish a product defect case pursuant to the risk/benefit test need only show that the product
design caused injury. The burden then shifts to the defendant to show that the benefits of the
challenged design outweigh the risk of danger inherent in the design in consideration of factors
such as the gravity of the danger, the likelihood that the danger will occur, the mechanical
feasibility of a safer or alternative design, the monetary cost of an improved design, and the
adverse consequences to the product and to the consumer that would result from an alternative
design. Some states, however, require a plaintiff to prove both that the design caused the injury
and that an alternative design is feasible in consideration of the factors stated above. As many
commentators have noted, requiring a plaintiff to prove the feasibility of an alternative design
places a burden of proof on the plaintiff more akin to the burden imposed by the negligence
claim and moves the design defect claim away from the doctrine of strict product liability.

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Industry standards can be very helpful in proving design defect cases. Industry standards are
used as guidelines for the design and manufacturing of products. The American National
Standards Institute and Underwriters Laboratories have issued a variety of standards applicable
to product design and warnings. Violation of a standard can be evidence of product defect.

Many states have codified the “state of the art” defense as an affirmative defense to a design
defect product liability claim. The state of the art defense allows a defendant to avoid liability by
showing that the risks complained of by the plaintiff were not, at the time the product was sold,
discoverable using prevailing research and scientific techniques or procedures required by
federal or statute regulatory authorities charged with supervision or licensing of the product. The
state of the art defense has not been adopted in all jurisdictions. Some states, such as Arizona,
hold that the state of the art defense is a complete defense to a product liability action. In other
states, compliance with the state of the art creates a rebuttable presumption that the product was
not defective. In yet other states, a product is presumed free from defect if there was compliance
with the state of the art but the presumption may be rebutted by a preponderance of the evidence.
Finally, some states hold that compliance with the state of the art is merely evidence that the
product was not defective.

5. Failure to Warn Defects

The manufacturer/seller of a product may be liable for damages caused by an inherent danger in
a product if there was a failure to provide adequate (1) warning of the danger and (2) instructions
as to how to avoid the danger. The majority of jurisdictions impose as an element of the failure
to warn claim a requirement that the danger must have been reasonably foreseeable to the
manufacturer or discoverable through reasonable inspection/analysis for a duty to warn to arise.
Therefore, the burden of proof imposed upon a plaintiff attempting to prove a product liability
failure to warn claim is more akin to the negligence burden of proof than to the strict product
liability burden of proof.

Sometimes, the line blurs between failure to warn and design defect cases. A warning might
minimize a danger. However, a simple and inexpensive design change may totally eliminate the
danger. Plaintiffs often allege both causes of action.

To establish a defendant’s liability for damages pursuant to a product liability failure to warn
theory, the plaintiff must show the following:

1. The defendant was the manufacturer/distributor/retailer of the product;

2. Use of the product in a manner reasonably foreseeable to the manufacturer involves a

substantial danger that would not be readily recognized by the ordinary user of the product;

3. The manufacturer knew, or should have known, of the danger given the generally
recognized and prevailing scientific knowledge available at the time of the manufacture and
distribution;

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4. The defendant failed to provide an adequate warning against the danger created by the
reasonably foreseeable use, i.e., defendant failed to adequately warn against the specific risk of
harm created by the danger;

5. The defendant failed to provide adequate instruction to avoid the danger;

6. The injury would not have occurred if adequate warning and instruction had been
provided; and

7. The injury resulted from a use of the product that was reasonably foreseeable to the
defendant.

A defendant is not liable for damages pursuant to the failure to warn product liability theory even
though the warning and/or instruction was not adequate if the injured party knew of the danger,
knew how to avoid the danger and failed to take adequate precautions against the danger. In
these situations, the failure to warn did not cause the damage and it is inferred from the
plaintiff’s conduct that the damage would have occurred even if the warning had been adequate.

B. Negligence

The elements of a negligence cause of action against a product manufacturer or seller arising out
of a defective product are the same as for most any other type of negligence action: duty, breach
of duty, causation and damage. The duty, whether in design, manufacturing, or warning, is that
of reasonable care.

The negligence cause of action remains important to product liability claims despite the
tremendous expansion of the strict product liability doctrine. There are four basic reasons for a
plaintiff in a product action to plead both negligence and strict liability. Most importantly,
pleading negligence provides a product liability plaintiff with opportunities to introduce evidence
and argument to prejudice juries against product liability defendants.

