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SB-868 Lease contracts: warranties.(2011-2012)

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SB868:v99#DOCUMENT


CALIFORNIA LEGISLATURE— 2011–2012 REGULAR SESSION

Senate Bill
No. 868

Introduced  by  Senator Walters

February 18, 2011

An act to amend Section 10214 of the Commercial Code, relating to contracts.


LEGISLATIVE COUNSEL'S DIGEST


SB 868, as introduced, Walters. Lease contracts: warranties.
Existing law governs the rights and remedies of parties to lease contracts, including specifying the creation, limitation, and negation of various types of warranties on leased goods. Existing law specifies the requirements to negate an implied warranty of merchantability and an implied warranty of fitness.
This bill would make nonsubstantive changes to those provisions.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NO   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 10214 of the Commercial Code is amended to read:

10214.
 (a) Words or conduct relevant to the creation of an express warranty and words or conduct tending to negate or limit a warranty must shall be construed wherever reasonable as consistent with each other; but, subject to the provisions of Section 10202 on parol or extrinsic evidence, negation or limitation is inoperative to the extent that the construction is unreasonable.
(b) Subject to subdivision (c), to exclude or modify the implied warranty of merchantability or any part of it the language must shall mention “merchantability,” be by a writing, and be conspicuous. Subject to subdivision (c), to exclude or modify any implied warranty of fitness, the exclusion must shall be by a writing and be conspicuous. Language to exclude all implied warranties of fitness is sufficient if it is in writing, is conspicuous and states, for example, “There is no warranty that the goods will be fit for a particular purpose.”
(c) Notwithstanding subdivision (b), but subject to subdivision (d),
(1) Unless the circumstances indicate otherwise, all implied warranties are excluded by expressions like “as is,” or “with all faults,” or by other language that in common understanding calls the lessee’s attention to the exclusion of warranties and makes plain that there is no implied warranty, if in writing and conspicuous;
(2) If the lessee before entering into the lease contract has examined the goods or the sample or model as fully as desired or has refused to examine the goods, there is no implied warranty with regard to defects that an examination ought in the circumstances to have revealed; and
(3) An implied warranty may also be excluded or modified by course of dealing, course of performance, or usage of trade.
(d) To exclude or modify a warranty against interference or against infringement (Section 10211) or any part of it, the language must be specific, be by a writing, and be conspicuous, unless the circumstances, including course of performance, course of dealing, or usage of trade, give the lessee reason to know that the goods are being leased subject to a claim or interest of any person.