Generally speaking, the statute of limitations for breach of warranty claims under Article 2 of the Uniform Commercial Code begins to run when tender of delivery is made.[1] This is a helpful rule, because it provides a clear date from which to determine when the limitations period ends. But, that general rule does not apply where an express warranty “explicitly extends to future performance of the goods.” In those instances, the limitations period does not begin to run until the breach of warranty is or should be discovered.[2] This alternative rule provides no clear date from which to determine when the limitations period ends, and can be endlessly frustrating.
Unfortunately, courts sometimes have a hard time determining whether an express warranty explicitly extends to future performance of the goods, and often muddle separate and distinct issues when trying to do so. For example, federal courts applying Ohio law have observed that Ohio state courts split over whether an express warranty to repair or replace defects for a fixed period of time explicitly extends to future performance of the goods, even though such a promise clearly speaks only to what the seller will do in the event of a failure, rather than to the performance of the goods themselves.[3] Likewise, the Supreme Court of Pennsylvania held that a promise to correct defects in material or workmanship for a period of twelve months explicitly extended to future performance of the goods although, as the dissent noted “[t]his promise related to the seller’s obligations under the contract, not to the quality of the goods.”[4]
So it was refreshing to see a recent case speak clearly and correctly to the issue.[5] There, the seller’s limited warranty stated that if a defect in material or workmanship was brought to the seller’s attention within ten years from the date of sale, it would repair or replace the product, or provide a refund. The Court saw past the phrase “ten years” and recognized that this warranty did not explicitly extend to the future performance of the goods. Its reasoning was delightfully clear: “[t]his type of repair promise warrants the future performance of the warrantor, not the goods.” The Court’s opinion also helpfully collected similar holdings from other jurisdictions.
That being said, the ongoing confusion over when a warranty explicitly extends to future performance of the goods presents an important drafting consideration. It is common for an express warranty to state, for example, that a product will be free of defects in material or workmanship for some period of years following delivery. That looks suspiciously like a warranty of future performance of the goods.[6] Far better instead, if feasible for your transaction, to state that the seller makes no promises the goods will be free of defects in material or workmanship, but will correct any such defects brought to its attention within some number of years or provide a refund.
This post was drafted by Ryan Hardy, an attorney in the Spencer Fane St. Louis, MO office. For more information, visit spencerfane.com.
[1] Look, technically it begins to run when the cause of action accrues. But the cause of action for breach of warranty is defined usually to accrue at the time tender of delivery is made.
[2] Footnote 1 applies here too.
[3] Conrad v. Winnebago Industries, Inc., 2008 WL 1696950 *3 (S.D. Ohio April 9, 2008).
[4] Nationwide Ins. Co. v. General Motors Corp., 625 A.2d 1172, 1180 (Pa. 1993) (Zappala, J., dissenting).
[5] Cohan v. Pella Corp., 2015 WL 6465639 (D. S.C. Oct. 26, 2015).
[6] I’ve said this before, but I really don’t understand what it means for a product to be free of defects in material or workmanship for some period of years. A defect in material or workmanship will come into being, at the latest, at the end of the manufacturing and packaging process. Such a defect may not become evident until sometime later, but it’s there the entire time. In my world, a warranty like this would not extend to future performance, but this is not my world.