Reason One: Having been instructed on strict product liability and negligence, the plaintiff’s
reduced burden under strict liability may be clearer and more easily understood by a jury. This is
especially true in design defect cases based on the “risk-utility” analysis. When asserting a
negligent design claim, a plaintiff must prove that the risk of the challenged design outweighs the
utility of the design. However, in a strict liability design defect action, the defendant has the
burden of showing that the utility of the design outweighs the risk.

Reason Two: Allowing a jury to consider two theories of recovery provides the jury with
opportunity to compromise and expands the juries’ ability to find liability. For example, a jury
can find that a product was defective but that the manufacturer and/or retailer was not at fault for
creating the defect. The jury can still find liability in such a situation with a verdict for strict
liability and against negligence.

Reason Three: It is generally accepted in jury trials that a Plaintiff is more likely to succeed if
the jury becomes angry with the Defendant. It is significantly easier to prejudice a jury against a
defendant if the general thrust of the Plaintiff’s argument is that the Defendant acted

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unreasonably or with disregard to the harm that could have resulted from the defendant’s
conduct. These arguments may not be relevant in some situations if only a strict product liability
cause of action is alleged.

Reason Four: A general finding of negligence serves as a safeguard against reversal on appeal.
The reasonableness of a manufacturer’s conduct is universally accepted as a matter for a jury.
Courts are reluctant to overturn a jury finding of negligence.

C. Warranty

The warranty claim must be considered as a potential tool to recover damages caused by
defects in products. The emergence and growth of the strict products liability doctrine has
substantially diminished the role of warranty law in product defect claims because warranty
claims are duplicative of the strict product liability claims in most product defect actions.
Warranty claims, however, may provide the basis for recovery of damages arising from defective
products in some situations where the strict product liability claim cannot be asserted.

Warranty claims are contract claims. Warranty claims arise from the contract for the sale
of a product. Contractual warranty claims are distinct from, though sometimes subsumed by, the
strict product liability and negligence tort claims.

The warranty claim is important and takes precedence over the strict product liability
claim in those situations which involve only economic losses. Economic losses include costs of
repairing the defect in the product, income or profit lost due to the failure of the product to
perform as expected, and other costs incurred due to the failure of the product to perform as
expected. Recovery of only economic losses without other property damage or personal injury is
typically not permitted pursuant to the strict product liability or negligence tort claims. (See
Economic Loss Doctrine). However, the importance of the warranty claims is not limited to only
those situations involving only pure economic loss.

Warranties can be express, implied by statute, or created by common law. Different

warranties may be available to an ordinary consumer of a product, such as a homeowner, than
are available to a business that purchases a product for use in its business operation. Express
warranties created by statute typically cannot be disclaimed or limited. Implied warranties can
usually be disclaimed or limited pursuant to statutory requirements.

Warranty claims are especially effective to recover construction defect damages from the
builder/seller of a home when the actual defective construction was done by a project
subcontractor.

1. California

Express Warranty

Express warranties are created by the express language of the written contract.
Surprisingly, express warranties are also created by statute and implied into a sales contract.

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Express warranties can exist even when there is no written contract and no discussion of
warranty during the sale of the product. California Commercial Code §2313.

The effect of an express written warranty is determined by the plain meaning of the
warranty language.

The terms of an implied express warranty are created by (1) affirmations of fact or
promise by the seller, (2) descriptions of the product by the seller, and (3) samples or models of
the product which become part of the basis of the bargain for the product. The extent of implied
express warranties are determined by a jury. The injured party need not be the purchaser of a
defective product to assert the express warranty.

Express warranties cannot be disclaimed. California Commercial Code §1793.

California Commercial Code §2313 provides:

“(1) Express warranties by the seller are created as follows:

(a) Any affirmation of fact or promise by the seller to the
buyer which relates to the goods and becomes part of the
basis of the bargain creates an express warranty that the
goods shall perform to the affirmation and promise.
(b) 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.
(c) Any sample or model which is made part of the basis of
the bargain creates an express warranty that the whole of
the good shall conform to the sample or model.
(2) It is not necessary to the creation of an express warranty that
the seller use formal words such as “warrant” or “guarantee” or
that he have a specific intention to make a warranty, but an
affirmation merely of the value of the goods or a statement
purporting to be the seller’s opinion or commendation of the goods
does not create a warranty.”

Implied Warranties

There are basically two implied warranties, the implied warranty of merchantability and
the implied warranty of fitness for particular purpose. A version of each warranty is codified in
both the Civil Code and the California Commercial Code. The warranty created by California
Commercial Code §2314 is enforceable only against merchants of the defective product. The
warranties created by Civil Code §§1792 and 1792.1 apply to retail sales of consumer goods.

All damages caused by breaches of the implied warranties are recoverable pursuant to the
warranty claims. California Commercial Code §2725 and Civil Code §3333.

