Case Name: VIOLA GLADDEN, PLAINTIFF-RESPONDENT, v. CADILLAC MOTOR CAR DIVISION, GENERAL MOTORS CORPORATION, A CORPORATION LICENSED TO DO BUSINESS IN THE STATE OF NEW JERSEY, DEFENDANT, AND UNIROYAL, INC., DEFENDANT-APPELLANT, AND LEX DEPP CADILLAC, DEFENDANT
Court: Supreme Court of New Jersey
Jurisdiction: New Jersey
Decision Date: 1980-06-30
Citations: 83 N.J. 320
Docket Number: 
Parties: VIOLA GLADDEN, PLAINTIFF-RESPONDENT, v. CADILLAC MOTOR CAR DIVISION, GENERAL MOTORS CORPORATION, A CORPORATION LICENSED TO DO BUSINESS IN THE STATE OF NEW JERSEY, DEFENDANT, AND UNIROYAL, INC., DEFENDANT-APPELLANT, AND LEX DEPP CADILLAC, DEFENDANT.
Judges: 
Reporter: New Jersey Reports
Volume: 83
Pages: 320–349

Head Matter:
VIOLA GLADDEN, PLAINTIFF-RESPONDENT, v. CADILLAC MOTOR CAR DIVISION, GENERAL MOTORS CORPORATION, A CORPORATION LICENSED TO DO BUSINESS IN THE STATE OF NEW JERSEY, DEFENDANT, AND UNIROYAL, INC., DEFENDANT-APPELLANT, AND LEX DEPP CADILLAC, DEFENDANT.
Argued November 27, 1979
Decided June 30, 1980.
David L. Menzel argued the cause for appellant (Stryker, Tams & Dill, attorneys).
Daniel R. Coburn argued the cause for respondent (Coburn & Bronstein, attorneys).

Opinion:
The opinion of the Court was delivered by
HANDLER, J.
Plaintiff seeks to recover from Uniroyal, Inc. (hereinafter "Uniroyal"), a national automobile tire manufacturer, property damages for the total loss of her automobile based upon breach of express warranty covering the automobile's tires. Plaintiff claimed that the right rear tire failed while the car was being driven by her brother, causing the car to leave the road and strike a guardrail and tree. Uniroyal disputed that the tire's failure under the circumstances constituted a breach of its warranty. It also asserted that, in any event, its liability for such a warranty breach was limited to a refund for or replacement of that tire. On the authority of Collins v. Uniroyal, Inc., 64 N.J. 260 (1974), the trial court ruled that this limitation of liability was ineffective. It is this ruling, sustained by the Appellate Division, which is the focus of this appeal.
I
Plaintiff Viola Gladden was the owner of a 1974 Coupe de Ville hardtop Cadillac automobile. Her younger brother, Larry Brown, was driving the automobile from South Carolina to Morristown, New Jersey and, on September 1, 1975, while traveling easterly on Route 22 near Harrisburg, Pennsylvania, the automobile left the roadway and struck a guardrail and tree. As the car left the road, both Brown and his passenger heard a "big pop" or "pow-like" noise; the right rear tire was later discovered about two feet from the scene of the accident.
Plaintiff bought the new automobile for her brother in July 1974, although Brown handled the actual purchase. Brown testified that he had thought that he was getting a "top-notch car" which should have the "better tires" and he therefore requested "steel-belted radials." He further testified that steel-belted radial tires were advertised on television and in newspapers and although he did not request any particular brand of tires, he was sold Uniroyal tires. Distributed with the tires was a booklet described in large letters on the front cover as "OWNER'S GUIDE AND GUARANTEE," which contained a section in bold, red printing encaptioned "UNIROYAL STEEL BELTED RADIAL TIRE GUARANTEE." Brown testified that he had "skimmed through" the guarantee booklet and that he had thought that he understood its contents.
Seeking only property damages for the loss of the automobile, plaintiff brought a lawsuit against the Cadillac Motor Car Division of General Motors Corporation, Lex Depp Cadillac, and Uniroyal, Inc. Summary judgment for defendant Lex Depp Cadillac was granted prior to trial. The cause of action against Cadillac Motor Car Division was dismissed upon plaintiff's failure to establish a prima facie case.
