Agency to Make Warranties

What are warranties? How are they created? And, particularly, what kind of authority or employment will enable one person to make a warranty that will be binding on another person? Let us first look at warranties broadly and note their function.

When a sale is being made there is commonly a risk of some defect in the thing sold. And in connection with other kinds of transactions there is frequently a risk of loss that will occur if a certain fact exists or comes to pass. There is, for example, a risk that the horse being sold js not sound; that the lot a buyer looks at is not the lot described in his deed; or that the flour being sold will not keep sweet on a contemplated sea voyage. The most common warranties are in connection with sales.

But warranties are frequently made in connection with other kinds of legal transactions. A person taking out insurance, for example, may warrant certain facts about the thing that is being insured.' An agent is deemed to warrant his authority. A bailor may warrant against defects in the thing bailed. A hotel company may warrant that the room let for hire is free from vermin.

And there may be a warranty that food served for a price is fit to eat whether or not the serving is considered to be a sale. The warranty, looked at broadly, is a device used as an adjunct to sales and other transactions for allocating the risk that a certain fact exists or will come to pass.