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50-639. Disclaimer or limitation of warranties; liabilities; attorney fees, when; section inapplicable to seed for planting, livestock for agricultural purposes or disposal of surplus property by a governmental entity. (a) Notwithstanding any other provisions of law, with respect to property which is the subject of or is intended to become the subject of a consumer transaction in this state, no supplier shall:

(1) Exclude, modify or otherwise attempt to limit the implied warranties of merchantability as defined in K.S.A. 84-2-314, and amendments thereto, and fitness for a particular purpose, as defined in K.S.A. 84-2-315, and amendments thereto; or

(2) exclude, modify or attempt to limit any remedy provided by law, including the measure of damages available, for a breach of implied warranty of merchantability and fitness for a particular purpose.

(b) Notwithstanding any provision of law, no action for breach of warranty with respect to property subject to a consumer transaction shall fail because of a lack of privity between the claimant and the party against whom the claim is made. An action against any supplier for breach of warranty with respect to property subject to a consumer transaction shall not, of itself, constitute a bar to the bringing of an action against another person.

(c) A supplier may limit the supplier's implied warranty of merchantability and fitness for a particular purpose with respect to a defect or defects in the property only if the supplier establishes that the consumer had knowledge of the defect or defects, which became the basis of the bargain between the parties. In neither case shall such limitation apply to liability for personal injury or property damage.

(d) Nothing in this section shall be construed to expand the implied warranty of merchantability as defined in K.S.A. 84-2-314, and amendments thereto, to involve obligations in excess of those which are appropriate to the property.

(e) A disclaimer or limitation in violation of this section is void. If a consumer prevails in an action based upon breach of warranty, and the supplier has violated this section, the court may, in addition to any damages recovered, award reasonable attorney fees and a civil penalty under K.S.A. 50-636, and amendments thereto, to be paid by the supplier who gave the improper disclaimer.

(f) The making of a limited express warranty is not in itself a violation of this section.

(g) This section shall not apply to seed for planting.

(h) This section shall not apply to sales of livestock for agricultural purposes, other than sales of livestock for immediate slaughter, except in cases where the supplier knowingly sells livestock which is diseased.

(i) This section shall not apply to the disposal of surplus property by any governmental entity if the governmental entity has given conspicuous written notice of the warranty limitation, exclusion or disclaimer. In the case of surplus property which is a motor vehicle, a notice of such limitation, exclusion or disclaimer shall be affixed to a side window of the motor vehicle. Such notice shall comply with the buyers guide required by 16 C.F.R. 455.2 and 16 C.F.R. 455.3 (as in effect on the effective date of this act).

History: L. 1973, ch. 217, § 17; L. 1974, ch. 230, § 5; L. 1976, ch. 236, § 8; L. 1981, ch. 215, § 1; L. 1988, ch. 193, § 2; L. 1991, ch. 159, § 11; L. 1998, ch. 99, § 2; April 16.

KANSAS COMMENT, 1973

1. Under the UCC (K.S.A. 84-2-316) a merchant may in some cases disclaim the implied warranty of merchantability which normally attaches to the sale of goods under K.S.A. 84-2-314. To be effective, such a disclaimer must be "conspicuous" (K.S.A. 84-1-201 (10)) and may not be unconscionable (K.S.A. 84-2-719). Although there are many Kansas cases giving effect to warranty disclaimers (see, e.g., Allen v. Brown, 181 K. 301, 310 P.2d 923 (1957)), the Kansas Supreme Court has evidenced sympathy with consumers whose installment contracts contain fine-print disclaimer provisions. See Steele v. J. I. Case Co., 197 K. 554, 419 P.2d 902 (1966). Under subsection (a)(1), a supplier may disclaim neither express nor implied warranties. This does not greatly change the law with respect to the implied warranty of fitness for a particular purpose (K.S.A. 84-2-315) or an express warranty (K.S.A. 84-2-313); a supplier may avoid these warranties simply by not making them, but if he does make them he should abide by them. With respect to the implied warranty of merchantability, however, sales of a product "as is", "with no warranty express or implied," or with an express warranty "in lieu of all other warranties express or implied," are precluded except as provided in subsection (c).

2. Another provision often appearing in boiler plate forms is one which limits the remedy a consumer has for breach of an express warranty. Subsection (a)(2) prohibits any exclusion or modification of the remedies the consumer otherwise has at law. Nothing, of course, prohibits a supplier from giving additional remedies, such as replacement or repairs. These, however, may not displace the other remedies found in the UCC and elsewhere. Under the UCC (K.S.A. 84-2-719 (3)), limiting consequential damages for personal injury is prima facie unconscionable; subsection (a)(2) extends this concept to remedy limitations generally.

3. Subsection (b) eliminates once and for all the concepts of "vertical" and "horizontal" privity. "Vertical privity" has in some states precluded a warranty suit by a consumer against a manufacturer or distributor with whom he had no direct contractual relationship in the purchase of a defective product. Since the Kansas Supreme Court has already eliminated any such barrier by judicial decision (Chandler v. Anchor Serum Co., 198 K. 571, 426 P.2d 82 (1967)), this subsection does not substantially change present Kansas law. "Horizontal privity" has in some states precluded a warranty suit against a seller by any plaintiff other than the immediate purchaser of a defective product; for example, bystanders who are injured by the product have been barred from a warranty action because of the absence of any contractual relationship. Under the Kansas version of the UCC (K.S.A. 84-2-318), a seller's warranty extends "to any natural person who may reasonably be expected to use, consume, or be affected by the goods and who is injured in person by breach of the warranty." This broad language has eliminated most "horizontal privity" barriers to claimants injured by defective products. Subsection (b) would carry the UCC approach one step further to include suits brought by bystanders who suffer property or economic loss as a result of a defective product. For example, under this subsection, the owner of a parked car which is damaged by another parked car whose handbrake was defective could sue the dealer, distributor or manufacturer without the barrier of "privity." Such a claimant would be a third party beneficiary of the implied warranty of merchantability which arose as a result of a prior consumer sale.

