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Uniform Commercial Code

Manufacturer’s Corner: A Word on Warranties of Future Performance

Courts sometimes have trouble determining whether a warranty explicitly extends to future performance.  A recent case provides refreshing clarity on the issue.

Manufacturer’s Corner: Highlighting Some Important Distinctions Between UCC Article 2 and CISG

If you’re like many manufacturers who sell internationally, your standard terms and conditions provide that the UN Convention on Contracts for the International Sale of Goods (“CISG”) does not apply to your transaction.  But, maybe they don’t, or maybe your disclaimer is ineffective (it happens a lot).  In those instances, it’s important to understand where CISG differs from Article 2 of the Uniform Commercial Code, which typically covers sales of goods within the United States.

Manufacturer’s Corner: Delivery Terms Have Important Tax Implications for Missouri Manufacturers

Today’s column is prompted by a recent decision by the Supreme Court of Missouri, in which the Court denied a Missouri manufacturer a sales tax refund.

Manufacturer’s Corner: The Danger of Conditioning Your Sale on the Buyer’s Acceptance of Your Terms

If you review the terms and conditions given by many manufacturers in their invoices (including, probably, yours), you likely will find a provision that says something to the effect of “we agree to sell you this product if, and only if, you agree to each of these terms and conditions.”  It’s a common term, and there’s a good reason for it: it can counteract standard form language in the buyer’s purchase order that you don’t like.

Manufacturer’s Corner: Warranties of Future Performance

File this one under “does your warranty really say what you think it says?”

Manufacturer’s Corner: Warranty Disclaimers By Intermediate Sellers

If you’re like many manufacturers, you have no dealings with the end user of your product.  Rather, you sell to a distributor or other intermediate seller, who then sells your product to the end user.  We have previously discussed disclaiming your implied warranties against your intermediate buyer and whether that disclaimer travels “downstream” to the end user, but we haven’t addressed whether a disclaimer made by the intermediary can protect you in a suit by the end user if, say, you failed to disclaim your implied warranties yourself or if for some reason they are not effective against the end user.

Manufacturer’s Corner: The Interplay Between Limited Remedies and Damages Limitations

I previously have urged you to limit the remedies available under your express warranty (e.g. to repair or replacement), and to disclaim liability for incidental and consequential damages.  Here, we’ll discuss a common argument made by people who want to render your efforts meaningless.

Manufacturer’s Corner: Just What Is the “Ordinary Use” for a Product Anyway?

For this installment, we turn to an aspect of the implied warranty of merchantability that has not gotten its fair share of attention here: what is “the ordinary purpose” for which your product is used?  It seems like a simple question, but it can be deceptively tricky.

Manufacturer’s Corner: Merchants, Battles of the Forms, and Forum-Selection Clauses

If you read this column with any regularity, it will not surprise you that I was thrilled to read this introduction to a recent court opinion: “The motions to dismiss in this case present a difficult legal issue, as if a civil procedure professor and a Uniform Commercial Code professor conspired on a law school exam question[.]”

Manufacturer’s Corner: Disclaiming Implied Warranties to Remote Purchasers

As I’ve noted before in these columns, an implied warranty disclaimer is an essential part of your terms and conditions.  But giving an effective disclaimer is sometimes easier said than done, especially when you do not sell your product directly to the end user, but rather through a wholesaler, retailer, or other intermediary.

Manufacturer’s Corner: Don’t Fall For Your Own “No Oral Modification” Clause

Here’s a thing that probably appears in your standard terms and conditions: “This agreement cannot be modified or rescinded, except in writing signed by an authorized agent of [your company].”  You can go ahead and check.  It’s probably down toward the bottom, above the miscellaneous provisions like choice of law.

Manufacturer’s Corner: The Importance of Notice Provisions

An easily-overlooked portion of a contract for the sale of goods is the one that addresses what notice the buyer must give the seller in the event the goods do not conform to contract specifications or warranties.  These provisions warrant your close attention, however, because they can be outcome-determinative in the event of litigation over the alleged non-conformity.

Manufacturer’s Corner: Incorporating Software Into Your Products (Part 3)

Now that we have completed our brief detour into what the Supreme Court could maybe do with the BP oil spill case if it decides to do anything with it, we resume our ongoing series on what law applies when you incorporate software into your products.

Manufacturer’s Corner: Incorporating Software Into Your Products (Part 2)

In the first installment of this series, we discussed the general scope of Article 2 of the Uniform Commercial Code, and, in the broadest terms, whether and when the purchase or sale of software falls within that scope.  In this installment, we’ll move toward our goal of understanding when your purchase or sale of software is governed by Article 2 by looking at how the question has been treated by various courts over time.

Manufacturer’s Corner: Incorporating Software Into Your Products (Part 1)

This column spends a lot of time talking about Article 2 of the Uniform Commercial Code.  A lot of time.  That’s because it’s a column directed to manufacturers, and Article 2, generally speaking, deals with sales of goods.But that “generally speaking” glosses over quite a bit, and it can cause us to miss important issues.

Loan officer’s statements about lien priority in home mortgage transaction do not give rise to borrower’s claims for breach of fiduciary duty and negligent misrepresentation against lender

The North Carolina Supreme Court recently analyzed whether a loan officer owes a borrower a fiduciary duty in a home mortgage transaction.  Dallaire v. Bank of Am., ___N.C.___, 747 S.E.2d 535 (2013), decided June 12, 2014, No. 51PA13.  Jacques and Fernande Dallaire (“Borrowers”) purchased a home as their primary residence in 1998.  Seven years later they filed Chapter 7 bankruptcy due to unrelated business debts. 

