Breach of Warranty Demand Letter - Arkansas

DEMAND LETTER -- BREACH OF WARRANTY

State of Arkansas

[________________________________]
Attorneys at Law
[________________________________]
[________________________________], Arkansas [____]
Telephone: [________________________________]
Facsimile: [________________________________]
Email: [________________________________]
Arkansas Bar No. [________________________________]

SENT VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED
AND VIA FIRST-CLASS U.S. MAIL

[__/__/____]

[________________________________]
[________________________________]
[________________________________]
[________________________________], [________________________________] [____]

Re: DEMAND FOR BREACH OF EXPRESS AND IMPLIED WARRANTIES
Our Client: [________________________________]
Product/Goods: [________________________________]
Model/Serial No.: [________________________________]
Purchase Date: [__/__/____]
Purchase Price: $[________]
Purchase Location: [________________________________]
Invoice/Receipt No.: [________________________________]
Demand Amount: $[________]

Dear [________________________________]:

This firm represents [________________________________] ("our Client") in connection with the above-referenced transaction. We write to demand compensation for your breach of express and implied warranties under the Arkansas Uniform Commercial Code, Ark. Code Ann. §§ 4-2-313 through 4-2-318, and other applicable law. This letter constitutes formal notice of breach pursuant to Ark. Code Ann. § 4-2-607(3)(a) and demand for remedies as detailed below.

I. FACTUAL BACKGROUND

A. The Transaction

On or about [__/__/____], our Client purchased [________________________________] (the "Product") from [________________________________] for a total purchase price of $[________]. The transaction occurred at [________________________________] and is evidenced by [________________________________] (invoice, receipt, purchase order, etc.).

[Describe the circumstances of the purchase, including any representations made by the seller, advertising, product literature, or discussions about the product's qualities, capabilities, or intended use:]

[________________________________]
[________________________________]
[________________________________]

B. Express Representations and Warranties

At the time of sale, you made the following express representations regarding the Product:

☐ Verbal statements by sales representative [________________________________] on [__/__/____], including: [________________________________]
☐ Written product description in [catalog/advertisement/listing/website] dated [__/__/____], stating: [________________________________]
☐ Product packaging and labeling stating: [________________________________]
☐ Written warranty document dated [__/__/____], warranting: [________________________________]
☐ Product manual or specification sheet stating: [________________________________]
☐ Sample or model displayed at [________________________________] on [__/__/____]
☐ Other representations: [________________________________]

C. The Defects and Nonconformity

Beginning on or about [__/__/____], the Product exhibited the following defects and failures to conform to the warranties described above:

[Describe each defect in detail, including when it was first discovered, how it manifests, and how it differs from what was warranted:]

1. [________________________________]
2. [________________________________]
3. [________________________________]

D. Prior Notice and Attempts to Resolve

Our Client provided you with notice of these defects and requested a remedy on the following occasions:

Despite reasonable notice and opportunity to cure, you have failed to provide an adequate remedy. This letter constitutes additional formal notice of breach under Ark. Code Ann. § 4-2-607(3)(a). Under Arkansas law, the notice requirement is not stringent; notice need only be "sufficient to inform the seller that the transaction is claimed to involve a breach." See Hardison v. Mack Trucks, Inc., 9 Ark. App. 225, 657 S.W.2d 578 (1983).

II. WARRANTIES UNDER ARKANSAS LAW

A. Express Warranties -- Ark. Code Ann. § 4-2-313

Under Ark. Code Ann. § 4-2-313, express warranties are created when:

(a) Any affirmation of fact or promise made by the seller to the buyer that relates to the goods and becomes part of the basis of the bargain creates an express warranty that the goods shall conform to the affirmation or promise;

(b) Any description of the goods which is made part of the basis of the bargain creates an express warranty that the goods shall conform to the description; and

(c) Any sample or model which is made part of the basis of the bargain creates an express warranty that the whole of the goods shall conform to the sample or model.

