Opinion ID: 2173294
Heading Depth: 1
Heading Rank: 1

Heading: as is

Text: Customer note that the vehicle is being sold 'AS IS' by the Selling Dealer. Should the Manufacturer's Warranty apply to this vehicle, it is directly offered by the Manufacturer to the Customer.... In addition, the document referred to contains a disclaimer by the dealer of express or implied warranties as to merchantability or fitness of purpose. There is no question that Husker Dodge's disclaimer of warranties contained on their vehicle buyer's order was conspicuous as required by § 2-316(2). That term is defined in Neb.U. C.C. § 1-201(10) as follows: 'Conspicuous': A term or clause is conspicuous when it is so written that a reasonable person against whom it is to operate ought to have noticed it. A printed heading in capitals (as, NONNEGOTIABLE BILL OF LADING) is conspicuous. Language in the body of a form is `conspicuous' if it is in larger or other contrasting type or color. ... (Emphasis supplied.) In the instant case the disclaimer of warranties of merchantability and fitness for purpose was printed in contrasting red print. The comment to the above section defining conspicuous states: This is intended to indicate some of the methods of making a term attention-calling. But the test is whether attention can reasonably be expected to be called to it. There is no question that in the instant case Husker's disclaimer of warranties, printed on its document in the manner above indicated, was sufficient to call attention to such disclaimer. In addition, we note that § 2-316(3) provides in part: (3) Notwithstanding subsection (2) (a) Unless the circumstances indicate otherwise, all implied warranties are excluded by expressions like `as is', `with all faults' or other language which in common understanding calls the buyer's attention to the exclusion of warranties and makes plain that there is no implied warranty .... In this connection, see, also, Gilliam v. Indiana Nat. Bank, 337 So.2d 352 (Ala.Civ.App. 1976). The evidence in the record of this case clearly indicates that the only warranty in existence was the express limited warranty furnished by the defendant Chrysler Corporation, which was included among the various documents given to plaintiff at the time of the purchase of the automobile in question. We set forth hereafter in full the complete text of Chrysler's limited warranty: BASIC COVERAGE  For the first 12 months or 12,000 miles (20 000 km), whichever occurs first, any part of this vehicle supplied by Chrysler, except tires, which proves defective in normal use will be repaired or replaced by the Selling Dealer using new or remanufactured parts. ADJUSTMENTS  During the first 3 months of the warranty period, the Selling Dealer will also perform any adjustment service required as a result of a manufacturing deficiency. Thereafter, adjustments will be considered owner maintenance responsibility unless required as a direct result of repair or replacement of a defective part under this warranty. WARRANTY START DATE  This warranty starts on the date of original retail delivery or original use, whichever occurs first. OBTAINING WARRANTY SERVICE  To obtain warranty or adjustment service, the owner must return this vehicle to the Selling Dealer's place of business where such service will be performed without charge for parts or labor. In the event the owner is travelling or has moved to a different locality and cannot return to the Selling Dealer, warranty and adjustment service may be obtained from any authorized Chrysler Corporation dealer who sells the same make vehicle. WHAT IS NOT COVERED  This warranty will not apply to: A vehicle on which the odometer reading is altered;  Maintenance services as specified in the Operating Instructions & Product Information Booklet supplied with this vehicle and the parts used in connection with such services;  Repairs required as a result of failure to properly care for or maintain this vehicle, fire, accident, abuse or negligence;  Loss of use of the vehicle, loss of time, inconvenience, expense for gasoline, telephone, travel or lodging, loss or damage to personal property, commercial loss, loss of revenue, or other matters not specifically included are not covered.       This warranty gives the owner specific legal rights and the owner may also have other rights which vary from state to state. THIS WARRANTY IS THE ONLY EXPRESS WARRANTY MADE BY CHRYSLER APPLICABLE TO THIS VEHICLE. ANY IMPLIED WARRANTY APPLICABLE TO THIS VEHICLE IS LIMITED IN DURATION TO THE DURATION OF THIS WRITTEN WARRANTY. Some states do not allow the exclusion or limitation of incidental or consequential damages or limitations on how long an implied warranty lasts, so the above limitations or exclusions may not apply to you. This warranty applies to the 50 United States and Canada. It applies to all owners of this vehicle during the time and mileage (kilometers) limitations expressed herein. It is clear that under the terms of Chrysler's limited warranty, as set out above, its liability under such warranty is limited to repair or replacement of defective parts for the first 12 months or 12,000 miles, whichever occurs first. This is the only warranty involved in this litigation, as Husker Dodge had sold the vehicle to the buyer under an as is restriction and properly disclaimed all other warranties. Chrysler Corporation contends, however, in its brief and argument that it is not liable under its limited warranty to the plaintiff herein because