Opinion ID: 1144928
Heading Depth: 1
Heading Rank: 1

Heading: the scope of implied-warranty claim

Text: According to the seller's position, the buyer's right of recovery is limited to the terms of the express warranty given at the time of sale. Since that warranty contained a disclaimer of all implied warranties, it is the seller's view that there was error in instructing on implied warranty. The dealer testified that at the time of sale the buyer was furnished an operator's manual for the equipment bought. It contained a copy of the warranty (usually printed at the third and fourth pages). The buyer related that some pages were in fact missing or torn out from his copy  the lost pages being apparently those which comprised the warranty  and that he did not recall ever seeing a copy of the printed warranty. In short, the evidence does not establish as undisputed fact that the buyer did receive a copy of the express warranty. There was hence no error in instructing with respect to both express and implied warranties. We next deal with seller's contention that no warranty of merchantability may be implied from the sale of used goods. Seller relies on pre-Code case law [2] and on the terms of § 1-103. [3] That code section provides that unless displaced by the particular provisions of this Act the principles of pre-existing law would supplement the Code provisions. We find this argument unpersuasive. In their application to warranties implied from sale, code provisions make no distinction between new and used goods. According to § 2-314, when the sale is by one who is a merchant dealing in the kind of goods that are sold, the Code neither exempts the transaction from, nor modifies, the warranty. It is to be implied as a contract term. [4] UCC comments clearly reflect a warranty of merchantability may be implied in a sale of used goods. [5] The overwhelming weight of authority supports this view. [6] Courts which departed from the majority position were persuaded to do so by continued recognition in the respective jurisdiction of pre-Code law which had negated the implication of warranty in a used-goods transaction or by some special circumstances in the case. [7] We decline to follow the minority view  persuaded as we are  that all contrary pre-existing Oklahoma law has been replaced by the Code. We hold that the provisions of § 2-314(1) were clearly intended to apply to all sales of goods by a merchant who deals in them (or similar goods), unless the parties by agreement specifically exclude or modify the legally-imposed warranty of merchantability. The Code simply does not authorize the exception of used goods from the purview of implied warranty of merchantability. To do otherwise would contradict its provisions. [8] Seller also contends that warranty may not be implied from the combine sale because buyer had inspected and operated it before purchase. The post-sale defects, it is urged, are chiefly those discovered and corrected before the sale. They cannot now be considered latent in character. Buyer counters that the evidence is conflicting with respect to whether the purchase occurred before or after the inspection. The terms of § 2-316(3)(b) exclude from implied warranty of merchantability defects which pre-sale examination should have revealed to buyer. [9] In this case evidence identifies numerous defects which were noticed by the buyer before he took possession of the equipment and during its trial use. These defects, which seller promised to remove, were in fact temporarily remedied. After the sale the buyer experienced more problems with the same parts and some malfunction of other parts. There is nothing in the evidence which would compel a finding that the defects, which eventually rendered the combine inoperable and unacceptable, should have been discovered by a buyer, unskilled in mechanics, through normal use of short duration and casual inspection. The record is sufficient to sustain a finding, implicit in the verdict, that the buyer's examination could not have revealed the equipment purchased to be unfit for its intended purpose. [10] Seller next contends the evidence was insufficient to support a verdict bottomed on breach of implied warranty. Under 12A O.S. 1971 § 2-314(2) goods are merchantable when, at the least, they are fit for the ordinary purposes for which they are used. Merchantability is a flexible concept based on the circumstances of the sale and dependent on the description of the goods. [11] It does not connote best quality or perfection in detail. [12] But it does require, at the very least, that goods operate for their ordinary purpose. This is not to say there cannot be problems or break-downs with a merchantable machine. But a breakdown upon almost every occurrence of use is incompatible with conformity to merchantable standards. The record amply supports a finding of breached warranty implied from the sale.