Third Party Beneficiaries Of Warranties Express Or Implied In U.C.C.

All the countries in the world abide by the principle of privity of contract strictly as a footstone of the theory of contract. However, with the modern society developing, the legislations and prejudications in some countries begin to acknowledge the exception of privity of contract gradually and expand the rated scope of contract. Thereinto, the system of third party beneficiaries of warranties express or implied in U.C.C.2-318 is an outstanding example. The author will introduce and research the system in comparative law, legal hermeneutic, test case and history ways.According to U.C.C.2-313, 314 and 315, the seller in purchase and sale contracts has an express or implied obligation to assure the title conveyed is good and the goods sold are merchantable or fit for a particular purpose. The buyer may bring an action for breach of contract against the seller if he doesn't perform the warranty well. Under 2-318 the seller's warranty extends to the third party outside the contract.There are three alternatives in U.C.C.2-318. Alternative A: A seller's warranty whether express or implied extends to any natural person who is in the family or household of his buyer or who is a guest in his home if it is reasonable to expect that such person may use, consume or be affected by the goods and who is injured in person by breach of the warranty. Alternative B: A seller's warranty whether express or implied 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. Alternative C: A seller's warranty whether express or implied extends to any person who may reasonably be expected to use, consume or be affected by the goods and who is injured by breach of the warranty.Alternative A is the most conservative in aforesaid three alternatives. Firstly, The duty of the seller's warranty is only applicable to the buyer, the buyer's family, other natural persons and guests in his household. Others except foregoing persons are excluded. Secondly, The duty of the seller's warranty is limited to personal injure, barring the damage of property. Corresponding, the scope in point of warranty is extended properly under alternative B. Although the duty of the seller's warranty is also limited to personal injure, the subjects is extended to any natural person who may reasonably be expected to use, consume or be affected by the goods. In alternative C the scope in point of warranty is further enlarged. Any person who uses or consumesthe goods may bring a direct action for breach of warranty against the seller, meanwhile, the limitation to personal injure is canceled. The system of third party beneficiaries of warranties express or implied is established from 'Henningsen v. Bloomfield Motors' heard by the supreme court of New Jersey in 1960. In this case the plaintiff's husband bought a motor from a retailer and give it to the plaintiff as a Christmas present. The plaintiff is injured owing to the failure of steering wheel when she drove, so the plaintiff brought an action against the manufacturer and the retailer. The supreme court of New Jersey held: Mrs. Henningsen has the right to get the compensation of personal harm, even though she isn't a buyer and there isn't a direct contract between her and the manufacturer and the retailer. Judge Francis says that under modern marketing conditions when a manufacture puts a new automobile in the stream of trade and promotes its purchase by the public, an implied warranty that it is reasonably suitable for use as such accompanies it into the hands of the ultimate purchaser. This implied warranty of merchantability should extend to the buyer, the buyer's family and other persons whom the buyer agrees to occupy or use the automobile. The case of 'Henningsen' impacts the principle of 'privity of warranty' and combines 'vertical privity' and 'horizontal privity' to use.When we compare U.C.C.2-318 with 402A of Restatement of Torts (Second), we will find the system of third party benef...