At trial, plaintiff's theory of liability against Uniroyal was predicated upon her expert's claim that the automobile had gone out of control and had left the road after the right rear tire blew out either because of some factor relating to the road, or because of a defect in the manufacturing, the mounting, or dismounting of the tire. The defendant and its expert contended that, after the automobile had left the roadway, the tire failed when the vehicle struck the guardrail and tree. The case was sent to the jury on theories of strict liability, implied warranty, and express warranty. Answering special interrogatories, the jury found that the tire was not defective but, that Uniroyal had, nevertheless, breached its express warranty. Uniroyal's motion for a judgment notwithstanding the verdict was denied and the jury award of $6,250 plus interest for property damage to plaintiff's car was entered.
On appeal, Uniroyal contended that the evidence of a breach of warranty was inadequate and that the trial court had erred in submitting this issue to the jury. It also asserted that its guarantee did not constitute a promise that the tires would not fail but only a promise that, if there were a tire failure, the tire would be replaced or the purchase price would be refunded on an apportioned basis. For that reason, Uniroyal contended that the trial court had erred in ruling that the guarantee, which restricted its liability as to damages, was unconscionable and, thus, unenforceable.
The Appellate Division in an unreported decision reversed on the ground that the trial court had given an incorrect or inadequate instruction to the jury on the express warranty question. It concluded that a new trial should have been granted. The appellate court, however, rejected Uniroyal's contentions with respect to the validity of the remedy restrictions of the guarantee. Uniroyal's petition for certification, granted at 81 N.J. 285 (1979), sought review only of the question of the validity of the remedy restriction which appears in the warranty-
II
The initial question is whether Uniroyal's undertaking constituted an express warranty. The Uniform Commercial Code (hereinafter the "UCC" or "Code"), N.J.S.A. 12A:1-101 et seq., deals with the creation of warranties. It provides as follows:
(1) Express warranties by the seller are created as follows:
(a) Any affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes part of the basis of the bargain creates an express warranty that the goods shall conform to the affirmation or promise.
(2) It is not necessary to the creation of an express warranty that the seller use formal words such as "warrant" or "guarantee" or that he have a specific intention to make a warranty, but an affirmation merely of the value of the goods or a statement purporting to be merely the seller's opinion or commendation of the goods does not create a warranty. [N.J.S.A. 12A:2-313J
The UCC Comments to this section emphasize that no specific intention to make a warranty is necessary if part of the basis of the bargain consists of. the seller's affirmations of fact or descriptions of the goods. N.J.S.A. 12A:2-313, Comment 3. The Comments state further that express warranties rest on "dickered" aspects of the individual bargain. N.J.S.A. 12A:2-313 , Comment 1. Particular reliance on such statements of description or quality need not be shown and the warranty issue will be normally a factual one. N.J.S.A. 12A:2-313, Comment 3.
As noted, the booklet distributed by Uniroyal with the purchase of its steel-belted radial tires contained a section entitled "UNIROYAL STEEL BELTED RADIAL TIRE GUARANTEE." It expressly "guaranteed [the tires] for 40,000 odometer miles" in three specific situations, two of which arguably apply to this case. One such situation relates to "road hazard protection" which furnishes a guarantee "[i]f within 40,000 vehicle odometer miles the tire becomes unrepairable due to impact breaks, snags, cuts or punctures . . . ." The other, referred to as a "[g]eneral [guarantee," applies "[i]f a tire becomes unserviceable, for any reason other than wearout or [those enumerated in] the specific road hazards [guarantee] . . . ."
