Worrisome Warranties: Who’s to Blame When a Floor Fails?

By D. Jeffrey Craven

Originally published in the February/March 2014 edition of Hardwood Floors Magazine.

In a recent Hardwood Floors Troubleshooting column about failed engineered flooring, there was an ongoing debate in the online comments about who is responsible for a failed installation. Inspectors blamed installers for product choice and failing to give care instructions, while some installers blamed manufacturers for inferior products. One commenter stated, “Not to mention even a bad lawyer would tear you or any manufacturer to shreds in court over selling a product into a market that cannot possibly meet the known normal conditions it will be used in. The federal UCC and merchantability laws deal with this quite clearly, trust me.”

First, let’s clear up a misconception: There is no federal UCC. The UCC, or Uniform Commercial Code, is a set of model laws created by a consortium (a bunch of lawyers) to create consistency from state to state on the law pertaining to business dealings, since such transactions often occur across states.

The particular UCC section applicable to this discussion is called “Sales,” and it deals with both merchant-to-merchant and merchant-to-consumer-type transactions in goods. The UCC does not govern services, though arguably it extends to minor services relating to the sale of goods. Additionally, the UCC is not truly “uniform,” as each state chooses whether to adopt the UCC and which provisions. Thus, there will be variances in the language from state to state.

So, who is responsible? The answer is not often clear. Depending upon circumstances, it could be the end user (consumer), the installer, the manufacturer or some combination of the three.

What is Warrantied?

The UCC laws for sales include several provisions pertaining to warranties. Some of those warranties are express and some implied. “Express” warranties are transaction-specific representations by the seller to the buyer, often in writing. In the context of engineered flooring, an example of an express warranty might be a statement in the product manual that the product “can be installed in dry climates with less than 30% average annual humidity without supplemental humidification.” If the product fails in an environment that meets or exceeds this standard, then the manufacturer has breached its warranty.

“Implied” warranties are generally accepted principles governing the sale of goods, and are so common as to be applicable even if not directly stated in the contract. Under the UCC there are two types of implied warranties applicable to the sale of goods: the warranty of merchantability and the warranty of suitability for a particular use.

Warranty of Merchantability

The warranty of merchantability applies to a “merchant” who regularly deals in the goods being sold. Typically, that would include the manufacturer and the retailer. It could also include the installer who offers a particular product for installation. This implied warranty is that the goods conform to industry standards, are fit for their ordinary use, are of uniform quality and quantity, packed and labeled per the contract for sale, and meet the specifications shown on any packaging labels. Whether this warranty would apply to an engineered flooring product that suffered from cupping, cracking or delamination would depend upon whether the particular installation where the failure occurred would be considered an industry norm for that product.

Where a manufacturer creates a product and sells it to a retailer, for example, the manufacturer may have no idea of the particular conditions or suitability of the product for its ultimate use. This is why a manufacturer’s product may be tested to a range of environments, may have a set of specifications for permitted uses, may have particular installation instructions where required, and may have maintenance or care instructions.

What establishes “ordinary” and therefore the extent of manufacturer liability is whether the product meets specifications that would be typical for expected uses of that product in the particular environment. So, an engineered product that is tested in and complies with the average humidity of Hawaii may simply not be suitable for use in Colorado. When the product is then sold in Colorado, the question becomes whether the manufacturer should be liable. If the manufacturer hasn’t represented that the product is suitable for that environment and hasn’t actively marketed the product for that environment, it would seem the manufacturer shouldn’t be liable for its product that happens to make its way into a Colorado home. The inverse might be equally true: When the manufacturer fails to test, assumes its product will work in any environment, and actively markets the product in an environment where it otherwise wouldn’t be sold, it might be liable for the floor’s failure.

Warranty of Suitability

The warranty of suitability for a particular use applies to any seller, whether or not that seller is a merchant. This implied warranty holds that if the seller knows at the time of sale the buyer’s intended use, the seller warrants that the goods are suitable for that particular purpose. This warranty far more frequently applies to a retailer or installer than a manufacturer.

A clear example of this would be an installer who convinces a homeowner to install unfinished, untreated multi-density fiberboard as a bathroom floor. When that MDF gets wet, swells and then falls apart, the installer should be liable. But what if the homeowner purchases a flooring product from a retailer and there are no specifications in the box, no instructions from the retailer, and the manufacturer cannot be reached? In that instance, the installer has no way of knowing whether the product is suitable for the buyer’s particular use, and thus may not be held to warrant that use.

But Who’s to Blame?

Unfortunately, when a product fails, the reason for the failure may be apparent (e.g., lack of moisture), but the responsibility might not be. Sometimes there will be a battle about whether the failure arose from a product defect, which would be a breach of the implied or express warranties, or an improper installation. Ultimately, determining liability will depend upon the answers to a whole host of questions, like:

• Did the homeowner buy from a retailer?

• Did that retailer provide installation and care instructions?

• Who hired the installer and what information was provided to that installer?

• Has the installer worked with the particular product before?

• Who manufactured the product?

• Has it been tested and determined to work in the broad location (geographic area)?

• What about the specific location or use?

• Does the manufacturer recommend the use in this location or environment?

• Does the manufacturer provide particular preparation, installation techniques and after-care instructions, and were they followed?

• What are the express warranties, and have they been met?

• Most importantly, if the implied warranties haven’t been met, is there a contractual disclaimer of implied warranties?

Finally, when evaluating liability, you have to consider not only express and implied warranties, but other laws, like contractor licensing requirements and consumer protection laws. For the installer, the ultimate consideration is what it will cost in terms of time, aggravation and reputation. Being the last person to touch the product (other than the end user), the installer will be the first person contacted, and likely blamed, for a failed product. Thus, the savvy installer will be proactive and avoid the discussion of liability by choosing products carefully; educating buyers on material types, their limitations and care; and participating in industry organizations to set standards and give feedback on the limitations of installed products.