All four warranties can be effectively disclaimed pursuant to statutory requirements.

California Commercial Code §2316 and California Civil Code §§1792.4, 1792.5.

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 These implied warranties are basically duplicative of the strict product liability tort claim
with respect to the recovery of property damages and personal injuries. They are effective for
the recovery of economic losses.

California Commercial Code §2314 states:

“Implied warranty; merchantability; usage of trade

(1) Unless excluded or modified, (§2316), a warranty that the
goods shall be merchantable is implied in a contract for their sale if
the seller is a merchant with respect to goods of that kind. Under
this section the serving for value of food or drink to be consumed
either on the premises or elsewhere is a sale.
(2) Goods to be merchantable must be at least such as (a) pass
without objection in the trade under the contract description; and
(b) in the case of fundable goods, are of fair average quality within
the description; and (c) are fit for the ordinary purposes for which
such goods are used; and (d) run, within the variations permitted
by the agreement, of even kind, quality, and quantity within each
unit and among all units involved; and (e) are adequately
contained, packaged, and labeled as the agreement may be require;
and (f) conform to the promises or affirmations of facts made on
the container or label if any.
(3) Unless excluded or modified (§2316) other implied warranties
may arise from the course of dealing or usage of trade.”

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 California Commercial Code §2315 states:

“Implied warranty: fitness for a particular purpose

Where the seller at the time of contracting has reason to know any
particular purpose for which the goods are required and that the
buyer is relying on the seller’s skill or judgment to select or furnish
suitable goods, there is unless excluded or modified under the next
section an implied warranty that the goods should be fit for such
purpose.”

California Civil Code §1792 states:

“Implied warranty of merchantability; manufacturers and

retail sellers; indemnity

Unless disclaimed in the manner prescribed by this chapter, every

sale of consumer goods that are sold at retail in this state shall be
accompanied by the manufacturer’s and the retail seller’s implied
warranty that the goods are merchantable. The retail seller shall
have a right of indemnity against the manufacturer in the amount
of any liability under this section.”

California Civil Code §1792.1 states:

“Goods for particular purpose; implied warranty of fitness by

manufacturer

Every sale of consumer goods that are sold at retail in this state by
a manufacturer who has reason to know at the time of the retail
sale that the goods are required for a particular purpose and that the
buyer is relying on the manufacturer’s skill or judgment to select
or furnish suitable goods shall be accompanied by such
manufacturer’s implied warranty of fitness.”

Common Law Warranties

California courts have permitted the creation of warranties at common law. The implied
warranty of habitability is an example of a common law warranty. Common law warranties are
not created by express language in a contract or by the legislature. Common law warranties are
judicially created.

Statute of Limitation

In California, a four year statute of limitation is applicable to claims arising out of

contracts for sales of goods. California Commercial Code §2725. The statute of limitation
period begins to run on the date the defective product is delivered and not on the occurrence of
the damage unless the contract specifically states otherwise. California Commercial Code
§2725.

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 The four year statute of limitation for a breach of written warranty does not begin to run
on the date of damage. Again, the statute of limitation period for a breach of written warranty
claim begins to run on the date the product is delivered. Furthermore, while California
Commercial Code §2725 prescribes a four year statute of limitation for breach of written contract
claims while California Code of Civil Procedure §338 prescribes a three year statute of limitation
for property damage and personal injury claims, California courts have held that the nature of the
injury rather than the cause of action alleged determines which statute of limitation is applicable
to a particular claim. Therefore, a three year statute of limitation may apply in California to a
claim for property damages arising from a fire allegedly caused by a defective product whether
pled in tort or contract.

2. Arizona

Arizona law is the same as California law with respect to express warranties, both written
and statutorily implied, and also with respect to the UCC implied warranties of merchantability
and fitness for particular purpose. Arizona has not adopted statutory implied product warranties
outside the scope of the UCC warranties. Arizona courts have recognized a common law
implied product warranty and a common law warranty that attaches to new home construction.
However, the terms of the implied product warranty have not been defined and the common law
implied product warranty claim appears to be duplicative of the strict product liability tort claim.

Express Warranty

Express warranties are created by the express language of a written contract. The effect
of an express written warranty is determined by the plain meaning of the warranty language.
Privity is required for an express written warranty claim.