An express warranty under the Code can arise even though the word "warranty" is not used. N.J.S.A. 12A:2-313(2). Guarantees are viewed as warranties under New Jersey case law. See Jutta's Inc. v. Fireco Equipment Co., 150 N.J.Super. 301, 306 (App.Div.1977); Adams v. Peter Tramontin Motor Sales, Inc., 42 N.J.Super. 313, 319 (App.Div.1956). In Jutta's Inc., the Appellate Division, calling the manufacturer's guarantee an "express guarantee," treated it as an express warranty. 150 N.J.Super. at 306. In Adams, the Appellate Division held that a 90-day guarantee of repair or replacement of parts constituted an express warranty because it was made before the sale, was given to the buyer "in case anything went wrong," and had a "natural tendency" to induce the sale of the automobile. 42 N.J.Super. at 319. Similarly, guarantees were treated as express warranties in Collins v. Uniroyal, Inc., 64 N.J. 260 (1974). See also McCarty v. E. J. Korvette, Inc., 28 Md.App. 421, 427, 347 A.2d 253, 258 (Ct.Spec.App.1975) (tire guarantee is express warranty). Hence, it is of no legal significance that Uniroyal's undertaking with respect to its tires was denominated a "guarantee" rather than a "warranty." Its obligation was an express warranty if it could fairly be understood, regardless of Uniroyal's intent, to constitute an affirmation or representation that the tires possessed a certain quality and capacity relating to future performance.
The provisions of the tire guarantee were included in the "OWNER'S GUIDE AND GUARANTEE." That booklet deals extensively with the characteristics, quality, capacity, and performance of Uniroyal steel-belted radial tires. It states, for example, that "[t]he radial design provides superior tread mileage, traction and lower rolling resistance . . . ." The tire is said to be "engineered to provide a proper balance" as to certain "performance characteristics," e. g. "tread mileage, traction, endurance, road hazard resistance." In addition, the booklet is replete with references to "guarantee." The word "guarantee" is prominently displayed on the cover; on the very first page the owner is advised that the booklet contains "40,000 mile guarantee provisions." A separate section of the booklet alerts the purchaser in bold type to the "UNIROYAL STEEL BELTED RADIAL TIRE GUARANTEE," and throughout that section the term "guarantee" appears both in subject headings (e. g., "What is Guaranteed And For How Long,") as well as in descriptive language (e. g., "guarantee eligibility," "general guarantee," "tire guarantee.") This section also deals specifically with future performance in terms of a tire becoming "unrepairable" or "unserviceable." Moreover, another page containing what is called "adjustment claim forms," is denominated as "Uniroyal Steel Belted Radial Passenger Tire Mileage Guarantee Certificate."
In a section dealing with exclusions, the guarantee states that it is a substitute for any "other express or implied warranties, including but not limited to any implied warranties of merchantability or fitness for a particular purpose." This suggests, by negative implication, that the guarantee actually given the purchaser itself constitutes an express warranty since it serves to replace "other express warranties," and, further, that the guarantee was intended to be the functional equivalent of ordinary implied warranties which relate generally to product quality and performance.
The document taken as a whole firmly supports the conclusion that Uniroyal has given an express warranty in conjunction with the sale of its steel-belted radial tires. It does so in language which spells out such an undertaking with sufficient clarity and specificity. Cf. Herbstman v. Eastman Kodak Company, 68 N.J. 1, 12 (1975) (guarantees of future performance must be specific). The guarantee, as presented and expressed, constitutes an affirmation or representation that the tires possess a capacity and quality relating to their ability to perform. On the basis of this communication, a purchaser could reasonably expect that the tire if used in accordance with the Uniroyal instructions would not become unrepairable or unserviceable within the first 40,000 miles of normal use or, if it did, that the consumer would be entitled to some form of redress.
Ill
The Appellate Division determined that in this case there was sufficient evidence of breach of warranty. This brings us to the gravamen of the appeal, namely, whether Uniroyal has legally and effectively limited its liability for damages for a breach of the express warranty to either replacement of the failed tire or a partial or full refund of the tire's purchase price.
The language of the Uniroyal guarantee, if given literal effect as contended by Uniroyal, would limit damages recoverable for breach of warranty. While the express warranty states that the tire is "guaranteed for 40,000 vehicle odometer miles," it further provides under the general guarantee clause that the tire will be replaced at no charge if "unserviceability" occurs within 8,000 miles and, beyond that mileage up to 40,000 miles, "unserviceability" will result in pro rata charge for a new tire; similarly, if the tire at any point up to 40,000 miles becomes "unrepairable" because of "road hazards," the warranty provides for a pro rata adjustment charge.
