(1) Subject to subsection (2) of this section, there is in a contract for sale a warranty by the seller that:
(a) The title conveyed shall be good, and its transfer rightful; and
(b) The goods shall be delivered free from any security interest or other lien or encumbrance of which the buyer at the time of contracting has no knowledge.
(2) A warranty under subsection (1) of this section will be excluded or modified only by specific language or by circumstances which give the buyer reason to know that the person selling does not claim title in himself or that he is purporting to sell only such right or title as he or a third person may have.
(3) Unless otherwise agreed, a seller who is a merchant regularly dealing in goods of the kind warrants that the goods shall be delivered free of the rightful claim of any third person by way of infringement or the like, but a buyer who furnishes specifications to the seller must hold the seller harmless against any such claim which arises out of compliance with the specifications.
Source: L. 65: p. 1309, § 1. C.R.S. 1963: § 155-2-312.
ANNOTATION
Law reviews. For article, "One Year Review of Contracts", see 38 Dicta 161 (1961).
Annotator's note. Since § 4-2-312 is similar to repealed § 121-1-13, CRS 53, and CSA, C. 143A, § 13 (uniform sales act), relevant cases construing those provisions have been included in the annotations to this section.
This section deals with implied warranties of titles. Koscove v. Brunger, 143 Colo. 354, 352 P.2d 961 (1960).
Purchaser may rescind entire transaction although portion has been disposed of. Where a seller of chattels is guilty of a breach of an implied warranty of title and the purchaser relying upon such warranty has sold or disposed of a minor portion of the chattels, the purchaser, upon learning of the defect of title, may elect to rescind the entire transaction. Koscove v. Brunger, 143 Colo. 354, 352 P.2d 961 (1960).
Contractual language announcing that a good is sold "as is" without any expressed or implied warranties is not sufficient to exclude a warranty of title imposed by this section. Hagerty Ins. Agency v. Luxury Asset Capital, 2023 COA 57, 536 P.3d 346.
Where one buys produce from a tenant farmer without determining landlord's lien upon such, he does so at his peril. Peterson & Co. v. Novinger, 121 Colo. 171, 214 P.2d 373 (1950).