INTRODUCTION TO BUSINESS LAW
HOMEWORK ASSIGNMENT #3
DUE: 11:59PM FRIDAY NOVEMBER 4, 2016
1. Read the attached story of Little Red Ride-in-the-Hood. View the video if you do not know who Peter Dinklage is: https://www.youtube.com/watch?v=TCCYCSACA2Y
2. Review the Implied Warranty provisions of Article 2 of the Uniform Commercial Code (UCC Sections 2-314 through 2-316 on pages B11 – B12 of Appendix B in the textbook).
4. Draft a notice for Liarliar Pantsonfire to display in the store to disclaim the implied warranties of fitness and merchantability that would otherwise be incorporated into every contract of sale under the warranty provisions of the UCC.
5. Include additional exculpatory language that could help in defending claims that might be asserted by any disgruntled purchaser. Be as creative as you wish, but please limit the total notice to 200 words or less.
6. Email your notice to me no later than the deadline [see above]. Remember to put “Homework #3” and the name you gave me to use in class in the subject line.
7. Scoring will be as follows:
Adequate legal disclaimers (1.5 points per implied warranty) 3 points
Creative additional exculpatory language/art/design/etc. 2 points
This assignment will count for up to 5 points if turned in on time. Late submissions (after the deadline) will not be graded, and will receive no points.
Maximum 200 words.
LITTLE RED RIDE-IN-THE-HOOD
Liarliar Pantsonfire is the owner of Little Red Ride-in-the-Hood, which is a bicycle store that sells used bicycles, bicycle equipment and cycling accessories for people of all ages. The store’s name refers to the fact that the building in which it is located is a bright red color.
Little Red Ride-in-the-Hood’s inventory includes children’s bicycles, which are designed for ordinary use by children; adult bicycles, which are larger and have stronger frames to support heavier adults; mountain bikes that are designed and built to withstand the extra stress of riding over rough terrain; and racing bikes designed to be light and aerodynamic to maximize speed in road races.
One day, Peter Dinklage, who is an actor in the HBO series “Game of Thrones,” comes in to buy a bicycle. A video showing his appearance on the Daily Show with Jon Stewart is here:
Peter browses around the store for a while and picks out a bike helmet, a pair of sunglasses and clothes to wear for bike riding. Then he goes to Liarliar Pantsonfire and asks him to recommend a bicycle to buy because Peter plans to start riding in bicycle races, but he has never ridden a bicycle before. Liarliar looks at Peter and tells him that a children’s bicycle would be best because it would be the right size for him.
So Peter buys a children’s bicycle and before long he enters in a bicycle race in San Francisco that goes from the Ferry Building up California Street, over a steep hill and ends up in Golden Gate Park. Unfortunately, the child’s bike does not have gears, so it is very hard to pedal up the hill, but eventually Peter gets to the top of the hill . . . in last place. Nevertheless, he figures that he will make good time going down the other side. Not surprisingly, the brakes on the kid’s bike were not designed for this kind of use, so when Peter tries to slow down, the brakes fail and he crashes.
Sadly, this is when he discovers that the bicycle helmet he bought is made of the same material as Humpty Dumpty’s shell. It does not protect him at all, so his bicycle-racing career ends on the same day as it starts.
Peter talks to his lawyer, who tells him about the implied warranty of merchantability and the implied warranty of fitness for a particular purpose under Uniform Commercial Code Sections 2-314 and 2-315.
Peter plans to sue Little Red Ride-in-the-Hood, but there is just one problem with that plan: Before opening his store, Liarliar Pantsonfire hired you as a consultant to advise him how to exclude those implied warranties from any sales at the store. You reviewed UCC Sections 2-314, 2-315 and 2-316 and you designed a sign that is prominently displayed in the store to exclude those implied warranties. If your sign is effective, Liarliar Pantsonfire will not have to worry about any liability to Peter on account of the implied warranties of merchantability and fitness for a particular purpose.
Notice of Disclaim the Implied Warranties of Fitness and Merchantability
In light of the UCC warranty provisions, it is the responsible of the buyers for ensuring that the products bought including the bicycles meets their fitness before agree to pay for the product (Saunders 77). For example, after the purchase of a bicycle and agreeing to take the bike away from the store, it will not be possible to claim any liability for the lack of fitness. The buyer will forfeit any potential claims and liability after the purchase of the bicycles. At the store, the buyer is given the opportunity to observe and evaluate the product offered to ensure it meets their needs and specifications. It is recommendable that you should not purchase any products that do not meet your requirements (Castellano and Pamela 4). However, if you decide to purchase the product, Liarliar Pantsonfire will not be liable for returning the money or paying for any liabilities associated with the product. The store will not be responsible for any undesired features noticed after the purchase of the product as the contract will be closed without any possibility of paying for liability.
Castellano, Andrea, and Pamela Tolosa. “Consumer Protection in Latin American Countries: an economic analysis of implied warranties.” The Latin American and Iberian Journal of Law and Economics 1.1 (2015): 4.
Saunders, Kurt M. “Can You Ever Disclaim an Express Warranty?.” The Journal of Business, Entrepreneurship & the Law 9.1 (2016).