The warranty in part states by way of further exclusion as follows:
4. WHAT IS NOT COVERED BY THE GUARANTEE
a) General Exclusions applicable to all parts of guarantee.
Unserviceability or unrepairability or failure or loss due to accident, fire, chain damage, racing, theft, run flat or willful abuse.
This guarantee is a promise of replacement under the conditions specified. It is not a promise that your tires will not fail.
This guarantee is given in lieu of all other express or implied warranties, including but not limited to any implied warranties of merchantability or fitness for a particular purpose. It does not cover consequential damages and UNIROYAL'S liability is limited to repairing or replacing the tire in accordance with the stipulations contained in this guarantee.
[Emphasis in original.]
These exclusions cut deeply into the substantive effect of the warranty relating to tire capacity and quality. If the failure of the tire equates with "unserviceability or unrepairability or failure or loss," but is caused by an "accident, fire, chain damage, theft, run flat or willful abuse," the resultant deficiency of the tire would not be covered at all under the warranty. Thus, even though the express warranty against "unrepairability," is first stated in the guarantee booklet as being applicable to any failure resulting specifically from impact breaks, snags, cuts, or punctures and the warranty against "unserviceability" is stated as being applicable to any failure for any other reason except "wearouts," the general exclusion restricts the scope of this coverage. Moreover, even though the express warranty deals with tire failure, described as unserviceability or unrepairability, the general exclusion section states that the guarantee is "not a promise that [the] tires will not fail." Further, the general exclusionary clause also states that it is "in lieu of all other express warranties," as well as the implied warranties of merchantability and fitness, which implied warranties clearly relate to quality and performance and are ordinarily available to the purchaser.
The exclusionary clause deals not only with the scope of coverage and product performance—that is, whether and under what circumstances a tire might fail—but also with the extent of liability. Thus, the guarantee is described in the general exclusionary clause, not as a warranty relating to quality or performance as implied in the initial presentation of the guarantee, but merely as "a promise of replacement under the conditions specified." Further, the exclusionary clause states that the guarantee "does not cover consequential damages" and that "liability is limited to repairing or replacing the tire in accordance with the stipulations contained in this guarantee."
In determining the efficacy of Uniroyal's attempted disclaimer and restriction of its affirmative warranty, it is important to differentiate between a disclaimer of warranty and a limitation of remedy. N.J.S.A. 12A:2-719, Comment 3; White & Summers, Uniform Commercial Code § 12—11, at 383 (1972). As Professors White and Summers explain, a disclaimer clause is used to exclude or limit the seller's warranties. White & Summers, supra, at 384. The disclaimer limits the seller's liability by reducing the number of situations in which the seller can be in breach of warranty. Ibid. An exclusionary clause, on the other hand, restricts the remedies available to one or both parties once a breach has been established. Ibid.
The complete exclusion of express warranties is strongly disfavored in the UCC. See N.J.S.A. 12A:2-313, Comment 4; see also Henningsen v. Bloomfield Motors, Inc., 32 N.J. 358, 373 (1960). An exclusion or limitation engrafted upon express warranties is inoperative to the extent its terms are unreasonably inconsistent with the express warranties that are given. Realmuto v. Straub Motors, Inc., 65 N.J. 336, 341 n.2 (1974); N.J.S.A. 12A:2-316(1). On this question of warranty qualifications, it is instructive to compare the Code treatment of implied warranties. The complete exclusion of implied warranties, including warranties of merchantability and of fitness for a particular purpose, is specifically permitted under the Code. See N.J.S.A. 12A:2-316. Nevertheless, in order to effect the exclusion of an implied warranty of merchantability, the language must be clear and conspicuous. Ibid. The Code, moreover, expressly defines "conspicuous" to mean "[a] term or clause . so written that a reasonable person against whom it is to operate ought to have noticed it." N.J.S.A. 12A:1-201(10); see also N.J.S.A. 12A:1-201, Comment 10. While no such requirement is explicitly imposed by the Code with respect to a disclaimer of an express warranty, it is inconceivable that such a disclaimer or limitation of an express warranty which is other than clear and conspicuous could be regarded as valid and enforceable.
