What provision in a purchase agreement covers the cost of repairs resulting from faulty design or manufacturing?

Prepare for the CMA General and Administrative Exam. Use flashcards and multiple-choice questions complete with hints and explanations. Boost your readiness and confidence for the exam!

A warranty in a purchase agreement serves as a promise or guarantee from the seller regarding the condition of the product, including its quality and performance. This provision typically covers repair costs associated with defects in design or manufacturing. For instance, if a product fails to operate as intended due to a fault in design or manufacturing, the warranty obligates the seller to repair or replace the defective item at no additional cost to the buyer. This assurance not only protects the buyer from unforeseen expenses due to faulty products but also establishes the seller's accountability for ensuring their product meets specified quality standards.

In contrast, an indemnity clause relates to the obligation of one party to compensate another for certain losses or damages, which does not directly concern product defects or repairs. Limitation of liability clauses restrict the extent to which one party can be held liable for damages, which is more about capping potential liabilities rather than providing for repairs. Lastly, force majeure refers to unforeseen circumstances that prevent a party from fulfilling a contract, such as natural disasters, but does not address the accountability for product repairs. Thus, a warranty distinctly outlines the costs of repairs stemming from design or manufacturing faults, reinforcing the buyer's rights and the seller's responsibilities.

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