Breach of warranty on goods in Texas — express, merchantability, and fitness

Three warranties travel with the sale of goods in Texas. One is created by what the seller said. Two are created by law and can be disclaimed.

Two rules decide these cases before the defect is discussed. The four-year clock runs from tender of delivery, not from the day the product failed. And a conspicuous "as is" clause disclaims the implied warranties, which is why that phrase appears in nearly every Texas sales document.

What the claim is

You bought something that does not match what the seller promised, is not fit for ordinary use, or cannot do the particular job the seller knew you needed it for.

Where the right comes from

Statute — Article 2 of the Uniform Commercial Code, adopted in Business and Commerce Code chapter 2. It applies to transactions in goods, meaning movable things, not services and not real property.

What a plaintiff has to prove

Express warranty — § 2.313

1. An affirmation of fact or promise, a description, or a sample or model by the seller.
2. It became part of the basis of the bargain.
3. The goods failed to conform to it.
4. Injury, proximately caused.

No magic words are needed. The seller does not have to say "warrant" or "guarantee." A statement of opinion or a commendation of the goods — puffery — does not create a warranty.

Implied warranty of merchantability — § 2.314

1. The seller is a merchant with respect to goods of that kind.
2. The goods were not merchantable when they left the seller — not "fit for the ordinary purposes for which such goods are used."
3. Notice to the seller.
4. Injury.

Merchant status is a real limit. A private individual selling a used car does not give this warranty.

Implied warranty of fitness for a particular purpose — § 2.315

1. The seller had reason to know of the buyer's particular purpose.
2. The seller had reason to know the buyer was relying on the seller's skill or judgment to select suitable goods.
3. The buyer did rely.
4. The goods were unfit for that purpose.

"Particular purpose" means something other than the ordinary use. A pump that works fine for water but fails on a corrosive fluid the seller was told about is a fitness case, not a merchantability one.

How long you have to file

Four years from tender of delivery, under § 2.725. The section says a breach of warranty occurs when tender of delivery is made, "regardless of the aggrieved party's lack of knowledge of the breach."

There is no discovery rule. A latent defect that surfaces in year five is generally too late.

One exception: where a warranty explicitly extends to future performance of the goods and discovery must await that performance, the claim accrues when the breach is or should have been discovered.

The parties may shorten the period to one year by original agreement, but may not extend it.

What has to happen before you file

Notice to the seller — § 2.607(c)(1). A buyer who has accepted the goods must, within a reasonable time after discovering or having reason to discover a breach, notify the seller. Failure to do so bars the remedy.

This is the most-missed step in Texas warranty practice. The buyer complains to a dealer, gets nowhere, and sues two years later without ever having given the seller written notice.

If the claim is also pleaded under the DTPA, the DTPA's separate 60-day pre-suit notice applies.

What the claim pays

Difference in value — the difference between the value of the goods as accepted and their value had they been as warranted.

Incidental and consequential damages, where foreseeable, subject to any contractual limitation.

Attorney's fees through CPRC § 38.001(b)(8) as a claim founded on contract, or through the DTPA where the buyer is a consumer, where the fee award is mandatory.

Treble damages where the warranty claim is pursued under the DTPA and the conduct was knowing.

Who can be sued

The seller, and for personal injury claims, the manufacturer as well.

Texas abolished the privity requirement for personal injury warranty claims, and the implied warranty of merchantability can pass to a subsequent purchaser of goods. Privity remains a live issue for claims seeking purely economic loss.

Common defenses

• Disclaimer. Section 2.316 lets a seller disclaim the implied warranties, but the disclaimer of merchantability must mention merchantability and, if written, be conspicuous. Language such as "as is" or "with all faults" also does it, if the circumstances make the exclusion plain.
• Failure to give § 2.607 notice.
• Limitations — four years from delivery.
• The statement was puffery, not an affirmation of fact.
• Misuse or alteration of the goods.
• Lack of privity, for economic loss claims.
• A contractual limitation of remedies, subject to the rule that a limited remedy failing of its essential purpose reopens the ordinary remedies.

What people get wrong

The clock starts at delivery. People assume it starts when the product broke. It does not, and there is no discovery rule for goods.

"As is" means what it says. A conspicuous as-is clause disclaims merchantability and fitness. It does not disclaim an express warranty the seller made.

Merchantability and fitness are different warranties. Merchantability is about ordinary use; fitness is about a specific job the seller knew about and advised on.

Notice is a condition, not a courtesy. A buyer who never told the seller about the problem can lose the claim on that ground alone.

Where it came from

Texas adopted the UCC in 1967, replacing a patchwork of sales law with a uniform code. Article 2 carried in the merchant-based implied warranties, the disclaimer machinery, and the delivery-based limitations rule.

The DTPA arrived six years later and made breach of warranty one of its own actionable categories, which is why a Texas warranty claim is so often pleaded as a DTPA claim instead — the consumer gets mandatory fees and the possibility of trebling, neither of which the UCC provides on its own.

Common questions

How long do I have to sue for breach of warranty in Texas?

Four years from tender of delivery, not from when the defect appeared. A written warranty that explicitly covers future performance can change that.

Does an "as is" clause defeat my claim?

It defeats the implied warranties if it is conspicuous. It does not defeat an express warranty the seller made.

Do I have to tell the seller first?

Yes. A buyer who accepted the goods must notify the seller within a reasonable time of discovering the breach, or the remedy is barred.

Can I recover attorney's fees?

Yes, through the contract fee statute or, as a consumer, through the DTPA, where they are mandatory.

What is the difference between merchantability and fitness?

Merchantability asks whether the goods work for their ordinary purpose. Fitness asks whether they work for the particular purpose the seller knew you had and advised you on.

Does this cover a house or a service?

No. Chapter 2 covers goods. Construction and repair work is governed by the implied warranty of good and workmanlike performance instead.

Where these rules live

• CPRC § 16.004 — Four-year limitations period
• CPRC § 38.001 — Recovery of attorney's fees
• CPRC § 38.002 — Procedure for recovery of attorney's fees
• CPRC § 82.005 — Design defects, where the goods caused injury
• CPRC § 16.012 — Products liability 15-year repose
• TRCP 166a — Summary judgment