The parties, as well as the courts below, concluded that the question of whether the warranty disclaimers and limitations here effectively limit Uniroyal's liability for damages turns upon notions of "unconscionability." They were strongly influenced in that direction by our decision in Collins v. Uniroyal, Inc., supra. In Collins, the plaintiff's husband was killed in an automobile accident ostensibly caused by the failure of a tire manufactured by the defendant. In a subsequent suit for breach of express warranty and strict liability in tort, the trial court excised as being unconscionable the defendant's limitation of remedy to replacement of the tires. This Court affirmed that determination based on N.J.S.A. 12A:2-719(3). 64 N.J. at 261. That section of the Code provides that while consequential damages for breach of warranty may be limited or excluded unless "unconscionable," such a limitation with respect to damages for personal injuries is "prima facie unconscionable." The Court also gave considerable weight in its conclusion to the evidence that the buyer had relied on the seller's advertisements that the tires would save his life. Id. at 263.
Here the presumption of unconscionability embodied in N.J.S.A. 12A:2-719(3) is not applicable because the presumption applies by its terms only to attempts to limit damages for personal injury arising out of a breach of warranty. N.J.S.A. 12A:2-719(3). We deal in this case only with a claim for property damages. This does not mean, however, that consider ations of fairness or unconscionability are any less relevant when reviewing warranties which contain limitations on property damages. It may be that under certain circumstances a restriction upon damages interwoven in an express warranty guaranteeing performance could be "unreasonably inconsistent" with the terms of the express warranty and, therefore, inoperative. See N.J.S.A. 12A:2-316(1). Moreover, the Court always retains the option in an appropriate case of declaring the limitation unconscionable under N.J.S.A. 12A:2-302. See Jutta's Inc. v. Fireco Equipment Co., supra, 150 N.J.Super. at 307 (consequential damages clause is unconscionable); cf. Unico v. Owen, 50 N.J. 101, 125 (1967) (N.J.S.A. 12A:2-302 authorizes the court to refuse to enforce any consumer contract clause which it finds unconscionable). This principle is also recognized ^t the outset in N.J.S.A. 12A:2-719(3), viz, "[consequential damages may be limited or excluded unless the limitation or exclusion is unconscionable."
We need not, however, resolve whether or not the attempted limitation of recoverable damages for property loss from a breach of warranty is in this case unconscionable in the sense considered in Collins and N.J.S.A. 12A:2-719(3). There is an antecedent question, the resolution of which controls the extent of Uniroyal's liability here. That question is whether the terms of the remedy limitation, as expressed and presented as part of the express warranty, are so deceptive, confusing, or misleading so as to constitute an inadequate communication to purchasers concerning the meaning of the express warranty.
The courts which have found remedy limitations on property damage to be unconscionable have been strongly influenced by the fact that purchasers were misled or deceived or that the warranties were not explicit. See Ford Motor Co. v. Reid, 250 Ark. 176, 184, 465 S.W.2d 80, 85 (Sup.Ct.1971) (limitations which are exclusive must clearly be stated to be such); McCarty v. E. J. Korvette Inc., supra, 28 Md.App. at 434, 347 A.2d at 262 (express warranty cannot later be negatived); Jutta's Inc. v. Fireco Equipment Co., supra, 150 N.J.Super. at 307 (damages clause obscure and concealed and therefore invalid). In these cases the remedy limitation clause was found to be obscure in meaning, an unfair surprise, or concealed in a provision suggesting that the buyer was receiving a benefit in the form of a guarantee. The McCarty court in fact admonished the manufacturer, stating that "if the appellees do not want to be liable for consequential damages, they should not expressly warrant the tire [against blowouts]." 28 Md.App. at 433—434, 347 A.2d at 262. Indeed, the Arkansas Supreme Court in Reid specifically stated that "[i]f the Ford Motor Company intended the repair remedy to be exclusive, as it now contends, it should have stated that intention in express language." 250 Ark. at 184, 465 S.W. 2d at 85. Similarly, in Jutta's Inc., the Appellate Division found the limitation unconscionable because of the manner in which it was buried in the contract. See 150 N.J.Super. at 307.
