Warranty, a term used in law, in the transfer of real estate, in the sale of chattels, and in contracts of insurance. The learning of real warranties abounds in the old books, and was subtle and technical in an extreme degree; but it never had much force in the United States. For the principles governing warranties in conveyances of lands, see Deeds, and for those in insurance, see Insurance. In the sale of chattels or personal property there may be a warranty of title in the seller, or a warranty of the character or quality of the thing sold. As to title, the rule is that he who sells as his own property a chattel in his possession, must be regarded as warranting that he owns the chattel and has a right to sell it in that way, although nothing is said about the title. As to the quality, the warranty may be express or implied. An express warranty is construed with some strictness, because the buyer may and should always take care that the warranty gives him just the protection he desires, and must abide any loss arising from any deficiency or ambiguity in the terms used. If there be no express warranty, then the principle of caveat emptor (let the buyer beware) comes in. This may indeed be regarded as a law of sale.
Undoubtedly it is a rule which works much hardship and covers much fraud, but it is obvious that courts must have a general rule on this subject. The law, dealing with a buyer and a seller, must determine on which of them the risk and responsibility rest. It must therefore adopt the rule of caveat emptor, and say that it is the duty of the buyer to take sufficient care for himself, which he may do either by sufficient examination or by demanding an express warranty; or else it must say that the responsibility must rest on the seller, and that whenever the thing sold turns out to be other than the buyer supposed, the seller must make it good. Either of these rules would have some advantages and be open to some objections; and upon the whole, we believe that the commercial experience of England and of this country is decidedly in favor of the rule of caveat emptor. At the same time, the courts have applied important limitations and qualifications to the rule, and as now administered it seems to work well. - In the first place, the rule is never applied to fraud, direct or indirect, or of any kind; but while this rule is clear, what shall constitute fraud is not so plain.
It is settled that neither buyer nor seller is bound to communicate to the other information possessed exclusively by him, where the means of intelligence are equally accessible to both. The numerous cases on this question are not in harmony; but from them the general rule may be drawn, that any party may by his silence alone permit another to deceive himself, but if he cause or aid the deception by act or word it becomes a fraud on his part. Another rule is, that no mere praise or commendation of an article or invitation to trade binds the seller. The courts have made an exception to this rule in the case of an article the quality and value of which could only be known by an expert, and which the seller as an expert assumes to recommend to one who he knows relies upon his superior knowledge. And if a seller, pending the negotiation for sale, makes a positive affirmation of quality, intending to effect a sale thereby, and in fact causing or materially promoting the sale, such affirmation is a warranty. If falsely made, it is both a warranty and a fraud. It is certain that the word " warrant" need not be used, nor any other word of exactly equivalent meaning.
If the fair meaning of all the words used imports an undertaking or agreement of the seller as to the quality of the thing sold, it is a warranty. - There are interesting cases on the question how far a bill of sale effects a warranty by its description of the thing sold, and it is not easy to determine what is precisely settled by them; but the better and perhaps the prevalent rule appears to be, that a written bill of sale, or sale note, is a warranty of all that it distinctly expresses. There is in some courts a disposition to limit this implied warranty to cases where the buyer has no opportunity for examination. Indeed, it seems to be agreed that the rule of caveat emptor necessarily implies one exception; for the law would not require him to " beware" who cannot comply with the demand. If then a seller, having certain knowledge exclusively, sells under circumstances indicating not only that the buyer trusted to his representations, but was compelled to trust to them, these representations would have the effect of warranty. There has sometimes been a disposition to hold that " a sound price implies a sound quality," and therefore that all goods fairly bought for a market are warranted by the seller as fit for the market.
But this, which is the rule of the Roman civil law, seems now not to be law in any of our states excepting perhaps South Carolina and Louisiana. If an article is sold, however, not for general use or for a market, but for a specific purpose distinctly made known to the seller, he is held to warrant it to be fit for that purpose. But this rule does not apply where a specific article is bought merely in the belief that it will effect a certain purpose. - Where goods are sold by sample, there is, by the prevailing rule, an implied warranty that the goods shall be equal to the sample; but if they are as good as the sample, this is enough, although the sample had a latent defect, unless the seller knew of this defect and purposely concealed it. - No warranty can be implied from circumstances, where there is an express refusal to warrant. But this rule is never permitted to cover actual fraud. Thus ships are frequently sold by auction, "as they are," or "with all faults." This is an exclusion of warranty; but if the seller knows of faults which are not obvious, and does or says anything to conceal them or draw the attention of the buyer away from them (as where a ship had her bottom worm-eaten and her keel broken, and the seller took her from the ways and kept her afloat where the defects could not be seen), it would be held that the sale would be invalidated by the fraud, although there was no warranty.
If the contract of sale is in writing, and there be no fraud, evidence is not admissible to show that there was a parol warranty outside of the contract, nor can a written warranty be enlarged or varied by parol. A mere receipted bill of parcels, however, is not looked upon as a contract of sale, and does not exclude parol evidence of a contemporaneous warranty. - Whatever may be the law as to implied warranties, it seems to be agreed that it has no application whatever to the sale or lease of real estate. From the numerous cases on this subject, it seems difficult to draw any other rule, than that in a deed of sale, or a lease of land or of a house or store, there is no warranty other than that or those which the instrument contains; none, for example, that the premises are fit for the purpose of habitation, occupation, or cultivation, or are adapted for the particular purpose for which they, are bought or hired. - In practice, the question what is a breach of warranty arises under the sale of horses "warranted sound," more frequently than elsewhere.
Any defect impairing the animal for present service, or which in its ordinary and natural progress must do so, is generally deemed unsoundness; but a habit or propensity like crib-biting is not, though it would probably be covered by a warranty against any unsoundness or vice.