Warranty Claims Against a Product Lessor - a Rental Company

The Hawaii Supreme Court has made it clear that warranty claims against a lessor stand along with the claims for strict product liability. Indeed, this has been specifically recognized by the Hawaii Court of Appeals in the case of Torres v. Northwest Engineering Co., 86 Haw. 383, 949 P.2d 1004 (Haw.App. 1997). As stated in the Torres case:

"The Hawai'i Supreme Court has stated that 'where a plaintiff seeks to recover for personal injury in warranty the elements of the action should be governed by the same policies which presently shape the elements of a tort strict products liability claim.' Larsen v. Pacesetter Systems, Inc., 74 Haw. 1, 22, 837 P.2d 1273, 1284 (1992). The reason for applying the elements for tort strict products liability is that 'the tort action for strict products liability is the warranty action for tangible injury to persons and property stripped of its contractual mask.' Id. at 22, 837 P.2d at 1284. Under the doctrine of strict products liability as adopted in this jurisdiction, where a seller or lessor, who is engaged in the business of selling or leasing a product, sells or leases a defective product which is dangerous to the user or consumer, and injury results from its use or consumption, the seller or lessor will be held strictly liable in tort for the injury." 86 Haw. at 398, 949 P.2d at 1019. [emphasis added]

Many jurisdictions have developed the law of warranties applicable to leases through case law. Hawaii is no longer one of those jurisdictions. HRS Chapter 490:2A "The Uniform Commercial Code - Leases" sets forth the law of warranties pertaining to leases for the State of Hawaii by statute.

HRS § 490:2A-103 defines various terms related to lease agreements. Some of those definitions include:

"(10) 'Lease' means a transfer of the right to possession and use of goods for a term in return for consideration, but a sale, including a sale on approval or a sale or return, or retention or creation of a security interest is not a lease. Unless the context clearly indicates otherwise, the term includes a sublease.

"(14) 'Lessee' means a person who acquires the right to possession and use of goods under a lease. Unless the context clearly indicates otherwise, the term includes a sublessee.

"(16) 'Lessor' means a person who transfers the right to possession and use of goods under a lease. Unless the context clearly indicates otherwise, the term includes a sublessor.

"(20) 'Merchant lessee' means a lessee that is a merchant with respect to goods of the kind subject to the lease."

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