It is not necessary for the seller to use formal words such as "warranty" or "guarantee," nor is it necessary that the seller have a specific intention to make a warranty. Ark. Code Ann. § 4-2-313(2).

Application: Your representations described in Section I.B above constitute express warranties under § 4-2-313. The Product fails to conform to these warranties because [________________________________].

B. Implied Warranty of Merchantability -- Ark. Code Ann. § 4-2-314

Under Ark. Code Ann. § 4-2-314, a warranty of merchantability is implied in every sale of goods by a merchant who deals in goods of that kind. To be merchantable, goods must, at minimum:

(a) Pass without objection in the trade under the contract description;
(b) Be of fair average quality within the description;
(c) Be fit for the ordinary purposes for which such goods are used;
(d) Be of even kind, quality, and quantity within each unit;
(e) Be adequately contained, packaged, and labeled; and
(f) Conform to any promises or affirmations of fact made on the container or label.

Application: The Product is not merchantable because it fails to be fit for the ordinary purposes for which [________________________________] is used, specifically: [________________________________]. A reasonable consumer purchasing this Product would expect [________________________________], but the Product [________________________________].

C. Implied Warranty of Fitness for a Particular Purpose -- Ark. Code Ann. § 4-2-315

☐ Applicable. Where the seller at the time of contracting has reason to know any particular purpose for which the goods are required and that the buyer is relying on the seller's skill or judgment to select or furnish suitable goods, there is an implied warranty that the goods shall be fit for such purpose.

Application: At the time of purchase, our Client communicated to you that the Product was needed for the particular purpose of [________________________________]. You had reason to know of this particular purpose because [________________________________]. Our Client relied on your skill and judgment in selecting the Product, as evidenced by [________________________________]. The Product is not fit for this particular purpose because [________________________________].

☐ Not applicable to this claim. (Delete this section if not asserting this warranty.)

D. Warranty Disclaimers Are Ineffective or Inapplicable

☐ No disclaimer was provided. You did not disclaim the implied warranties at or before the time of sale.

☐ Disclaimer is ineffective under Ark. Code Ann. § 4-2-316. Any attempted disclaimer fails because:
☐ The disclaimer of merchantability does not mention "merchantability" as required by § 4-2-316(2)
☐ The disclaimer is not conspicuous as required by § 4-2-316(2)
☐ The disclaimer was not in writing as required for fitness for particular purpose under § 4-2-316(2)
☐ The disclaimer is unconscionable under Ark. Code Ann. § 4-2-302
☐ Other: [________________________________]

☐ Disclaimer is preempted by the Magnuson-Moss Warranty Act. Under 15 U.S.C. § 2308(a), a supplier who provides a written warranty on consumer goods may not disclaim or modify any implied warranty. Because you provided a written warranty with the Product, any attempted disclaimer of the implied warranty of merchantability or fitness is void.

III. ADDITIONAL STATUTORY CLAIMS

A. Magnuson-Moss Warranty Act -- 15 U.S.C. §§ 2301-2312

☐ Applicable (consumer goods only). The Product constitutes "consumer goods" as defined in 15 U.S.C. § 2301(1) -- tangible personal property normally used for personal, family, or household purposes. Your written warranty constitutes a ☐ "full" ☐ "limited" warranty under 15 U.S.C. § 2303.

Under the Magnuson-Moss Act:

• Written Warranty Obligations (15 U.S.C. § 2304): A warrantor providing a full warranty must remedy any defect or malfunction within a reasonable time and without charge. If the product cannot be repaired after a reasonable number of attempts, the consumer may elect either a refund or replacement (15 U.S.C. § 2304(a)(4)).

• Prohibition on Disclaimer of Implied Warranties (15 U.S.C. § 2308(a)): A supplier providing a written warranty may not disclaim or modify implied warranties. A limitation on the duration of an implied warranty is permitted only if reasonable, not unconscionable, and clearly stated (15 U.S.C. § 2308(b)).

