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Legal Memorandum: Third-party Beneficiary of a Warranty

Issue: Whether a person could be considered a third-party beneficiary of a warranty under Virgin Islands law.

Area of Law: UCC & Secured Transactions
Keywords: Third-party beneficiary; A seller's warranty; Privity requirement
Jurisdiction: Virgin Islands
Cited Cases: 893 F.2d 195; 358 N.W.2d 233; 91 F.3d 242; 331 F. Supp. 960
Cited Statutes: 11A V.I.C. § 2-318; UCC § 2-318
Date: 12/01/2006

  Virgin Islands has adopted the section of the UCC applicable to determining whether a third party may recover on an express or implied warranty. 

A seller’s warranty whether express or implied extends to any person who may reasonably be expected to 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 with respect to injury to the person of an individual to whom the warranty extends, but an exclusion, modification, or limitation of the warranty, including any with respect to rights and remedies, effective against the buyer is also effective against the beneficiary designated under this section.

 

11A V.I.C. § 2-318.  Unfortunately, no Virgin Islands law construing this section was located.  However, law of other jurisdictions, including law from Virgin Islands sister jurisdictions in the Third Circuit, is instructive.

Cundy v. Int’l Trencher Serv., Inc., 358 N.W.2d 233, 240 (S.D. 1984).  In other words, under UCC § 2-318, the seller’s warranty extends to third persons.  Id. at 240.  Under the version of UCC § 2-318 adopted in Maine, almost identical to that adopted in the Virgin Islands, suits by a “person whom the manufacturer, seller or supplier might reasonably have expected to use, consume or be affected by the goods,” 11A V.I.C. § 2-318, are allowed against a remote seller such as CCP, Sullivan v. Young Bros. & […]

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