Opinion ID: 2143910
Heading Depth: 1
Heading Rank: 1

Heading: Exclusion of Implied Warranties

Text: Unless excluded or modified, a warranty that goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind. Ind. Code § 26-1-2-314 (West Ann.Ind. Code 1980), amended by, Ind. Code § 26-1-2-314 (West Supp. 1989). Travel Craft argues that the disclaimer of the implied warranty of merchantability it drafted in this case  There are no other warranties, express or implied  was ineffective because it did not contain the word merchantability. The most recent Indiana authority on disclaimer of an implied warranty of merchantability holds that a disclaimer is ineffective unless it expressly and conspicuously mentions the word merchantability. Ind. Code § 26-1-2-316(2) (West 1980), [1] construed in Agrarian Grain Co. v. Meeker (1988), Ind. App., 526 N.E.2d 1189, 1192. Ind. Code § 26-1-2-316(2) requires using the actual word merchantability in order to protect the buyer from surprise. The warranty of merchantability is so frequently implied in a sale that to exclude it one must exercise special care. See, e.g., Dessert Feed Co. v. Drew Farmers Supply, Inc., 248 Ark. 858, 454 S.W.2d 307 (1970); Pearson v. Franklin Laboratories, Inc., 254 N.W.2d 133 (S.D. 1977); Mobile Housing, Inc. v. Stone, 490 S.W.2d 611 (Tex.Civ. App. 1973). The disclaimer in this transaction would normally be inadequate because it does not mention the word merchantability. After reading Ind. Code § 26-1-2-316 and the Uniform Commercial Code's commentary, however, we conclude that this case is an exception to the rule. The commentary states that U.C.C. § 2-316(2) seeks to: [P]rotect a buyer from unexpected and unbargained language of disclaimer by denying effect to such language when inconsistent with language of express warranty and permitting the exclusion of implied warranties only by conspicuous language or other circumstances which protect the buyer from surprise. Ind. Code § 26-1-2-316 comment 1 (West 1980) (emphasis added). Applying Ind. Code § 26-1-2-316(2) in favor of Travel Craft, the buyer and the drafter of the warranty, would subject the seller to the same type of surprise the provision is intended to prevent. Accepting Travel Craft's argument would turn a buyer's shield against surprise into a buyer's sword of surprise. We conclude, consequently, if the buyer drafts the disclaimer it cannot in good faith claim surprise or unexpected and unbargained for language. Our construction follows the drafter's intent that the Code be construed to promote its underlying purposes and policies, [2] and leads us to hold in this case that the implied warranty of merchantability was effectively disclaimed, even though the word merchantability was not mentioned. As for the implied warranty of fitness for a particular purpose, Ind. Code 26-1-2-316(2) provides the opportunity to disclaim simply by a conspicuous writing. We conclude that the words of this disclaimer were adequate. The trial court properly granted Mende's motion for summary judgment aimed at implied warranties.