of failure of privity of contract between it and the buyer of the vehicle, pointing out that it was not the seller of the vehicle, but, on the contrary, that the sale of the vehicle was a transaction between Husker Dodge and the plaintiff. We point out, however, that Chrysler Corporation's warranty, although limited in scope, was a direct representation and warranty made by Chrysler to the purchaser. Chrysler's contention is effectively answered by White & Summers, Uniform Commercial Code, § 11-7 at 410-11 (2d ed. 1980), where those authorities state: When the non-privity plaintiff's suit is not based upon 402A or implied warranty, but rather upon defendant's express representation made to the particular plaintiff in advertising or otherwise, courts generally hold that the plaintiff need not be in privity with the defendant. Usually courts characterize such cases as express warranty cases, though in some jurisdictions they are classed as misrepresentation cases. The misrepresentation may come through the defendant's advertising, through labels attached to the product, or through brochures and literature about the product. The only limitation is that the plaintiff must be a party whom the defendant could expect to act upon the representation. Of course, any such plaintiff must also state the other elements of his cause of action. It is possible that lack of privity as a defense to a cause of action will be only a historic relic in the year 2000. It is a doctrine in hasty retreat; its current vitality is largely in cases in which plaintiffs seek recompense for economic loss. We point out again, however, that in this case the limited express warranty of Chrysler Corporation is not based upon merely a warranty allegedly arising in advertising materials, but is a direct written or printed warranty to the purchaser of the automobile, included with the other documents of the seller in the consummation of the sale of the vehicle. In this connection, see Hawkins Constr. Co. v. Matthews Co., Inc., 190 Neb. 546, 209 N.W.2d 643 (1973). There is no question that under the law Chrysler Corporation could legally limit its liability under its express warranty, as it did in this case. It is clear from the record that, contrary to the contentions of the plaintiff, Chrysler Corporation fully complied with the requirements of the Consumer Product Warranties Act (Magnuson-Moss Act), 15 U.S.C. §§ 2301 to 2312, inclusive. The trial court in its decree found that it had done so, and that the applicability of the Magnuson-Moss Act was not a question in this lawsuit. Repair and replacement clauses, in the nature of those contained in Chrysler's limited warranty, have become the basic mechanism by which manufacturers limit or avoid liability in actions for breach of warranty. The clause provides both a remedy to the buyer, whereby he may obtain goods conforming to the contract, and a limitation of the liability of the manufacturer. See Beal v. General Motors Corporation, 354 F.Supp. 423 (D.Del.1973). The authority to limit limit a buyer's remedies under a warranty is found in Neb.U.C.C. § 2-719 (Reissue 1971), which provides in pertinent part as follows: (1) Subject to the provisions of subsections (2) and (3) of this section ... (a) the agreement may provide for remedies in addition to or in substitution for those provided in this article and may limit or alter the measure of damages recoverable under this article, as by limiting the buyer's remedies to return of the goods and repayment of the price or to repair and replacement of nonconforming goods or parts ; (2) Where circumstances cause an exclusive or limited remedy to fail of its essential purpose, remedy may be had as provided in this act. (3) Consequential damages may be limited or excluded unless the limitation or exclusion is unconscionable. (Emphasis supplied.) The general rule appears to be that language of a warranty limiting the buyer's remedies to repair or replacement of defective parts is not, on its face, unconscionable. Murray v. Holiday Rambler, Inc., 83 Wis.2d 406, 265 N.W.2d 513 (1978); Ford Motor Co. v. Mayes, 575 S.W.2d 480 (Ky.1978); Cox Motor Car Company v. Castle, 402 S.W.2d 429 (Ky.1966); Potomac Electric Pow. Co. v. Westinghouse Elec. Corp., 385 F.Supp. 572 (D.C.1974). While it is clear that Husker Dodge, as the dealer selling the automobile in question, was not the agent of Chrysler Corporation for the sale of the automobile, it was such agent with respect to the warranty repairs under Chrysler Corporation's limited warranty. It is clear from the record that all of the repair work done by Husker Dodge on plaintiff's vehicle was authorized and paid for by Chrysler Corporation. Each dealer, by specific written agreement with the manufacturer, was authorized to perform warranty work at the expense of Chrysler Corporation. Through this agreement, the manufacturer held out every dealer as its representative and agent to perform warranty work. Husker Dodge in no way adopted the manufacturer's warranty, and, in fact, sold the automobile on an as is basis, disclaiming any warranties whatsoever. However, with respect to the warranty work performed for Chrysler, it was clearly Chrysler's agent. It is a fundamental rule that an agent who contracts on behalf of a disclosed principal, in the absence of some other agreement to the contrary or other circumstances showing that the agent has expressly or impliedly incurred or intended to incur personal responsibility, is not liable to the other