Question: Warm, Inc. sells large, portable space heaters for industrial use. Warm sells Little Factory a...

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Question: Warm, Inc. sells large, portable space heaters for industrial use. Warm sells Little Factory a unit and installs it. The sales contract states, "This heating unit is sold as is. There are no warranties, express or implied." On the third night the unit is used, it causes a fire and burns down the factory. Little sues Warm. At trial, the evidence indicates that a defect in the unit caused the fire, but also that this was unprecedented at Warm. The company employed more than the usual number of quality inspectors, and its safety record was the best in the entire industry. Discuss the effect of the sales contract and Warm's safety record. Predict who will win. Strategy: The question raises three separate issues: warranty (the disclaimer), negligence (the safety record), and strict liability (the defect). What language most effectively disclaims warranties? What must a plaintiff prove to win a negligence case? To prove a strict liability case? Result: A company may disclaim all warranties by stating the product is sold "as is," especially when selling to a corporate buyer. Warm's disclaimer is effective. The company's safety record is so good that there seems to be no case for negligence. However, Little Factory still wins its lawsuit. The product was unreasonably dangerous to the user. Warm was in the business of selling such heaters, and installed the heater itself. In a strict liability case, Warm's safety efforts will not save it.