Express written warranties are also implied by statute. A.R.S. §47-2313 states as
follows:

“(A) Express warranties by the seller are created as follows:

(1) Any affirmation of fact or promise by the seller to the
buyer which relates to the goods and becomes part of the
basis of the bargain creates an express warranty that the
goods shall perform to the affirmation and promise.
(2) 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.
(3) Any sample or model which is made part of the basis
of the bargain creates an express warranty that the whole of
the good shall conform to the sample or model.
(B) It is not necessary to the creation of an express warranty that
the seller use formal words such as “warrant” or “guarantee” or
that he have a specific intention to make a warranty, but an
affirmation merely of the value of the goods or a statement
purporting to be the seller’s opinion or commendation of the goods
does not create a warranty.”

Implied Warranties
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 Arizona has adopted the UCC versions of the implied warranty of merchantability and
the implied warranty of fitness for particular purpose. Privity is necessary to maintain a statutory
implied warranty claim. Arizona has not adopted implied warranties similar to the warranties
adopted by the California Civil Code. All damages caused by breaches of the implied warranties
are recoverable pursuant to the warranty claims.

A.R.S. §47-2314 states:

“Implied warranty; merchantability; usage of trade

(A) Unless excluded or modified, (§2316), a warranty that the
goods shall be merchantable is implied in a contract for their sale if
the seller is a merchant with respect to goods of that kind. Under
this section the serving for value of food or drink to be consumed
either on the premises or elsewhere is a sale.
(B) Goods to be merchantable must be at least such as (1) pass
without objection in the trade under the contract description; and
(2) in the case of fundable goods, are of fair average quality within
the description; and (3) are fit for the ordinary purposes for which
such goods are used; and (4) run, within the variations permitted
by the agreement, of even kind, quality, and quantity within each
unit and among all units involved; and (5) are adequately
contained, packaged, and labeled as the agreement may be require;
and (6) conform to the promises or affirmations of facts made on
the container or label if any.
(C) Unless excluded or modified (§2316) other implied warranties
may arise from the course of dealing or usage of trade.”

A.R.S §47-2315 states:

“Implied warranty, fitness for particular purpose

Where the seller at the time of contracting has reason to know any
particular purpose for which the goods are required and that the
buyer is relying on the seller’s skill or judgment to select or furnish
suitable goods, there is unless excluded or modified under §47-
2316 an implied warranty that the goods shall be fit for such
purpose.”

A.R.S. §47-2316 describes the requirements that must be met to effectively limit or
disclaim a statutorily implied warranty. The requirements are similar to the California
requirements.

Common Law Warranties

Arizona courts have recognized a common law implied warranty different from the
A.R.S. §47-2314 and A.R.S. §47-2315 implied warranties. Rocky Mountain Fire & Casualty
Co. v. Biddulph Oldsmobile, 131 Ariz. 289; 640 P.2d 851 (1982); Seekings v. Jimmy GMC of
Tucson, Inc., 130 Ariz. 596, 638 P.2d 210 (1981). Privity is not required to enforce the common
law implied warranty. The Rocky Mountain court and the Seekings court describe the common
law implied warranty claim as a tort claim different from the statutorily implied warranties which
are described as contract claims. However, no court has described the elements of the common

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law implied warranty claim. For all intents and purposes, the common law implied warranty
claim is duplicative of the strict product liability claim.

Arizona has recognized an implied warranty of habitability and workmanlike manner that
applies to new home construction. The warranty is enforceable against the builder/seller of the
home if the builder/seller is in the business of building and selling homes. Privity is not required
to enforce the warranty.

Statutes of Limitation

A.R.S. §12-551 which attempted to place a twelve year statute of repose on claims
alleging damages caused by defective products has been declared unconstitutional.

A.R.S. §12-542 places a two year limitation on claims for property damage or personal
injury.

A.R.S. §47-2725 places a four year limitation on claims for breach of contract for sale,
whether written or oral.

3. Nevada

Nevada warranty law is very similar to Arizona warranty law. Nevada recognizes
express written warranties and has adopted the UCC code provisions with respect to express and
implied warranties. Nevada has not recognized any common law implied warranties other than
the implied warranty of habitability.

Express Warranty

Express warranties are created by the express language of a written contract. The effect
of an express written warranty is construed by the plain meaning of the warranty language.
Privity is required for express written warranty claims seeking to recover property damages.
Third party beneficiaries of an express warranty may bring personal injury claims under the
warranty.

Express warranties are implied by statute as in Arizona and California. Nevada Revised
Statute §104.2313 creates express warranties by the seller of a product using the same language
as A.R.S. §47-2513 previously set forth herein.

Implied Warranties

Nevada has adopted the UCC versions of the implied warranty of merchantability and the
implied warranty of fitness for a particular purpose. Privity is necessary to maintain a statutory
implied warranty claim. Nevada has not adopted implied warranties similar to the warranties
adopted by the California Civil Code. All damages caused by breaches of the implied warranties
are recoverable pursuant to the warranty claims.