contracting party. The contract is that of the principal alone and the agent cannot be held liable thereon. See, Bury v. Action Enterprises, Inc., 197 Neb. 38, 246 N.W.2d 724 (1976); V.P.O., Inc. v. Money, 201 Neb. 30, 266 N.W.2d 79 (1978); Fisher v. Beebe & Runyan Furniture Co., 200 Neb. 349, 263 N.W.2d 826 (1978); 3 Am.Jur.2d Agency § 261 (1962). In the present case, the warranty furnished by Chrysler Corporation to the buyer specifically instructed her to return the vehicle to her selling dealer's place of business or to any other authorized dealer for the performance of warranty work. Husker Dodge, which had consummated the sale, was fully responsible for all service requirements under the warranties given by Chrysler, and, by reason of its agency relationship with Chrysler Corporation, made the corporation liable as principal and seller for the warranty work performed. See, Kure v. Chevrolet Motor Division, 581 P.2d 603 (Wyo.1978); Eckstein v. Cummins, 41 Ohio App.2d 1, 321 N.E.2d 897 (1974). Although the record in this case indicates that the plaintiff brought her car back to Husker Dodge on various occasions during a period of approximately 6 weeks following the sale of the vehicle to her, for the purpose of repairing various defects in the automobile, the record is clear that the plaintiff was never denied repair services by Husker Dodge, nor was she charged for same. The record reveals that Chrysler Corporation was billed for the repairs by Husker Dodge under its warranty repair agreement and, in fact, paid Husker Dodge for such repairs. There is testimony that the principal defect complained of was with regard to the transmission of the vehicle, and the transmission was, in fact, once replaced prior to the date that plaintiff's father returned the automobile to Husker Dodge. There was testimony at the trial of this matter by a representative of the service department of Husker Dodge that following the abandonment of the car by plaintiff's father on July 25, 1978, when demand was made for a new car, Husker Dodge, in fact, replaced the transmission a second time, although without knowledge on the part of the plaintiff at that time that such was being done. The service representative testified that after the installation of the second transmission, he had road tested and checked the vehicle and found that the transmission was working properly and was not defective. The Koperskis never picked up the automobile, but left it with Husker Dodge. The defendants U. S. National Bank subsequently repossessed the automobile and sold it at private sale and applied the proceeds on plaintiff's loan with the bank, as previously stated. In its decree entered in this matter, the trial court specifically found that plaintiff had failed to prove that Chrysler Corporation had breached its warranty. We believe that under the rule regarding scope of review previously set out, there was sufficient evidence in the record to sustain this finding on the part of the trial court, and that the court was not clearly wrong. We are aware of a line of cases which have afforded relief to the buyer of an automobile on the theory that the contract for the purchase of the automobile has failed of its essential purpose because of the fact that the warrantor has failed, neglected, or refused to make necessary and adequate repairs within a reasonable time to place such vehicle in operating condition. In Goddard v. G.M.C., 60 Ohio St.2d 41, 396 N.E.2d 761 (1979), the court stated: Although in most cases a limited remedy may be fair and reasonable, and satisfy the reasonable expectations of a new car purchaser, other courts and some commentators have generally recognized that when a seller is unable to fulfill its warranted obligation to effectively repair or replace defects in goods which are the subject matter of the sale, such as in the instant cause, the buyer is deprived of the benefits of the limited remedy and it therefore fails its essential purpose. Id. at 45, 396 N.E.2d at 764. In accordance with R.C. 1302.93(B), we conclude that where a new car express warranty limits a buyer's remedy to repair and replacement of defective parts, but when the new car is so riddled with defects that the limited remedy of repair and replacement fails its essential purpose, the buyer may institute an action to recover damages for breach of warranty under R.C. 1302.88(B) and, in a proper case, incidental and consequential damages under R.C. 1302.88(C) and 1302.89. Id. at 47, 396 N.E.2d at 765. To the same effect, see, Clark v. International Harvester Co., 99 Idaho 326, 581 P.2d 784 (1978); Durfee v. Rod Baxter Imports, Inc., 262 N.W.2d 349 (Minn.1977); Eckstein v. Cummins, supra ; Ehlers v. Chrysler Motor Corp., 88 S.D. 612, 226 N.W.2d 157 (1975); Kure v. Chevrolet Motor Division, supra ; Murray v. Holiday Rambler, Inc., 83 Wis.2d 406, 265 N.W.2d 513 (1978). However, as stated above, since we have found that the trial court was correct in its finding that plaintiff had failed to prove that Chrysler Corporation had breached its warranty, and that there was evidence in the record to support that finding, the rule enunciated in the above cited cases cannot be applied to this case. While the result in this case might appear to be harsh, we are obligated to follow established principles of law, and we must conclude that the decree of the trial court was correct. We affirm the action of the court in dismissing plaintiff's petition against all of the defendants herein. AFFIRMED.