Of the above characters, a manufacturer arguably has the easiest time to limit its liability, as it only manufactures and sells products instead of providing services. A manufacturer`s obligations and liabilities are usually covered by the respective state version of the Uniform Commercial Code (UCC). Under the UCC, a manufacturer or seller of a product may limit its liability through published limited warranty policies, even if the end user has not signed anything and has never read the relevant terms. On the other hand, the limitation of liability and guarantees related to the services requires a written agreement expressly stating these limitations and, in some cases, certain legal guarantees for the services cannot be lifted. Product manufacturers generally disclaim all implied UCC warranties through terms and conditions that appear on their websites, in packing slips, or in any other documentation provided with the product. Other legal issues relating to exclusion of liability, consequential damages and indemnification provisions are beyond the scope of this short article. Simply put, all parties to a flooring project should carefully review their own policies, procedures, and warranty agreements to ensure they are adequately protected. If the manufacturer, distributor, GC and installer all clearly and effectively deny any responsibility for the work required to remove and replace a defective flooring product, they should never be the ones “holding the bag” to pay for these labor costs. Product manufacturers, especially in the flooring industry, almost uniformly reject the work-related adherence associated with replacing a defective product. When a product problem occurs, they deliver a new product, but pay no work to remove the old product and install the new product. This is one of the most common liability scenarios in the flooring industry and illustrates why other parties to the transaction should protect themselves. The risk is like the flu – no one wants it.
Part of every contract negotiation is the attempt to reduce risk and liability. This is especially true in the flooring industry, where the product has been traded between several companies that want to discharge their responsibility when handing over the product to a company further down the supply chain. From the manufacturer to the distributor to the entrepreneur or retailer, and then to the consumer, some or all of these parties may attempt to limit their liability through published policies or written statements. A manufacturer`s warranty (express or implied) extends to any person who can reasonably be expected to use, consume or be affected by the Goods and who is breached by a breach of warranty. For example, one court ruled that even if the GC was the buyer, a wood trader`s warranty for a project was extended to an engineer and an architect. Nevertheless, verbal representations from a distributor may also form part of the agreement and go against it. For example, I once dealt with a case where a lumber yard sold siding materials to a GC for a house in Minnesota. It turned out that the coating product was not designed for the weather in Minnesota, but the dealer representative had confirmed to the GC and the owner that the product was suitable for the intended use, that is, installation in a Minnesota home. In this case, although the Lumber Court disclaimed any implied warranty of merchantability or fitness for a particular purpose through the language on its website and on the packing slips, it may still be liable for labour costs because the other parties relied on the licensee`s verbal assurances as to the suitability of the product. The lumber yard eventually agreed to pay the labor costs because of the uncertainty surrounding the “verbal guarantees.” A prudent installer will use a well-written contract that includes a waiver of liability for a number of potential problems. This disclaimer (or possibly a separate agreement) must clearly state that the installer is not responsible for the labor costs associated with the removal or replacement of the defective equipment. The installer`s waiver must also state that the installer disclaims all liability for defective flooring and that the customer (whether a GC or the owner) must assert all claims for product defects directly against the reseller or manufacturer.
If the problem with the project is actually defective materials and there are no problems with treatment or installation, a properly formulated disclaimer is enforceable to protect the installer from the payment of additional costs and also from attempts to withhold payment in connection with the problem.. .