Breach of Warranty Demand Letter - Arizona

DEMAND LETTER - BREACH OF WARRANTY

State of Arizona

[________________________________]
Attorneys at Law
[________________________________]
[________________________________], Arizona [____]
Telephone: [________________________________]
Facsimile: [________________________________]
Email: [________________________________]
State Bar of Arizona No. [________________________________]

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

[__/__/____]

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

Re: FORMAL DEMAND - BREACH OF EXPRESS AND IMPLIED WARRANTIES
Our Client: [________________________________]
Product/Goods: [________________________________]
Purchase Date: [__/__/____]
Invoice/Order No.: [________________________________]
Demand Amount: $[________________________________]

Dear [________________________________]:

This firm represents [________________________________] ("our Client") regarding the above-referenced product or goods (the "Product") purchased from [________________________________] ("you" or "Seller") on or about [__/__/____]. The Product has failed to conform to express and implied warranties under the Arizona Uniform Commercial Code (A.R.S. Title 47, Article 2) and, where applicable, the federal Magnuson-Moss Warranty Act (15 U.S.C. § 2301 et seq.).

UNDER A.R.S. § 12-341.01, THE PREVAILING PARTY IN ANY CONTESTED ACTION ARISING OUT OF A CONTRACT, EXPRESS OR IMPLIED, IS ENTITLED TO REASONABLE ATTORNEY FEES. ADDITIONALLY, THE ARIZONA CONSTITUTION, ARTICLE 2, SECTION 31, PROHIBITS CAPS ON DAMAGES. YOUR FAILURE TO RESOLVE THIS MATTER WILL RESULT IN SUBSTANTIAL ADDITIONAL LIABILITY.

I. THE TRANSACTION

On or about [__/__/____], our Client purchased the following from you:

Place of Purchase: [________________________________]
Method of Payment: [________________________________]
Delivery Date: [__/__/____]

II. WARRANTIES UNDER ARIZONA LAW

A. Express Warranties - A.R.S. § 47-2313

Under A.R.S. § 47-2313, express warranties by the seller are created as follows: (a) any affirmation of fact or promise made by the seller to the buyer which 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; (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.

You made the following express warranties:

☐ Affirmation of Fact/Promise: "[________________________________]"
- Made on: [__/__/____]
- Made by: [________________________________] (name and title)
- Method: ☐ Written ☐ Oral ☐ Advertising ☐ Packaging/Label

☐ Product Description: "[________________________________]"
- Found in: ☐ Contract ☐ Catalog ☐ Website ☐ Packaging ☐ Other: [____]

☐ Sample or Model: [________________________________]
- Provided on: [__/__/____]

☐ Written Warranty Document: [________________________________]
- Warranty Period: [________________________________]
- Warranty Terms: [________________________________]

B. Implied Warranty of Merchantability - A.R.S. § 47-2314

Under A.R.S. § 47-2314, a warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind. You are a merchant dealing in goods of this type. To be merchantable, goods must at minimum: (a) pass without objection in the trade under the contract description; (b) in the case of fungible goods, be of fair average quality within the description; (c) be fit for the ordinary purposes for which such goods are used; (d) run, within the variations permitted by the agreement, of even kind, quality, and quantity within each unit and among all units involved; (e) be adequately contained, packaged, and labeled; and (f) conform to the promises or affirmations of fact made on the container or label.

The Product fails to be merchantable because:

☐ The Product is not fit for its ordinary purpose of [________________________________]
☐ The Product does not pass without objection in the trade because [________________________________]
☐ The Product does not conform to packaging/label representations because [________________________________]
☐ Other: [________________________________]

C. Implied Warranty of Fitness for Particular Purpose - A.R.S. § 47-2315

☐ Check if applicable: Under A.R.S. § 47-2315, 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.

Particular Purpose: [________________________________]
Seller's Knowledge: [________________________________]
Buyer's Reliance: [________________________________]
How the Product Failed This Purpose: [________________________________]

D. Warranty Disclaimer Analysis - A.R.S. § 47-2316

☐ No disclaimer present - implied warranties remain fully in effect.
☐ Disclaimer present but ineffective because: [________________________________]
- Under A.R.S. § 47-2316(2), exclusion of the implied warranty of merchantability must mention "merchantability" and, if in writing, must be conspicuous.
- Under A.R.S. § 47-2316(2), exclusion of fitness must be in writing and conspicuous.
- Under the Magnuson-Moss Act, a supplier providing a written warranty on a consumer product cannot disclaim implied warranties.