4. Subsections (c) and (d) establish realistic limitations on a supplier's liability for breach of warranty. Under subsection (c), a supplier may disclaim implied warranties (except with respect to personal injury or property damage) if he can establish that the consumer had actual knowledge of a defective condition which became the basis of the bargain. This provision is intended to cover sales of "marked down" or "irregular" goods which are sold "as is" and where the consumer is aware of the defective condition; disclaimers in such sales will of course often be reflected in lower prices. Subsection (d) makes it clear that the concept of implied warranty is a relative one: A 1949 Ford is not unmerchantable simply because if requires more maintenance than a new car. Similarly, this section is not intended of itself to give rise to implied warranties which otherwise may not exist under the law at the present time, e.g., an implied warranty in the sale of real estate.

5. In interpreting this section on warranty disclaimers, careful attention should be given to the related definitions of "merchantable" and "warranty" under section 50-624.

Law Review and Bar Journal References:

"The New Kansas Consumer Legislation," Barkley Clark, 42 J.B.A.K. 147, 191, 192 (1973).

Landlord-tenant implied warranty of habitability, 22 K.L.R. 666, 682 (1974).

Consumer protection in Tenth Judicial District, William P. Coates, Jr., 44 J.B.A.K. 67, 71, 72 (1975).

"U.C.C.—Limitations on Personal Injury Damages for Breach of Warranty," 14 W.L.J. 714 (1975).

"Torts: Strict Liability in Tort and Assumption of Risk," William T. Kilroy, 15 W.L.J. 503 (1976).

Strict liability in tort as adopted in Kansas, 25 K.L.R. 462, 467, 468 (1977).

"Lemon Aid for Kansas Consumers," Barkley Clark, 46 J.B.A.K. 143, 144, 147, 149 (1977).

"Recovery of Attorney Fees in Kansas," Mark A. Furney, 18 W.L.J. 535, 560 (1979).

"Survey of Kansas Law: Consumer Law," John C. Maloney, 27 K.L.R. 197, 208 (1979).

"Housing Defects: Homeowner's Remedies—A Time for Legislative Action," William J. Fields, 21 W.L.J. 72, 87, 88 (1981).

"Broadcast Advertising: What Has It Done to the Audience?" Ronald C. Griffin, 23 W.L.J. 237, 257, 264 (1984).

"Addressing the Consumer's Worst Nightmare: Toward a More Expansive Development of the Law of Tortious Fraud and Deceptive Practices in Kansas," Ellen Byers, 38 W.L.J. 455 (1999).

"The Untapped Potential of the Kansas Consumer Protection Act," Amy Fellows, 74 J.K.B.A. No. 4, 24 (2005).

Attorney General's Opinions:

Consumer protection; disclaimer or limitation of warranties. 86-25.

CASE ANNOTATIONS

1. Referred to; action to recover on implied warranty; application of commercial code; contract upheld. Christopher and Son v. Kansas Paint and Color Co., 215 K. 185, 215 P.2d 709. Modified, 215 K. 510, 511, 525 P.2d 626.

2. Mentioned in case holding notice requirement of 84-2-607 applicable only where ordinary buyer-seller relationship exists. Carson v. Chevron Chemical Co., 6 K.A.2d 776, 784, 635 P.2d 1248 (1981).

3. Section does not allow supplier to use limited express warranty to exclude implied warranties of merchantability and fitness. Stair v. Gaylord, 232 K. 765, 766, 771, 659 P.2d 171 (1983).

4. Used car dealer cannot limit implied warranty of merchantability and fitness by extending narrow express warranty. Duke v. King Lincoln-Mercury, Inc., 234 K. 840, 841, 676 P.2d 744 (1984).

5. Where damage to teeth from ingesting tetracycline alleged, applicability of proper statutes of limitation (60-513, 60-515, 84-2-725) determined. Cowan by Cowan v. Lederle Laboratories, 604 F.Supp. 438, 440 (1985).

6. Cited; language stamped on lease resurrecting improperly disclaimed warranties examined. Agristor Leasing v. Meuli, 634 F.Supp. 1208, 1219 (1986).

7. Where purchase order was final expression of agreement between parties, modification therein over express warranty not prohibited. Wight v. Agristor Leasing, 652 F.Supp. 1000, 1020 (1987).

8. Limitations of implied warranties under the UCC may be limited if not in conflict herewith. Farrell v. General Motors Corp., 249 K. 231, 240, 815 P.2d 538 (1991).

9. Contractual exclusion of implied warranties was void under Kansas consumer protection act. Winchester v. Lester's of Minnesota, Inc, 983 F.2d 992, 993, 996 (1992).

10. Breeder's disclaimer of implied warranties in sale of diseased hogs not unconscionable. Schweizer v. DeKalb Swine Breeders, Inc., 954 F.Supp. 1495, 1504 (1997).

11. Vehicle dealer did not commit unconscionable acts by limiting certain warranties. Tufts v. Newmar Corp., 53 F.Supp.2d 1171, 1181 (1999).

12. KCPA broadly waives any privity requirement in all breach of warranty claims. Gonzalez v. Pepsico, Inc., 489 F.Supp.2d 1233, 1243, 1244, 1245 (2007).

13. Limitations of implied UCC warranties in a consumer transaction should be adjudicated under K.S.A. 50-639, rather than under K.S.A. 50-627. Golden v. Den-Mat Corporation, 47 K.A.2d 450, 276 P.3d 773 (2012).


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