Statutory Standard

Under the Song-Beverly Consumer Warranty Act, “every sale of consumer goods that are sold at retail in this state shall be accompanied by the manufacturer’s and the retail seller’s implied warranty that the goods are merchantable. The retail seller shall have a right of indemnity against the manufacturer in the amount of any liability under this section.” (Civil Code § 1792.)

Section 1791.1 provides, in relevant part, that:

1. “‘Implied warranty of merchantability’ or ‘implied warranty that goods are merchantable’ means that the consumer goods meet each of the following:
1. Pass without objection in the trade under the contract description.
2. Are fit for the ordinary purposes for which such goods are used.
3. Are adequately contained, packaged, and labeled.
4. Conform to the promises or affirmations of fact made on the container or label.
2. [...]
3. The duration of the implied warranty or merchantability and where present the implied warranty of fitness shall be coextensive in duration with an express warranty which accompanies the consumer goods, provided the duration of the express warranty if reasonable; but in no event shall such implied warranty have a duration of less than 60 days nor more than one year following the sale of new consumer goods to a retail buyer.”

The duration of the implied warranty or merchantability and where present the implied warranty of fitness shall be coextensive in duration with an express warranty which accompanies the consumer goods, provided the duration of the express warranty if reasonable; but in no event shall such implied warranty have a duration of less than 60 days nor more than one year following the sale of new consumer goods to a retail buyer.”

“Consumer goods” means “any new product or part thereof that is used, bought, or leased for use primarily for personal, family, or household purposes, except for clothing and consumables. ‘Consumer goods’ shall include new and used assistive devices sold at retail.” (Civil Code § 1791(a).)

Breach of Implied Warranty of Merchantability Under Case Law

“The implied warranty of merchantability may be breached by a latent defect undiscoverable at the time of sale.” (See Moore v. Hubbard & Johnson [*1305] Lumber Co. (1957) 149 Cal. App. 2d 236, 241; Brittalia Ventures v. Stuke Nursery Co., Inc. (2007) 153 Cal. App. 4th 17, 24; Garlock Sealing Technologies, LLC v. NAK Sealing Technologies Corp. (2007) 148 Cal. App. 4th 937, 950–952.) Indeed, “[u]ndisclosed latent defects... are the very evil that the implied warranty of merchantability was designed to remedy.” (Willis Mining, Inc. v. Noggle (1998) 235 Ga. App. 747, 749.) In the case of a latent defect, a product is rendered unmerchantable, and the warranty of merchantability is breached, by the existence of the unseen defect, not by its subsequent discovery. (Mexia v. Rinker Boat Co., Inc. (2009) 174 Cal. App. 4th 1297, 1304-05.) “Thus, although a defect may not be discovered for months or years after a sale, merchantability is evaluated as if the defect were known.” Mexia, supra, 174 Cal. App. 4th at 1305.

Statute of Limitations Under Mexia v. Rinker Boat Co., Inc.

“The Song-Beverly Act does not include its own statute of limitations.” (Id. at 1305 citing Krieger, supra, 234 Cal.App.3d at 213,.) “California courts have held that the statute of limitations for an action for breach of warranty under the Song-Beverly Act is governed by the same statute that governs the statute of limitations for warranties arising under the Uniform Commercial Code: section 2725 of the Uniform Commercial Code.” (Id. citing Krieger, supra, at p. 215, 285 Cal.Rptr. 717;  Jensen v. BMW of North America, Inc. (1995) 35 Cal. App. 4th 112, 132;  Carrau v. Marvin Lumber & Cedar Co. (2001) 93 Cal. App. 4th 281, 297.) Under this statute:

1. An action for breach of any contract for sale must be commenced within four years after the cause of action has accrued...
2. A cause of action accrues when the breach occurs, regardless of the aggrieved party's lack of knowledge of the breach. A breach of warranty occurs when tender of delivery is made, except that where a warranty explicitly extends to future performance of the goods and discovery of the breach must await the time of such performance the cause of action accrues when the breach is or should have been discovered.”

(Mexia, supra, 174 Cal. App. 4th at 1306 citing U.Com.Code, § 2725(1), (2).)

In Mexia, appellants conceded and the court agreed that “the statute of limitations for an action for breach of warranty under the Song-Beverly Act is four years pursuant to section 2725 of the Uniform Commercial Code.”  (Id. citing Krieger, supra, 234 Cal. App. 3d at 215; Jensen v. BMW of North America, Inc., supra, 35 Cal.App.4th at p. 132, 41 Cal. Rptr. 2d 295.)  “Under that statute, a cause of action for breach of warranty accrues, at the earliest, upon tender of delivery.” Id. citing U.Com.Code, Sec. 2725(2).)