III. PRIVITY AND THIRD-PARTY BENEFICIARIES

Arizona has adopted Alternative A of UCC § 2-318 (A.R.S. § 47-2318), which extends the seller's warranty (express or implied) to any natural person who is in the family or household of the buyer or who is a guest in the home, if it is reasonable to expect that such person may use, consume, or be affected by the goods and who is injured in person by breach of the warranty.

☐ Our Client is the direct purchaser (privity exists).
☐ Our Client is a third-party beneficiary under A.R.S. § 47-2318.

IV. NOTICE OF BREACH AND OPPORTUNITY TO CURE

A. Defects and Nonconformities

The Product suffers from the following defects and/or nonconformities:

☐ Defect #1: [________________________________]
- Date discovered: [__/__/____]
- Description: [________________________________]
- Impact: [________________________________]

☐ Defect #2: [________________________________]
- Date discovered: [__/__/____]
- Description: [________________________________]
- Impact: [________________________________]

☐ Additional Defects: [________________________________]

B. Prior Notice

Under A.R.S. § 47-2607(3)(a), a buyer must notify the seller of breach within a reasonable time after the buyer discovers or should have discovered any breach or be barred from any remedy.

Our Client provided timely notice as follows:

C. Seller's Failure to Cure

Despite notice, you have failed to cure the breach. Specifically:

☐ You refused to repair or replace the Product
☐ Your attempted repair was inadequate because [________________________________]
☐ You failed to respond to our Client's notice
☐ The time for cure under the warranty has expired without adequate remedy
☐ Other: [________________________________]

V. REMEDIES ELECTED

Under the Arizona UCC, our Client elects the following remedies:

☐ Acceptance and damages under A.R.S. § 47-2714 (damages for breach of warranty regarding accepted goods)
☐ Rejection of nonconforming goods under A.R.S. § 47-2601
☐ Revocation of acceptance under A.R.S. § 47-2608 (where nonconformity substantially impairs value and acceptance was on reasonable assumption defect would be cured, or buyer did not discover nonconformity due to difficulty of discovery or seller's assurances)
☐ Cover under A.R.S. § 47-2712 (purchase of substitute goods)

VI. DAMAGES

A. Direct Warranty Damages - A.R.S. § 47-2714

Under A.R.S. § 47-2714(2), 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.

B. Incidental Damages - A.R.S. § 47-2715(1)

Incidental damages resulting from the seller's breach include expenses reasonably incurred in inspection, receipt, transportation and care and custody of goods rightfully rejected, any commercially reasonable charges, expenses or commissions in connection with effecting cover, and any other reasonable expense incident to the delay or other breach.

C. Consequential Damages - A.R.S. § 47-2715(2)

Consequential damages resulting from the seller's breach 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.

D. Prejudgment Interest

Under A.R.S. § 44-1201, prejudgment interest accrues at ten percent (10%) per annum.

E. Attorney Fees

Under A.R.S. § 12-341.01(A), the prevailing party in a contract action (express or implied) may recover reasonable attorney fees. Warranty claims arise out of contract and qualify for fee shifting.

Additionally, under the Magnuson-Moss Warranty Act (15 U.S.C. § 2310(d)(2)), a consumer who prevails may recover reasonable attorney fees and costs.

