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Warranties

Breaches of Warranty

In General

The DTPA provision establishing a cause of action for breach of an express or implied warranty expands the remedies available to consumers for breach of warranties under the Business and Commerce Code and brings breaches of warranties in nonsale and real property transactions within the scope of the Business and Commerce Code. The DTPA does not, however, create any warranties. In other words, in order to give rise to a DTPA cause of action, the warranty that is breached must have been created or established independently of the DTPA. Express warranties are created by agreement of the parties to a contract, and implied warranties are derived from statute or common law. The mere use of the words warrant or guarantee does not automatically create an express warranty actionable under the DTPA. Nor does ``puffing'' or the expression of opinion create an express warranty. For example, an imprecise and vague statement, such as that a bank has a ``tradition of excellence'' or ``knows its customers'' does not give rise to any particular warranty concerning banking services.

The Texas Supreme Court has held that the Medical Liability and Insurance Improvement Act's provision restricting DTPA claims against physicians or health care providers precludes only DTPA suits grounded in negligence theories. Nevertheless, suits may be brought under the DTPA for knowing misrepresentation or breach of express warranty in cases in which a physician or health care provider warrants a particular result.

Because any warranty on which a DTPA action is predicated must be established independently of the Act, a defense to a breach of warranty claim that is independent of the DTPA may serve as a defense to a DTPA claim based on breach of warranty. For example, the buyer's failure to notify the seller of a breach of warranty as required under Business and Commerce Code Section 2.607(c)(1) bars the seller from recovering on a DTPA cause of action based on that breach of warranty.

Waiver of Warranty

Although the DTPA limits the circumstances under which any of its provisions may be waived by a consumer, other provisions of the Business and Commerce Code permit much more latitude in connection with the waiver or disclaimer of UCC-implied warranties. For UCC-implied warranties, an otherwise valid waiver or disclaimer of warranties will be enforceable when a breach of that type of warranty is asserted as a DTPA claim. The Texas Supreme Court considered this question in connection with an earlier version of the DTPA in which the limits on DTPA waivers were more strict than under current law. The Court reasoned that, unlike some other types of DTPA violations, a breach of warranty claim, whether brought under the DTPA or independently, always depends on the application of common law or other statutory rules for the creation of a valid and enforceable warranty. In light of the sources for breach of warranty actions, a disclaimer or limitation of liability does not offend the DTPA ``no-waiver'' provision in a suit for breach of warranty under the DTPA. For example, although a telephone company's promise to publish advertising accurately was an express warranty, a limitation of liability to the return of the amount paid for omitted or erroneous items was also part of the basis of the bargain and was valid. For a more detailed discussion of disclaimer of warranties, both in the context of DTPA and generally, see Ch. 221, Warranties.

Although a consumer may be precluded from bringing a DTPA cause of action based on breach of warranty because the warranty was effectively waived, the waiver will not affect any DTPA claim he or she might have based on other wrongdoing, such as misrepresentation or unconscionability.



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