Advertising and "Pass-Through" Warranties Under Revised Article 2

Abstract

In contemporary markets the mass distribution of goods most often occurs through intermediaries. Moving from the manufacturer to the ultimate buyers, products will pass through the hands of one or more intermediaries variously called wholesalers, distributors, dealers or retailers. For convenience we will refer to these various intermediaries by the general term "dealers." This distribution process requires a chain of sales contracts. A sale is, by nature, "the passing of title from the seller to the buyer for a price."1 The chain of distribution is the chain of title of goods. To take the simplest, two-step case, a car manufacturer may sell a new vehicle to the retail car dealer that, in turn, may sell the vehicle to the ultimate buyer. The two separate contracts of sale are between the manufacturer and the dealer and the dealer and the ultimate buyer. In this, and in more complicated distributional schemes involving multiple intermediaries, the manufacturers and the ultimate buyers are not as a matter of form parties to the same contract. Their names do not appear together on the same contract document as parties assenting to the bargain. They do not sign the same written sales agreement. Thus, it is customary to say that the manufacturer and the ultimate buyer are contractually remote, that the somewhat strange thing we call "privity of contract" does not exist between them.