CO Code § 4-2-318 (2021)
2021 Colorado Code|Title 4 - Uniform Commercial Code|Article 2 - Sales|Part 3 - General Obligation and Construction of Contract|§ 4-2-318. Third Party Beneficiaries of Warranties Express or Implied

 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 by breach of the warranty. A seller may not exclude or limit the operation of this section.   History. Source: L. 65: P. 1312, § 1. C.R.S. 1963: § 155-2-318. History. Source: L. 65: P. 1312, § 1. C.R.S. 1963: § 155-2-318.    Editor's note - Colorado legislative change: Colorado changed “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” to read “person who may reasonably be expected to”.   OFFICIAL COMMENT   Prior Uniform Statutory Provision: None.   Purposes:   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 Sections 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].   Cross References:   Point 1: Sections 4-2-316 , 4-2-718 and 4-2-719 .   Point 2: Section 4-2-314 .   Definitional Cross References:   “Buyer”. Section 4-2-103 .   “Goods”. Section 4-2-105 .   “Seller”. Section 4-2-103 .   COLORADO COMMENT   This section, as amended by Colorado, extends to any person reasonably expected to use, consume, or be affected by goods the same warranty which the buyer received in the contract of sale, thereby freeing any such beneficiaries from any technical rules as to “privity”. The Colorado change enlarges the potential liability of a seller by extending the warranty to other persons in the distributive chain. This section 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.   ANNOTATION   The general assembly has expanded the class of persons protected by express and implied warranties beyond that set forth in the original uniform code. Prutch v. Ford Motor Co., 40 Colo. App. 129, 574 P.2d 102 , rev'd on other grounds, 618 P.2d 657 (Colo. 1980).   Privity is not required in warranty actions. Pust v. Union Supply Co., 38 Colo. App. 435, 561 P.2d 355 (1976), rev'd sub nom. Holly Sugar Corp. v. Union Supply Co., 194 Colo. 316 , 572 P.2d 148 (1977)party indemnification issue, and aff'd, 196 Colo. 162 , 583 P.2d 276 (1978).   Properly executed limitations of warranties or available remedies are equally applicable to anyone that would be a beneficiary of a seller's warranty. Wenner Petro. v. Mitsui Co., 748 P.2d 356 (Colo. App. 1987).   There is no indication that the general assembly intended to include arbitration as a limitation which could be imposed on remote purchasers through the operation of this section. Recold, S.A. De C.V. v. Monfort of Colo., Inc., 893 F.2d 195 (8th Cir. 1990).   Lessee as beneficiary. Although a lessee of a machine does not directly receive the benefits of the warranties made by the seller to the lessor, the lessee may be a third party beneficiary of such warranties who could “reasonably be expected to use, consume, or be affected by the goods”. Lease Fin., Inc. v. Burger, 40 Colo. App. 107, 575 P.2d 857 (1977).   Warranties provided by the uniform commercial code are not the exclusive means of recovery without a showing of negligence or fault. Larson v. Clark Equip. Co., 33 Colo. App. 277, 518 P.2d 308 (1974).   Judicial adoption of strict liability in tort not precluded. The legislative adoption of the UCC warranties without a privity requirement did not preclude the judicial adoption of strict liability in tort. Larson v. Clark Equip. Co., 33 Colo. App. 277, 518 P.2d 308 (1974).   For discussion of the distinction between liability in contract for breach of warranty and strict tort liability for product misrepresentation, see Am. Safety Equip. Corp. v. Winkler, 640 P.2d 216 (Colo. 1982).   Applied in Hansen v. Mercy Hosp., 40 Colo. App. 17, 570 P.2d 1309 (1977).