Opinion ID: 2101148
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Heading: The Implied Warranty of Fitness.

Text: The only theory of liability submitted by the court was breach of implied warranty of fitness for a particular purpose, Iowa Code § 554.2315 (Uniform Commercial Code § 2-315). That section provides: Where the seller at the time of contracting has reason to know any particular purpose for which the goods are required and that the buyer is relying on the seller's skill or judgment to select or furnish suitable goods, there is unless excluded or modified under the next section an implied warranty that the goods shall be fit for such purpose. The implied warranty of fitness for a particular purpose under section 554.2315 is perhaps better understood when viewed with the implied warranty of merchantability, or fitness for ordinary purposes. Iowa Code section 554.2314 sets out the latter: (1) Unless excluded or modified (section 554.2316), a warranty that the 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. Under this section the serving for value of food or drink to be consumed either on the premises or elsewhere is a sale. (2) Goods to be merchantable must be at least such as (a) pass without objection in the trade under the contract description; and (b) in the case of fungible goods, are of fair average quality within the description; and (c) are fit for the ordinary purposes for which such goods are used; and (d) run, within the variations permitted by the agreement, of even kind, quality and quantity within each unit and among all units involved; and (e) are adequately contained, packaged, and labeled as the agreement may require; and (f) conform to the promises or affirmations of fact made on container or label if any. (3) Unless excluded or modified (section 554.2316) other implied warranties may arise from course of dealing or usage of trade. (Emphasis added.) The official comment to the Uniform Commercial Code illustrates the difference between ordinary and particular purposes under the respective warranties: A particular purpose differs from the ordinary purpose for which the goods are used in that it envisages a specific use by the buyer which is peculiar to the nature of his business whereas the ordinary purposes for which goods are used are those envisaged in the concept of merchantability and go to uses which are customarily made of the goods in question. For example, shoes are generally used for the purpose of walking upon ordinary ground, but a seller may know that a particular pair was selected to be used for climbing mountains. U.C.C. § 2-315, Comment 2, 1 U.L.A. 483 (1976). The warranty of merchantability, Iowa Code § 554.2314, is based on a purchaser's reasonable expectation that goods purchased from a merchant with respect to goods of that kind will be free of significant defects and will perform in the way goods of that kind should perform. It presupposes no special relationship of trust or reliance between the seller and buyer. In contrast, the warranty of fitness for a particular purpose, Iowa Code § 554.2315, is based on a special reliance by the buyer on the seller to provide goods that will perform a specific use envisaged and communicated by the buyer. Thus, any recovery under warranty for a specific purpose is predicated on a showing that (1) the seller had reason to know of the buyer's particular purpose; (2) the seller had reason to know the buyer was relying on the seller's skill or judgment to furnish suitable goods; and (3) the buyer in fact relied on the seller's skill or judgment to furnish suitable goods. Semler v. Knowling, 325 N.W.2d 395, 399 (Iowa 1982); J. White and R. Summers, Handbook of the Law Under the Uniform Commercial Code § 9-9 at 358 (2d Ed.1980). See also Farm Bureau Mutual Insurance Co. v. Sandbulte, 302 N.W.2d 104, 111 (Iowa 1981). The warranty of fitness under section 554.2315 is said to turn on the bargain-related facts as to what the seller had reason to know about the buyer's purpose for the goods and about his reliance on the seller's skill or judgment in selecting them. Jacobson v. Benson Motors, Inc., 216 N.W.2d 396, 404 (Iowa 1974). In this case the vaccine was not purchased by the veterinarians to treat these particular cattle but to keep in stock for their general veterinary practice. The plaintiffs, as owners of the cattle, and the defendant, had no direct dealing with regard to the vaccine. The decision as to what vaccine to use was made by the buyers' veterinarians, not by the defendant. There was no evidence that the seller had reason to know of any purpose for the plaintiffs' use of the vaccine, other than its ordinary use, or that the buyer was relying on the seller's skill and judgment in providing it. The implied warranty of fitness for a particular purpose would appear, therefore, to be inapplicable by its terms. See Iowa Code § 554.2315; Semler v. Knowling, 325 N.W.2d at 399; Jacobson v. Benson Motors, Inc., 216 N.W.2d at 404. The plaintiffs argue, however, that