Source: https://supreme.justia.com/cases/federal/us/287/283/
Timestamp: 2019-04-19 18:46:54+00:00

Document:
1. In determining the validity of a legislative declaration that a contract is contrary to public policy, regard is to be had to the general rule that competent persons shall have the utmost liberty of contracting and that it is only where enforcement conflicts with dominant public interests that one who has had the benefit of performance by the other party to a contract will be permitted to avoid his own promise. P. 287 U. S. 288.
2. Upon the sale of a machine for cutting and threshing the buyer's grain in a single operation, there is an implied warranty under the Uniform Sales Act, adopted in North Dakota, that the machine is reasonably fit for that purpose. P. 287 U. S. 288.
3. A North Dakota statute provides that the purchaser of harvesting or threshing machinery for his own use shall have a reasonable time after delivery for inspecting and testing it, and that, if it does not prove to be reasonably fit for the purposes for which it was purchased, he may rescind. It further declares any agreement contrary to its provisions to be against public policy and void, thus preventing waiver of the warranty of fitness. In a case involving the sale of a harvesting and threshing machine it is held, in view of conditions in the state to which the statute was addressed, that it does not violate the due process or the equal protection clause of the Fourteenth Amendment. Pp. 287 U. S. 289-292.
62 N.D. 143, 241 N.W. 722, affirmed.
Appeal from a judgment affirming a judgment against the thresher company, entered upon demurrer to it answer, in a suit against it to cancel promissory notes following the rescission of a contract of sale.
"Sec. 1. Reasonable Time to Discover Defects. Any person, firm, or corporation purchasing any gas or oil burning tractor, gas or steam engine, harvesting or threshing machinery for their own use shall have a reasonable time after delivery for the inspection and testing of the same, and if it does not prove to be reasonably fit for the purpose for which it was purchased, the purchaser may rescind the sale by giving notice within a reasonable time after delivery to the parties from whom any such machinery was purchased, or the agent who negotiated the sale or made delivery of such personal property or his successor, and placing same at the disposal of the seller."
"Sec. 2. Provisions Contrary to Preceding Section Void. Any provision in any written order or contract of sale, or other contract which is contrary to any of the provisions of this Act, is hereby declared to be against public policy and void."
implied, or statutory, and unconditionally promised to pay the price represented by the notes. Plaintiff demurred. The trial court sustained the demurrer, and, defendant having elected to stand on its answer, gave plaintiff judgment in accordance with the prayer of the complaint. The Supreme Court affirmed. 62 N.D. 143, 241 N.W. 722.
On the facts alleged in the complaint, § 15(1) of the Uniform Sales Act, Laws 1917, c. 202, implied a warranty by defendant that the machine was reasonably fit in a single operation to cut and thresh plaintiff's grain. Allis-Chalmers Mfg. Co. v. Frank, 57 N.D. 295, 299, 221 N.W. 75. But it left plaintiff free to waive such warranty and to purchase on the terms referred to in the answer. Section 71. Minneapolis Threshing Mach. Co. v. Hocking, 54 N.D. 559, 569, 209 N.W. 996.
The question is whether the challenged enactment of 1919 may prohibit such waivers as contrary to public policy and void, and so limit the right of seller and purchaser to contract. While that right is a part of the liberty protected by the due process clause, it is subject to such restraints as the state in the exertion of its police power reasonably may put upon it. But freedom of contract is the general rule, and restraint the exception. The exercise of legislative authority to abridge it can be justified only by the existence of exceptional circumstances. Adkins v. Children's Hospital, 261 U. S. 525, 261 U. S. 545-546, and cases cited. In determining the validity of a legislative declaration that a contract is contrary to public policy, regard is to be had to the general rule that competent persons shall have the utmost liberty of contracting, and that it is only where enforcement conflicts with dominant public interests that one who has had the benefit of performance by the other party to a contract will be permitted to avoid his own promise. Cf. Steele v. Drummond, 275 U. S. 199, 275 U. S. 205; Twin City Pipe Line Co. v. Harding Glass Co., 283 U. S. 353, 283 U. S. 356.
dew, and humidity. Such combines have not been long known or much used in the grain-raising Northwest, and undoubtedly there are ample grounds for a legislative finding that the farmers of North Dakota as a class are not sufficiently familiar with them to be able, without actual test, to form an intelligent opinion as to their fitness to cut and thresh in a single operation or whether they safely may be regarded as dependable for use on their farms. If they were relied on generally in that state and should fail in the fields, the resulting losses would be of such magnitude and public concern as to warrant the adoption of measures calculated to guard against them.
U.S. 402. The state, in order to ameliorate the evils found incident to waivers of implied warranties of fitness, merely declares that such agreements in respect of the sale of the designated machines are contrary to public policy, and holds the parties to the just and reasonable rule prescribed by § 15(1) of the Sales Act. Upon the question of due process, more need not be said.
The character of the machines, the need of tests to determine their fitness, the serious losses that ensue if, in actual use, they prove unfit, and the other considerations alluded to plainly warrant the classification and special regulation of sales prescribed by the statute.
We find no substantial support for the contention that the statute complained of violates the due process or equal protection clause of the Fourteenth Amendment. Frisbie v. United states, 157 U. S. 160, 157 U. S. 165; Orient Insurance Co. v. Daggs, 172 U. S. 557, 172 U. S. 563, et seq.; Patterson v. Bark Eudora, 190 U. S. 169, 190 U. S. 173; Whitfield v. Aetna Life Ins. Co., 205 U. S. 489, 205 U. S. 495; Chicago, B. & Quincy R. Co. v. McGuire, 219 U. S. 549, 219 U. S. 564, et seq.; National Union Fire Ins. Co. v. Wanberg, 260 U. S. 71.

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