Opinion ID: 675175
Heading Depth: 2
Heading Rank: 2

Heading: IBM's Disclaimer of Implied Warranties

Text: 22 TCA next argues that because it was not a party to the negotiations between ICC and IBM, it is not bound by the terms of the remarketer agreement, including IBM's disclaimer of implied warranties. TCA also argues that any disclaimers of implied warranties by IBM are not binding because they were not delivered at the time of the sale. IBM argues that the remarketer agreement between IBM and ICC included a valid disclaimer of implied warranties, and the U.C.C. as enacted in Minnesota operates to extend the disclaimer as a matter of law to TCA as the ultimate purchaser or end user. 23 The U.C.C. as adopted in Minnesota has a privity provision that operates to extend all warranties, express or implied, to third parties who may reasonably be expected to use the warranted goods. Minn.Stat.Ann. Sec. 336.2-318 (West Supp.1994). 2 The seller can disclaim implied warranties. Id. Sec. 336.2-316. 3 Disclaimers of implied warranties are extended to third party purchasers by operation of Sec. 336.2-318. Hydra-Mac, Inc. v. Onan Corp., 450 N.W.2d 913, 916 (Minn.1990) (Hydra-Mac); see also SCM Corp. v. Deltak Corp., 702 F.Supp. 1428, 1432-33 (D.Minn.1988) (applying Minnesota law). 24 The remarketer agreement between IBM and ICC included a disclaimer of ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. As the district court correctly noted, this language complies with the requirements of Minn.Stat.Ann. Sec. 336.2-316(2) (that is, it was in writing, conspicuous and mentioned merchantability) and thus effectively disclaimed all implied warranties. 25 Even assuming that TCA did not receive a copy of the warranty disclaimer, TCA's claim of breach of implied warranties by IBM fails as a matter of law. TCA argues that the disclaimer must be delivered at the time of the sale. See, e.g., Noel Transfer & Package Delivery Service, Inc. v. General Motors Corp., 341 F.Supp. 968, 970 (D.Minn.1972) (Noel Transfer ) (burden is on party asserting the disclaimer to establish disclaimer was delivered at time of sale and constituted an integral part of the transaction). Noel Transfer is distinguishable from the present case because it did not involve a third party transaction. Thus, operation of Minn.Stat.Ann. Secs. 336.2-316, .2-318 extends IBM's disclaimer of implied warranties to TCA as a matter of law. Hydra-Mac, 450 N.W.2d at 916. 26