• Attorney's Fees and Costs (15 U.S.C. § 2310(d)(2)): A prevailing consumer may recover reasonable attorney's fees and costs in addition to damages.

• Informal Dispute Resolution (15 U.S.C. § 2310(a)): If your warranty includes a binding arbitration clause or informal dispute resolution mechanism, it must comply with FTC regulations at 16 C.F.R. Part 703.

Application: You have breached your written warranty by failing to [________________________________] after [____] repair attempts / [____] days.

☐ Not applicable. (Delete if not asserting Magnuson-Moss claims.)

B. Arkansas Deceptive Trade Practices Act -- Ark. Code Ann. §§ 4-88-101 to 4-88-113

☐ Applicable. Your conduct constitutes deceptive trade practices under the Arkansas Deceptive Trade Practices Act ("ADTPA") because:

☐ Knowingly making a false representation as to the characteristics, uses, or benefits of the Product (Ark. Code Ann. § 4-88-107(a)(1))
☐ Representing that the Product is of a particular standard, quality, or grade when it is not (§ 4-88-107(a)(2))
☐ Advertising goods with the intent not to sell them as advertised (§ 4-88-107(a)(5))
☐ Engaging in unconscionable, false, or deceptive acts or practices in business, commerce, or trade (§ 4-88-107(a)(10))
☐ Other: [________________________________]

Under Ark. Code Ann. § 4-88-113(f), a consumer who prevails under the ADTPA may recover actual damages, reasonable attorney's fees, and, in cases involving willful or knowing violations, the court may award up to three times actual damages.

☐ Not applicable. (Delete if not asserting ADTPA claims.)

C. Arkansas Product Liability -- Ark. Code Ann. § 4-86-101

☐ Applicable. Under Ark. Code Ann. § 4-86-101, a manufacturer or supplier of goods shall be liable for breach of warranty, whether express or implied, to any natural person who may reasonably be expected to use, consume, or be affected by the goods and who is injured by breach of warranty. This statute extends warranty protection beyond the immediate purchaser to foreseeable users.

☐ Not applicable. (Delete if not asserting product liability warranty claims.)

IV. THIRD-PARTY BENEFICIARY STATUS -- ARK. CODE ANN. § 4-2-318

Arkansas has adopted Alternative B of UCC § 2-318, which extends warranty protection to "any natural person who may reasonably be expected to use, consume or be affected by the goods and who is injured by breach of the warranty." Ark. Code Ann. § 4-2-318.

☐ Our Client is the direct purchaser.
☐ Our Client is not the direct purchaser but is a person who may reasonably be expected to use the Product and has been injured by the breach of warranty. Our Client's status as a third-party beneficiary of the warranty is established because [________________________________].

V. DAMAGES

Under Ark. Code Ann. § 4-2-714, the measure of damages for breach of warranty is the difference at the time and place of acceptance between the value of the goods accepted and the value they would have had if they had been as warranted, unless special circumstances show proximate damages of a different amount.

Under Ark. Code Ann. § 4-2-715, the buyer may also recover incidental and consequential damages:

• Incidental damages (§ 4-2-715(1)) include expenses reasonably incurred in inspection, receipt, transportation, and care and custody of goods rightfully rejected, commercially reasonable charges, expenses, or commissions in effecting cover, and any other reasonable expense incident to the delay or other breach.

• Consequential damages (§ 4-2-715(2)) include any loss resulting from general or particular requirements and needs of which the seller at the time of contracting had reason to know and which could not reasonably be prevented by cover or otherwise, and injury to person or property proximately resulting from any breach of warranty.

Damages Calculation

VI. LIMITATION OF REMEDIES -- ARK. CODE ANN. § 4-2-719

☐ No limitation of remedy clause applies.

☐ Limitation of remedy clause has failed of its essential purpose. Under Ark. Code Ann. § 4-2-719(2), where circumstances cause an exclusive or limited remedy to fail of its essential purpose, remedy may be had as provided in the UCC. Your limitation of remedy to [repair/replacement] has failed of its essential purpose because you have been unable or unwilling to repair or replace the Product after [____] attempts over [____] days, leaving our Client without any effective remedy. See J.I. Case Co. v. Borak, 377 U.S. 426 (1964); see also Arkansas case law applying § 4-2-719(2) where repair-or-replace remedies prove inadequate.

