2018 New Mexico Statutes
Chapter 55 - Uniform Commercial Code
Article 2 - Sales
Section 55-2-318 - Third-party beneficiaries of warranties express or implied.

A seller's warranty whether express or implied extends to any natural person who is in the family or household of his buyer or who is a guest in his 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. A seller may not exclude or limit the operation of this section.

History: 1953 Comp., § 50A-2-318, enacted by Laws 1961, ch. 96, § 2-318.

OFFICIAL COMMENTS

UCC Official Comments by ALI & the NCCUSL. Reproduced with permission of the PEB for the UCC. All rights reserved.

Prior uniform statutory provision. — None.

1. The last sentence of this section does not mean that a seller is precluded from excluding or disclaiming a warranty which might otherwise arise in connection with the sale provided such exclusion or modification is permitted by Section 2-316. Nor does that sentence preclude the seller from limiting the remedies of his own buyer and of any beneficiaries, in any manner provided in Section 2-718 or 2-719. To the extent that the contract of sale contains provisions under which warranties are excluded or modified, or remedies for breach are limited, such provisions are equally operative against beneficiaries of warranties under this section. What this last sentence forbids is exclusion of liability by the seller to the persons to whom the warranties which he has made to his buyer would extend under this section.

2. The purpose of this section is to give certain beneficiaries the benefit of the same warranty which the buyer received in the contract of sale, thereby freeing any such beneficiaries from any technical rules as to "privity." It seeks to accomplish this purpose without any derogation of any right or remedy resting on negligence. It rests primarily upon the merchant-seller's warranty under this article that the goods sold are merchantable and fit for the ordinary purposes for which such goods are used rather than the warranty of fitness for a particular purpose. Implicit in the section is that any beneficiary of a warranty may bring a direct action for breach of warranty against the seller whose warranty extends to him [As amended in 1966].

3. The first alternative expressly includes as beneficiaries within its provisions the family, household and guests of the purchaser. Beyond this, the section in this form is neutral and is not intended to enlarge or restrict the developing case law on whether the seller's warranties, given to his buyer who resells, extend to other persons in the distributive chain. The second alternative is designed for states where the case law has already developed further and for those that desire to expand the class of beneficiaries. The third alternative goes further, following the trend of modern decisions as indicated by Restatement of Torts 2d § 402A (Tentative Draft No. 10, 1965) in extending the rule beyond injuries to the person [As amended in 1966].

Point 1: Sections 2-316, 2-718 and 2-719.

Point 2: Section 2-314.

"Buyer". Section 2-103.

"Goods". Section 2-105.

"Seller". Section 2-103.

Compiler's notes. — New Mexico adopted Alternative A of 2-318 of the 1972 Official Text of the UCC.

Privity of contract not required. — A defendant may be held liable for breach of implied warranty of merchantability under the UCC without regard to privity of contract. Perfetti v. McGhan Med., 1983-NMCA-032, 99 N.M. 645, 662 P.2d 646, cert. denied, 99 N.M. 644, 662 P.2d 645.

This section only addresses horizontal privity, leaving vertical privity to judicial decision. Armijo v. Ed Black's Chevrolet Center, Inc., 1987-NMCA-014, 105 N.M. 422, 733 P.2d 870.

Employees of a purchaser are excluded from the manufacturer's warranty protections offered by provisions comparable to this section. Armijo v. Ed Black's Chevrolet Center, Inc., 1987-NMCA-014, 105 N.M. 422, 733 P.2d 870.

Law reviews. — For article, "New Mexico's 'Lemon Law': Consumer Protection or Consumer Frustration?", see 16 N.M.L. Rev. 251 (1986).

For annual survey of New Mexico law of products liability, 19 N.M.L. Rev. 743 (1990).

Am. Jur. 2d, A.L.R. and C.J.S. references. — 63 Am. Jur. 2d Products Liability § 450 et seq.; 67 Am. Jur. 2d Sales §§ 706 to 722.

Manufacturer's responsibility for defective component supplied by another and incorporated in product, 3 A.L.R.3d 1016.

Privity of contract as essential in action against remote manufacturer or distributor for defects in goods not causing injury to person or to other property, 16 A.L.R.3d 683.

In personam jurisdiction over nonresidential manufacturer or seller under "long-arm" statutes, 19 A.L.R.3d 13.

Discovery, in products liability case, of defendant's knowledge as to injury to or complaints by others than plaintiff, related to product, 20 A.L.R.3d 1430.

Right of manufacturer or seller to contribution or indemnity from user of product causing injury or damage to third person, and vice versa, 28 A.L.R.3d 943.

Extension of strict liability in tort to permit recovery by a third person who was neither a purchaser nor user of product, 33 A.L.R.3d 415.

Necessity and sufficiency of identification of defendant as manufacturer or seller of product alleged to have caused injury, 51 A.L.R.3d 1344.

Necessity and propriety of instructing on alternative theories of negligence or breach of warranty, where instruction on strict liability in tort is given in products liability case, 52 A.L.R.3d 101.

Application of strict liability in tort doctrine to lessor of personal property, 52 A.L.R.3d 121.

Product as unreasonably dangerous or unsafe under doctrine of strict liability in tort, 54 A.L.R.3d 352.

Elements and measure of damages for breach of warranty in sale of horse, 91 A.L.R.3d 419.

Third-party beneficiaries of warranties under UCC § 2-318, 100 A.L.R.3d 743.

Pre-emption of strict liability in tort by provisions of UCC Article 2, 15 A.L.R.4th 791.

Products liability: general recreational equipment, 77 A.L.R.4th 1121.

Third-party beneficiaries of warranties under UCC § 2-318, 50 A.L.R.5th 327.

Admiralty products liability: recovery against remote manufacturer or distributor for economic or commercial loss caused by defect in product, 81 A.L.R. Fed. 181.

77A C.J.S. Sales § 240 et seq.