Taken in its totality, an examination of the Uniroyal guarantee in this case leads to the conclusion that it is seriously lacking in clarity. As already suggested from the earlier narrative discussion of the warranty, ante at 326-328, the booklet presents the owner with a linguistic maze. Throughout the document there is an admixture of terms relating to quality, capacity, and performance, together with disclaimers and exclusions of coverage, as well as limitations and restrictions upon liability and remedies. There are fulsome and repeated references to the term "guarantee," seemingly relating to quality and performance followed by the rather sudden, isolated use of the term "promise," purportedly limiting the entire contractual undertaking to tire replacement. What is thus given to a purchaser is not a simple and straight-forward document defining on the one hand that which constitutes an affirmation of quality or performance and, on the other, the liability which flows from a breach thereof. Rather what is presented is a mélange of overlapping, variant, misleading, and contradictory provisions.
The fundamental deficiency of the Uniroyal guarantee arises from the attempt to enforce it not as an affirmative, albeit limited, warranty of performance but rather as a promise of tire replacement or purchase price refund subject to certain conditions. If that promise is the primary meaning of the undertak ing, then that obligation should have been presented visually with the same prominence and frequency given to the term "guarantee." The purchaser should not have been invited or induced to believe that he was obtaining a guarantee of performance, however circumscribed or limited, instead of a promise that either tires would be replaced or the purchase price refunded under certain circumstances. Cf. McCarty v. E. J. Korvette, Inc., supra, 28 Md.App. at 434, 347 A.2d at 262 (damages limitation clause cannot convert express warranty into promise to replace); Jutta's Inc. v. Fireco Equipment Co., supra, 150 N.J.Super. at 307 (damages limitation clause is obscure and concealed and is thus unconscionable); Murray, "Unconscionability: Unconscionability," 31 U.Pitt.L.Rev. 1, 41 (1969) (unfair surprise is an element of unconscionability); Spanogle, "Analyzing Unconscionability Problems," 117 U.Pa.L.Rev. 931, 949 (1969) (concealment and trickery suggest unconscionability).
In contending that these exclusions or limitations effectively restrict the scope of its warranty and its resultant liability, Uniroyal relies heavily upon Herbstman v. Eastman Kodak Co., supra. There the plaintiff wanted the purchase price of his malfunctioning camera refunded. The Court held that the plaintiff's remedy was limited to that stated in the warranty— repair of the camera. 68 N.J. at 12. In interpreting the Herbstman warranty, the Court held that the manufacturer did not warrant the camera to be free of mechanical defects. "Rather, the language used contemplated that such defects might occur and, if so, Kodak would repair them." Ibid.
Herbstman, however, is distinguishable. Unlike the warranty in this case, which intermixes affirmations of quality and performance with disclaimers of scope and limitations upon relief, the undertaking in Herbstman did not purport to constitute anything other than a simple promise to repair. There were no misleading or deceptive elements in the presentation; the guarantee remedy limitation was clear and explicit in expression and isolated.
It is to be emphasized that we are here dealing with words of exclusion or limitation contained in a contract document that is not the product of mutual negotiation or cooperative draftsmanship. The purchaser of a mass-produced consumer article with a standard warranty form or booklet, as in this case, has no opportunity to bargain over its terms. Warranties are prepared unilaterally by the company and distributed automatically with the product on a mass basis. Henningsen v. Bloomfield Motors, Inc., supra, 32 N.J. at 390. The consumer must ordinarily place considerable reliance upon the fairness and good faith of the manufacturer and its dealers. It has therefore been recognized that the reliance which a consumer necessarily reposes in a seller engenders a corresponding responsibility on the seller. See id. at 399. This is especially true where the product, upon failure even in normal use, presents a serious risk of personal injury or property damage. See id. at 400.