☐ Limitation of consequential damages is unconscionable. Under Ark. Code Ann. § 4-2-719(3), limitation of consequential damages for injury to the person in the case of consumer goods is prima facie unconscionable.

VII. STATUTE OF LIMITATIONS

Under Ark. Code Ann. § 4-2-725, an action for breach of any contract for sale must be commenced within four (4) years after the cause of action has accrued. A cause of action accrues when the breach occurs, regardless of the aggrieved party's lack of knowledge of the breach. A breach of warranty occurs when tender of delivery is made, except that where a warranty explicitly extends to future performance of the goods and discovery of the breach must await the time of such performance, the cause of action accrues when the breach is or should have been discovered.

This claim is timely filed. The Product was purchased on [__/__/____], and this demand is made on [__/__/____], which is within the four-year limitations period.

☐ Additionally, the warranty explicitly extends to future performance (warranting the Product for [____] years), and the breach was not discovered until [__/__/____], which is within four years of discovery.

VIII. DEMAND

Based on the foregoing, our Client demands that you, within thirty (30) days of receipt of this letter:

☐ Pay the sum of $[________] in full and final settlement of all claims arising from the breach of warranty;

OR, in the alternative:

☐ Replace the Product with a new, conforming product of equal or greater quality, at no cost to our Client, including delivery, installation, and removal of the defective Product;

☐ Repair the Product so that it fully conforms to all express and implied warranties, at no cost to our Client, and provide an extended warranty of [____] months on the repaired Product;

☐ Refund the full purchase price of $[________], plus incidental and consequential damages of $[________].

IX. CONSEQUENCES OF FAILURE TO RESPOND

If you fail to respond to this demand within thirty (30) days, or fail to provide an adequate remedy, our Client is prepared to pursue all available legal remedies, including but not limited to:

1. Filing suit in the Circuit Court of [________________________________] County, Arkansas, or the appropriate federal court, for breach of express and implied warranties under the Arkansas UCC
2. Filing a Magnuson-Moss Warranty Act claim in federal court (15 U.S.C. § 2310(d)), where the amount in controversy exceeds $50,000 (individual action) or $50 per claimant with 100+ claimants totaling $50,000+ (class action), or in state court regardless of amount
3. Filing an ADTPA claim seeking actual damages, treble damages for willful violations, and attorney's fees
4. Filing a complaint with the Arkansas Attorney General's Consumer Protection Division
5. Seeking recovery of attorney's fees and costs as permitted by statute

This letter is written without prejudice to any and all rights and remedies of our Client, all of which are expressly reserved.

X. PRESERVATION OF EVIDENCE

You are hereby placed on notice to preserve all documents, communications, records, and materials related to the Product, including but not limited to: design specifications, manufacturing records, quality control reports, warranty claims, customer complaints, recall notices, internal memoranda, emails, testing data, and sales records. Destruction or spoliation of evidence may result in adverse inference instructions and sanctions.

Please direct all communications regarding this matter to the undersigned. Do not contact our Client directly.

We look forward to resolving this matter promptly and without the need for litigation.

Respectfully,

[________________________________]

By: _________________________________
[Attorney Name]
Arkansas Bar No. [____________]
[Firm Name]
[Address]
[City], Arkansas [ZIP]
Tel: [____________]
Email: [____________]
Enclosures:
☐ Purchase receipt/invoice
☐ Warranty document
☐ Photographs of defect(s)
☐ Prior correspondence/notices
☐ Repair records/estimates
☐ Expert report (if applicable)
☐ Medical records (if personal injury)

cc: [________________________________] (Client)
cc: [________________________________] (Client's insurance carrier, if applicable)

PRACTICE TIPS

1. Notice Requirement is Critical. Under Ark. Code Ann. § 4-2-607(3)(a), a buyer who accepts goods must notify the seller of any breach within a reasonable time or be barred from any remedy. The Arkansas Supreme Court extended this notice requirement to services contracts as well. See Hardison v. Mack Trucks, Inc., 9 Ark. App. 225 (1983). Send this demand letter by certified mail with return receipt to create an irrefutable record of notice.