if the buyer's particular purpose is the same as its general use, a warranty of fitness arises, especially when the product has a specific and limited use. In that case, the other elements of the fitness warranty, i.e., the knowledge of the buyer's purpose, knowledge of the buyer's reliance, and the buyer's actual reliance, are apparently to be presumed. The plaintiffs cite only one case, Tennessee Carolina Transportation Inc. v. Strick Corp., 283 N.C. 423, 196 S.E.2d 711 (1973), in support of this theory. That case involved the sale of truck trailers which proved to be faulty. There the court held that because the buyer's specific use was the same as the general use to which trailers are usually put, hauling cargo, the warranty of fitness would apply. It rejected the general rule that a particular use must be a use not normally expected to be made of the goods, a rule recognized by our cases, e.g., Madison Silos v. Wassom, 215 N.W.2d 494, 499-500 (Iowa 1974); Peters v. Lyons, 168 N.W.2d 759, 763 (Iowa 1969), and by the Uniform Commercial Code. See U.C.C. § 2-315, Comment 2, 1 U.L.A. 483 (1976). Cases such as Tennessee Carolina, moreover, have been criticized as enlarging the fitness warranty beyond the intent of the drafters of the Uniform Commercial Code. See J. White and R. Summers, supra, § 9-9 at 357, n. 122. In this case, written material furnished with the vaccine stated that [f]or reducing the economic loss associated with these viruses, vaccination of healthy animals is recommended before or upon entering the feedlot or dairy herd. Vaccination of stressed animals should be delayed. Use of the vaccine on healthy, unstressed cattle, in accordance with these instructions, is the ordinary use for warranty purposes, according to the defendant, and the plaintiffs' evidence was aimed at showing a use in compliance with the instructions, in other words, an ordinary use. While there was contradicting evidence presented by the defendant that the cattle were stressed and perhaps not healthy at the time they were vaccinated, there is no claim by the plaintiffs that this deviation from ordinary use is itself a particular use. They merely claim that their use here is an ordinary use which we should consider as a particular use for warranty purposes. For the reasons to be discussed, we decline to do so. Obviously, in some cases a buyer's particular purpose will be the same as the ordinary purpose for which a product is furnished. In that case, both types of implied warranty may arise. See Jacobson v. Benson Motors, Inc., 216 N.W.2d 396, 404 (Iowa 1974) (sale of motor vehicle); Madison Silos v. Wassom, 215 N.W.2d 494, 499-500 (Iowa 1974) (stave silo); 1 R. Anderson, Uniform Commercial Code, § 2-314:60 (1970); Iowa Code § 554.2315, official comment 2. It is quite another matter, however, to impose an implied warranty of fitness solely on the basis of this identity of purpose. A particular purpose of the buyer is only one of the elements of that warranty; it still turns on what the seller had reason to knowboth as to the buyer's particular purpose and as to the buyer's reliance on the seller's skill and judgment. Jacobson, 216 N.W.2d at 404. There are no bargain-related facts in this case to support a finding of these elements and we will not assume their existence merely on the basis of the limited-use nature of cattle vaccine. We will not assume, as the plaintiffs suggest, that the seller had reason to know of the buyers' particular purpose, and their reliance on the skill and judgment of the seller, merely because cattle vaccine is only usable for one purpose. As the record shows in this case, the vaccine may still be used in different ways, some anticipated by the seller and some not. (The defendant claims it was used in a manner proscribed by the written material accompanying the vaccine.) The plaintiffs have an alternative theory: They claim that the seller had actual reason to know of the particular purpose for the vaccine and to know of the buyers' reliance on the skill and judgment of the seller so as to come within the literal requirements of the implied warranty of fitness. They rely on evidence that sales representatives of the defendant made regular calls on Dr. Hauser, that they discussed the vaccine, and that [i]t is reasonable to infer from this fact that the representative was familiar with the vaccination procedures of Dr. Hauser and with the use he made of the vaccine. There is no evidence that the representative had reason to know the proposed use of the vaccine on these specific cattle, or even that it was to be used in circumstances similar to these, that is when other treatments such as worming, castration, and dehorning would accompany the vaccination, or that there would be a possibility the cattle could already be incubating the disease. Any conclusion that the defendant was put on notice of the plaintiffs' particular use is simply too speculative. It was error to submit the theory of warranty of fitness for a particular purpose.