This principle of fair dealing with the public has long been recognized in other areas. See, e. g., Kugler v. Romain, 58 N.J. 522, 536 (1971) (terms of sale which are not made clear by mass-marketing sellers to uneducated and inexperienced consumers are not enforceable); Gerhardt v. Continental Ins. Cos., 48 N.J. 291, 298 (1966) (exclusionary clauses in insurance policies which are neither conspicuous nor plain and clear are not to be given effect); Allen v. Metropolitan Life Ins. Co., 44 N.J. 294, 305-306 (1965) (insured justifiably relies on knowledge and good faith of insurer); cf. Unico v. Owen, supra, 50 N.J. at 116 (note holder who has knowledge of seller's standardized contract may not be holder-in-due-course of consumer's note because holder took note without good faith). Where trade practices are subject to governmental regulation, advertisements or warranties which do not prominently and conspicuously communicate important exclusions or limitations in clear and readily understandable language are generally regarded as improper or invalid since they serve to mislead or confuse the average consumer. See, e. g., Montgomery Ward & Co. v. FTC, 379 F.2d 666, 672 (7 Cir. 1967) (advertising of unconditional guarantees when guarantees contained limitations was deceptive advertising); Double Eagle Lubricants, Inc. v. FTC, 360 F.2d 268, 270-271 (10 Cir. 1965) (can label with oil ingredients printed on side instead of on face is still misleading and not conspicuous enough to inform public that oil is reprocessed from used oil); General Motors Corp. v. FTC, 114 F.2d 33, 36 (2 Cir. 1940), cert. den. 312 U.S. 682, 61 S.Ct. 550, 85 L.Ed. 1120 (1941) (GMAC "6% plan" could mislead public into believing that annual interest charged was six percent even though careful reading indicated otherwise). Cf. Donaldson v. Read Magazine, Inc., 333 U.S. 178, 188, 68 S.Ct. 591, 597, 92 L.Ed. 628, 640 (1947) ("Advertisements as a whole may be completely misleading although every sentence separately considered is literally true. This may be because things are omitted that should be said, or because advertisements are composed or purposefully printed in such a way as to mislead.")
These foregoing principles are relevant to this case. Uniroyal's attempted limitation of its damages for breach of its express warranty was not prominently, conspicuously, and clearly set forth. That failure coupled with the dominant descriptions of Uniroyal's undertaking as being a guarantee dealing with the performance capacity of the tires would lead a purchaser of ordinary understanding to believe and expect that the warranty was an affirmation of quality rather than simply a promise to replace. It follows that Uniroyal's limitation of remedy to either tire replacement or a refund of the purchase price can be given no effect.
For these reasons, the judgment of the Appellate Division reversing and remanding the matter for a new trial is modified and affirmed and such new trial shall be undertaken in accordance with this opinion.
One of the issues at trial was whether the failure of the tire under the circumstances came within the terms of the express warranty. This dispute centered on whether a "blowout" had occurred and whether such a tire blowout was covered by the express warranty. The Appellate Division noted that the terms of the guarantee in the present case with respect to the phenomenon of "blowouts" were different from those considered in the earlier decision of Collins v. Uniroyal, Inc., 126 N.J.Super. 401 (App.Div.1973), aff'd 64 N.J. 260 (1974). In Collins, the guarantee stated specifically that when used in normal passenger car service, every tire "is guaranteed during the life of the original tread against blowouts, cuts, bruises, and similar injury rendering the tire unserviceable." 126 N.J.Super. at 405 (emphasis added). By contrast, the guarantee made by Uniroyal in the instant case does not explicitly include the term "blowout" in either the road hazard protection warranty or the general guarantee.
The Appellate Division concluded in this case that there was sufficient evidence to show that a blowout of the tire on the roadway was caused by an "impact break" but that the jury had not received sufficiently clear instructions to determine whether or not a blowout had occurred in that manner. For that reason, the court remanded the case for a new trial. Since the evidence in the case would also permit another inference, i. e., the tire had failed or had a blowout unrelated to an "impact break," this raises the question as to whether such a failure or blowout might nevertheless consti tute a tire becoming "unserviceable for any reason" under the general guarantee. Although none of the parties has raised this issue either at trial or on appeal, we deem it appropriate that the parties be given the opportunity at a new trial to present this theory of breach of express warranty under the "general guarantee" clause.