F. Total Demand Summary

VII. MAGNUSON-MOSS WARRANTY ACT (If Applicable to Consumer Products)

☐ Check if applicable: If the Product is a "consumer product" as defined by 15 U.S.C. § 2301(1), and you provided a "written warranty" as defined by 15 U.S.C. § 2301(6), the Magnuson-Moss Warranty Act provides additional protections:

• Full warranty (15 U.S.C. § 2304): The warrantor must remedy the defect within a reasonable time without charge. After a reasonable number of repair attempts, the consumer may elect a refund or replacement.
• Limited warranty (15 U.S.C. § 2303): Must be clearly and conspicuously designated as a "limited warranty."
• No disclaimer of implied warranties (15 U.S.C. § 2308): A supplier who provides a written warranty cannot disclaim or modify implied warranties, though the implied warranty duration may be limited to the duration of the written warranty if reasonable and conspicuous.
• Attorney fees (15 U.S.C. § 2310(d)(2)): A prevailing consumer may recover costs and reasonable attorney fees.
• Federal jurisdiction available where amount in controversy exceeds $50,000 and 100+ named plaintiffs, or state court jurisdiction for individual claims.

VIII. STATUTE OF LIMITATIONS

Under A.R.S. § 47-2725, a cause of action for breach of warranty 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.

The statute of limitations is four (4) years from tender of delivery.

• Date of delivery: [__/__/____]
• Limitations period expires: [__/__/____]
• This claim is timely.

IX. DEMAND

Within thirty (30) calendar days of your receipt of this letter, you must:

☐ Option 1: Pay $[________________________________] in full settlement of all warranty claims, including compensatory, incidental, and consequential damages.

☐ Option 2: Replace the Product with a conforming product of equal or greater value AND pay $[________________________________] for incidental and consequential damages incurred.

☐ Option 3: Repair the Product at your sole expense to conform to all express and implied warranties AND pay $[________________________________] for incidental and consequential damages incurred.

Payment shall be made by certified check or wire transfer payable to [________________________________] and delivered to:

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

X. CONSEQUENCES OF NON-COMPLIANCE

Failure to comply within the time specified will result in:

1. Filing suit in [________________________________] County Superior Court (or the United States District Court for the District of Arizona) seeking all available damages;
2. Recovery of attorney fees under both A.R.S. § 12-341.01 and the Magnuson-Moss Warranty Act;
3. Prejudgment interest at 10% per annum under A.R.S. § 44-1201;
4. All incidental and consequential damages under A.R.S. §§ 47-2715;
5. Consumer fraud remedies under A.R.S. § 44-1521 et seq. if applicable; and
6. All other remedies available at law or in equity.

XI. DOCUMENT PRESERVATION NOTICE

You must immediately preserve all documents related to this matter, including warranty documents, inspection reports, quality control records, customer complaints, internal communications regarding the Product, and all correspondence with our Client. Failure to preserve evidence may result in spoliation sanctions.

XII. RESERVATION OF RIGHTS

This letter does not waive any rights, claims, or remedies available to our Client. All rights are expressly reserved.

Govern yourself accordingly.

Very truly yours,

[________________________________]

By: _______________________________
[________________________________]
State Bar of Arizona No. [________________________________]
Telephone: [________________________________]
Email: [________________________________]

Enclosures:
☐ Exhibit A - Purchase Receipt / Invoice
☐ Exhibit B - Warranty Document(s)
☐ Exhibit C - Defect Documentation (photos, inspection reports)
☐ Exhibit D - Prior Notice Correspondence
☐ Exhibit E - Repair Records / Attempts
☐ Exhibit F - Damage Calculations

cc: [________________________________] (Client)

Sources and References

• A.R.S. § 47-2313 - Express warranties by affirmation, promise, description, sample
• A.R.S. § 47-2314 - Implied warranty: merchantability; usage of trade
• A.R.S. § 47-2315 - Implied warranty: fitness for particular purpose
• A.R.S. § 47-2316 - Exclusion or modification of warranties
• A.R.S. § 47-2318 - Third-party beneficiaries (Alternative A)
• A.R.S. § 47-2607 - Buyer's notice of breach
• A.R.S. § 47-2714 - Buyer's damages for breach regarding accepted goods
• A.R.S. § 47-2715 - Buyer's incidental and consequential damages
• A.R.S. § 47-2725 - Statute of limitations (four years)
• A.R.S. § 44-1201 - Legal interest rate (10% per annum)
• A.R.S. § 12-341.01 - Attorney fees in contract actions
• 15 U.S.C. § 2301 et seq. - Magnuson-Moss Warranty Act
• 15 U.S.C. § 2310(d)(2) - Attorney fees for prevailing consumer