Manufacturer’s Corner: Apple Revisited

Remember when I wrote a glowing column about a Master Development and Supply Agreement Apple and its lawyers drafted?  It was one of the most-read posts I’ve written, so I bet a good number of you do.  Since the post was so popular, and since there have been some, well, we’ll say “unanticipated consequences” for Apple, I thought it warranted some follow up.

Manufacturer’s Corner: Apple’s Master Course on Master Supply Agreements

This post comes to you based on a story by the always-excellent Matt Levine of BloombergView. Evidently Apple loaned a company called GT Advanced Technologies a bunch of money so GTAT could develop and supply Apple with sapphire screens for a long time. Anyway, there may have been a default under part of that agreement, and GTAT filed for bankruptcy protection because that default was going to ruin everything (at least according to industry speculation).

Manufacturer’s Corner: A Brief Return to Our Discussion of Statutes of Limitations

A thing I like to do is approach people at parties and other gatherings and ask them if they know they can use contracts to shorten some statutes of limitations.  Usually I get quizzical looks, but I guess the context just worked better when I mentioned it while speaking at a recent event put on by the Kansas Bar Association.  An especially attentive participant asked a good follow-up question that warrants some discussion: can you shorten the limitations period for fraud?

Manufacturer’s Corner: Anatomy of a Limited Warranty (Part 5)

In the first four installments of this series, we covered the essential components of an effective limited warranty.  But each of those installments carried an important caveat: that you were not selling consumer goods.  In this fifth and final installment of the series, we turn our attention to additional warranty issues to consider when selling consumer goods.

Manufacturer’s Corner: Anatomy of a Limited Warranty (Part 4)

We pick up our discussion of effective limited warranties by addressing limitations of remedies.

Manufacturer’s Corner: Anatomy of a Limited Warranty (Part 3)

In our last installment in this series, we looked at the express warranty portion of an effective limited warranty.  We now turn our attention to the importance of shortening the limitations period for bringing a warranty claim.  Please remember that, for our purposes here, we’re assuming a non-consumer sale.

Manufacturing Custom-made Goods in the United States

Pat and I recently had the opportunity to publish an article with Practical Law, called “Manufacturing Custom-made Goods in the United States.”

Manufacturer’s Corner: Anatomy of a Limited Warranty (Part 2)

In our last installment, I introduced the importance of making your warranty terms clear.  Now, we turn to the specifics, beginning with the express warranty itself.  Here are some of the boxes you need to check when reviewing your express warranty.

Manufacturer’s Corner: Anatomy of a Limited Warranty (Part 1)

It’s a sad fact of life at companies and law firms that sometimes things are done a certain way just because that’s how they’ve always been done. Part of the reason this column spends so much time talking about your terms and conditions, however, is because that’s dangerous: how you do things now should be informed by the past, but not bound by the past.

Eighth Circuit continues to hold that Missouri’s economic loss doctrine bars negligent misrepresentation claims involving allegedly defective or unsuitable products

Manufacturers and lessors of equipment and other products doing business in Missouri can take heart that the Eighth Circuit has issued its third opinion in the past year applying Missouri’s economic loss doctrine to bar negligent misrepresentation claims in cases involving allegedly defective or unsuitable products. 

Manufacturer’s Corner: Revocation of Acceptance and the Statute of Frauds

I’m going to break my self-imposed rule of writing for manufacturers instead of lawyers. This post is some pretty in-the-weeds stuff, but the topic has been on my mind and I think it’s interesting. If you have opinions on it, I’d love to hear them.

Manufacturer’s Corner: Dealing With Sales on Approval or Return

Expanding on our recent discussion about how your shipping terms can affect risk of loss in the product you sell, let’s turn to other contract provisions that implicate the same issue: sales on approval or return.

Manufacturer’s Corner: Responding to Claims That Your Goods Do Not Conform to Contract Specifications

It’s inevitable: at some point, you will ship goods to your buyer, and the buyer will complain that they don’t conform to the contract specifications.  When you’re dealing with a small shipment or a great customer, often the simplest solution is to accept the return and send replacement goods.  Other times, however, you’ll be dealing with a major shipment or a problem customer, and you must be certain that you protect yourself while responding to the customer’s concerns.

Manufacturer’s Corner: When Bankruptcy and Your Shipping Terms Collide

In recent installments of the Manufacturer’s Corner, we have discussed how to protect yourself from insolvent customers and how your shipping terms can expose you to unexpected risk. Thanks to the Bankruptcy Court for the Eastern District of Pennsylvania, we can explore how those two issues play together.

Manufacturer’s Corner: Recent Development in Implied Warranties (Part 2)

We continue our discussion of June’s interesting implied warranty cases with a trip south to the Supreme Court of Texas.  As I mentioned in the previous installment of the Manufacturer’s Corner, the Court declared a simple, bright-line rule on how a valid disclaimer of the implied warranty of merchantability affects remote purchasers.

Manufacturer’s Corner: Recent Developments in Implied Warranties

In this head-scratcher of an opinion, the Michigan Court of Appeals makes three legal conclusions that will shock practitioners.

Manufacturer’s Corner: Protecting Against the “Efficient Breach”

The Oregon Supreme Court has given us a great platform to discuss what happens when a buyer simply decides that breaching the contract is a better idea than performing.  It’s an important case to consider, both in your capacity as a seller of goods, and in your capacity as a frequent buyer of goods under long-term sales contracts.

Manufacturer’s Corner: Can You Prove the Contents of Your Shipment?

In a happy coincidence of timing, the Eleventh Circuit Court of Appeals recently issued an entertaining opinion addressing the Carmack Amendment, which is a federal law limiting the liability of motor carriers for loss or damage of goods during shipment. The opinion will allow us to continue our discussion of mitigating shipping risks, introduced in the last installment of this column.

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