Nevada Revised Statute §104.2314 creates the implied warranty of merchantability with
the same language used by A.R.S. §47-2314 previously set forth herein. Nevada Revised Statute
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§104.2315 creates the implied warranty of fitness for particular purpose using the same language
used by A.R.S. §47-2315 previously set forth herein.

Nevada Revised Statute §104.2316 and Nevada Revised Statute §104.2719 describe the
manner in which the statutorily implied warranties can be modified or disclaimed.

Statutes of Limitation

Nevada Revised Statute §104.2725 places a four year limitation on claims for breach of a
contract for sale, whether written or oral.

Nevada Revised Statute §11.190 places a three year limitation on claims for property
damage.

4. New Mexico

New Mexico law is the same as Arizona law, with respect to express warranties, both
written and implied, and with respect to the Uniform Commercial Code’s implied warranties of
merchantability and fitness for a particular purpose. New Mexico has not adopted implied
product warranties outside the scope of the UCC warranties. New Mexico courts have
recognized common law warranty principles where the UCC does not apply.

Express Warranty

Express warranties are created by the express language of a written contract. The effect
of an express warranty is determined by the plain meaning of the contract language. An express
warranty is the written assurance by one party to a contract of the existence of a fact upon which
the other party may rely. See, Steadman v. Turner, 507 P.2d 799 (N.M. Ct. App. 1973).

Express warranties are also implied by statute pursuant to N.M. Stat. §55-2-313 which
uses the same language as A.R.S. §47-2313.

Implied Warranties

New Mexico has adopted the UCC provisions regarding the implied warranty of
merchantability and the implied warranty of fitness for particular purpose. Privity is necessary to
maintain a statutory action under an implied warranty theory. New Mexico has not adopted
implied warranties similar to those outlined in the California Civil Code. All damages caused by
a breach of an implied warranty are recoverable pursuant to the implied warranty claim.

N.M. Stat. §55-2-314 creates the implied warranty of merchantability using the same
language as A.R.S. §47-2314.

N.M. Stat. §55-2-315 creates the implied warranty of fitness for a particular purpose
using the same language as A.R.S. §47-2315.

N.M Stat. §55-2-316 describes the requirements for effective limitation on disclaimer of
the statutorily implied warranties.
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Common Law Warranties

New Mexico courts have recognized common law warranties aside from those codified
by statute. See, Camino Real Mobile Home Park Partnership v. Wolfe, 891 P.2d 1190, 1196
(N.M. 1995) (recognizing common law principles are applicable where real property is
involved).

Statute of Limitations

N.M. Stat. §55-2-725 places a four year limitation on claims for breach of a contract for
sale.

N.M. Stat. §37-1-4 places a four year statute of limitation on claims for damage to
property.

5. Utah

Utah law is the same as California, Arizona, Nevada and New Mexico law with respect to
express warranties, both written and statutorily implied, and with respect to the UCC implied
warranties of merchantability and fitness for a particular purpose. Utah has not adopted any
statutory product warranties outside the scope of the UCC warranties. Utah courts have not
specifically addressed common law implied warranty principles in product liability situations.

Express Warranty

Express warranties are created by the express language of a written contract. The effect
of an express warranty is determined by the plain meaning of the contract language.

Express written warranties are also implied by statute pursuant to Utah Code §70A-2-313
which uses the same language as A.R.S. §47-2313.

Implied Warranties

Utah has adopted the UCC version of the implied warranty of merchantability and the
implied warranty of fitness for particular purposes. Privity is required to maintain a statutory
implied warranty claim.

Utah Code §70A-2-314 adopts the implied warranty of merchantability using the same
language as A.R.S. §47-2314.

Utah Code §70A-2-315 adopts the implied warranty of fitness for a particular purpose
using the same language as A.R.S. §47-2315.

Utah Code §70A-2-316 describe how implied warranties can be effectively limited,
modified or disclaimed. See, Rawson v. Conover, 2001 UT 24 and Billings Yamaha v. Rick
Warner Ford Inc., 1984 Utah Lexis 831.

Common Law Warranties

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 Utah courts have recognized common law implied warranties in certain situations but
have not addressed common law warranty principles in product liability actions. See, Carlie v.
Morgan, 1996 Utah Lexis 47 (noting that the Utah Fit Premises Act, Utah Code §§57-22-1 et al.,
codified the common law implied warranty of habitability).

Statute of Limitations

Utah Code §70A-2-725 places a four year limitation on claims for breach of contracts for
the sale of goods.

Utah Code §78-12-26 places a three year statute of limitation on claims for property damage.

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