Contractual Warranty Agreements May Preclude Future Tort Recovery

Red pencil on Limited Warranty

What happens when a buyer has already received the remedy specified in the contractual warranty, only to discover the product manufacturer misrepresented the quality of its product by failing to disclose a defect?

January 11, 2022
Taylor Ostrowski - Colorado Construction Litigation Blog

When a buyer purchases a product that is later discovered to be defective, the court offers a remedy to make the buyer whole. Such remedies can arise either out of a contract, including express and/or implied warranties, or under common law through a tort theory. However, what happens when a buyer has already received the remedy specified in the contractual warranty, only to discover the product manufacturer misrepresented the quality of its product by failing to disclose a defect? Can the buyer subsequently recover for the same product under a tort theory of recovery? The Colorado Court of Appeals analyzed such questions in its December 2021 decision in Dream Finders Homes, LLC v. Weyerhaeuser NR Co., 2021 COA 143.

In Dream Finders, the court examines the rights of sophisticated buyers who purchased defective products and received a warranty from the product manufacturer with purchase. The court specifically determines whether such buyers may recover under the tort theory product misrepresentation and failure to disclose when the buyers have already received the remedy specified and the warranty expressly excludes the type of damage the buyer now seeks.

Ms. Ostrowski may be contacted at ostrowski@hhmrlaw.com



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