2. Alternative B Privity. Arkansas adopted Alternative B of UCC § 2-318, which extends warranty protections to any natural person who may reasonably be expected to use, consume, or be affected by the goods. This is broader than Alternative A (household members and guests only) but narrower than Alternative C (any person injured). Consider whether your client is the direct purchaser or a foreseeable user.

3. Magnuson-Moss Strategy. The Magnuson-Moss Warranty Act provides a powerful tool for consumer goods claims because it: (a) prevents disclaimer of implied warranties when a written warranty exists (15 U.S.C. § 2308(a)); (b) provides for attorney's fees (15 U.S.C. § 2310(d)(2)); and (c) allows filing in state court without amount-in-controversy requirements. Note the informal dispute resolution prerequisite in some cases (15 U.S.C. § 2310(a)(3)).

4. ADTPA Treble Damages. The Arkansas Deceptive Trade Practices Act authorizes the court to award treble damages for knowing or willful violations. Ark. Code Ann. § 4-88-113(f). This significantly increases the value of the claim and provides substantial settlement leverage. However, the Arkansas Supreme Court requires that the plaintiff identify specific deceptive conduct; a simple breach of warranty alone may not suffice for ADTPA liability.

5. Warranty Disclaimer Requirements. Under Ark. Code Ann. § 4-2-316(2), disclaimers of the implied warranty of merchantability must: (a) mention "merchantability," and (b) if in writing, be conspicuous. Disclaimers of fitness for particular purpose must be in writing and conspicuous. Scrutinize any disclaimer carefully for compliance with these technical requirements.

6. Statute of Limitations Calculation. The four-year period under § 4-2-725 generally begins at tender of delivery, not discovery. The "future performance" exception applies only when the warranty "explicitly extends to future performance." Calendar the deadline carefully and file suit well before expiration, as the discovery rule has limited application in warranty cases.

7. Prejudgment Interest. Arkansas allows prejudgment interest at 6% per annum under Ark. Const. Art. 19, § 13. Include this calculation in your demand, as it increases the total recovery and incentivizes early settlement.

8. Failure of Essential Purpose. When the seller's exclusive remedy (typically repair or replacement) fails of its essential purpose under § 4-2-719(2), the full range of UCC remedies becomes available, including consequential damages. Document every failed repair attempt, delay, and refusal to establish that the limited remedy has failed.

SOURCES AND REFERENCES

• Ark. Code Ann. §§ 4-2-313 to 4-2-318 (UCC Article 2 -- Warranties)
• Ark. Code Ann. § 4-2-607(3)(a) (Notice of Breach After Acceptance)
• Ark. Code Ann. §§ 4-2-714, 4-2-715 (Buyer's Damages)
• Ark. Code Ann. § 4-2-719 (Contractual Modification or Limitation of Remedy)
• Ark. Code Ann. § 4-2-725 (Four-Year Statute of Limitations)
• Ark. Code Ann. § 4-86-101 (Breach of Warranty -- Product Liability)
• Ark. Code Ann. §§ 4-88-101 to 4-88-207 (Arkansas Deceptive Trade Practices Act)
• 15 U.S.C. §§ 2301-2312 (Magnuson-Moss Warranty Act)
• 16 C.F.R. Parts 700-703 (FTC Warranty Rules)
• Ark. Const. Art. 19, § 13 (Prejudgment Interest -- 6%)
• Hardison v. Mack Trucks, Inc., 9 Ark. App. 225, 657 S.W.2d 578 (1983)
• Hartness v. Nuckles, 2015 Ark. 444 (2015)