(1) Words or conduct relevant to the creation of an express warranty and words or conduct tending to negate or limit a warranty must be construed wherever reasonable as consistent with each other; but, subject to the provisions of Section 55-2A-202 NMSA 1978 on parol or extrinsic evidence, negation or limitation is inoperative to the extent that the construction is unreasonable.

(2) Subject to Subsection (3), to exclude or modify the implied warranty of merchantability or any part of it the language must mention "merchantability", be by a writing and be conspicuous. Subject to Subsection (3), to exclude or modify any implied warranty of fitness the exclusion must 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".

(3) Notwithstanding Subsection (2), but subject to Subsection (4):

(a) unless the circumstances indicated 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;

(b) 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

(c) an implied warranty may also be excluded or modified by course of dealing, course of performance or usage of trade.

(4) To exclude or modify a warranty against interference or against infringement (Section 55-2A-211 NMSA 1978) 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.

History: 1978 Comp., § 55-2A-214, enacted by Laws 1992, ch. 114, § 30.

OFFICIAL COMMENTS

UCC Official Comments by ALI & the NCCUSL. Reproduced with permission of the PEB for the UCC. All rights reserved.

Uniform Statutory Source: — Sections 2-316 [55-2-316 NMSA 1978] and 2-312(2) [55-2-312 NMSA 1978].

Changes: — Subsection (2) requires that a disclaimer of the warranty of merchantability be conspicuous and in writing as is the case for a disclaimer of the warranty of fitness; this is contrary to the rule stated in Section 2-316(2) [55-2-316 NMSA 1978] with respect to the disclaimer of the warranty of merchantability. This section also provides that to exclude or modify the implied warranty of merchantability, fitness or against interference or infringement the language must be in writing and conspicuous. There are, however, exceptions to the rule. E.g., course of dealing, course of performance, or usage of trade may exclude or modify an implied warranty. Section 2A-214(3)(c) [55-2A-214 NMSA 1978]. The analogue of Section 2-312(2) [55-2-312 NMSA 1978] has been moved to Subsection (4) of this section for a more unified treatment of disclaimers; there is no policy with respect to leases of goods that would justify continuing certain distinctions found in the Article on Sales (Article 2) regarding the treatment of the disclaimer of various warranties. Compare Sections 2-312(2) [55-2-312 NMSA 1978] and 2-316(2) [55-2-316 NMSA 1978]. Finally, the example of a disclaimer of the implied warranty of fitness stated in subsection (2) differs from the analogue stated in Section 2-316(2) [55-2-316 NMSA 1978]; this example should promote a better understanding of the effect of the disclaimer.

Purposes: — These changes were made to reflect leasing practices. E.g., FMC Finance Corp. v. Murphree, 632 F.2d 413, 418 (5th Cir.1980) (disclaimer of implied warranty under lease transactions must be conspicuous and in writing). The omission of the provisions of Section 2-316(4) [55-2-316 NMSA 1978] was not substantive. Sections 2A-503 [55-2A-503 NMSA 1978] and 2A-504 [55-2A-504 NMSA 1978].

Cross References: — Article 2, esp. Sections 2-312(2) [55-2-312 NMSA 1978] and 2-316 [55-2-316 NMSA 1978], and Sections 2A-503 [55-2A-503 NMSA 1978] and 2A-504 [55-2A-504 NMSA 1978].

"Conspicuous". Section 1-201(10) [55-1-201 NMSA 1978].

"Course of dealing". Section 1-205 [55-1-205 NMSA 1978].

"Fault". Section 2A-103(1)(f) [55-2A-103 NMSA 1978].

"Goods". Section 2A-103(1)(h) [55-2A-103 NMSA 1978].

"Knows". Section 1-201(25) [55-1-201 NMSA 1978].

"Lease". Section 2A-103(1)(j) [55-2A-103 NMSA 1978].

"Lease contract". Section 2A-103(1)(l) [55-2A-103 NMSA 1978].

"Lessee". Section 2A-103(1)(n) [55-2A-103 NMSA 1978].

"Person". Section 1-201(30) [55-1-201 NMSA 1978].

"Usage of trade". Section 1-205 [55-1-205 NMSA 1978].

"Writing". Section 1-201(46) [55-1-201 NMSA 1978].

Effective dates. — Laws 1992, ch. 114, § 238 made Laws 1992, ch. 114, § 30 effective July 1, 1992.