Opinion ID: 1218876
Heading Depth: 1
Heading Rank: 5

Heading: Vertical Privity

Text: Hitachi asserts that the agreement between GECC and Vacation Village expressly provides that GECC is not required to enforce the manufacturer's warranties on behalf of itself or on behalf of Vacation Village, indicating that Vacation Village was not intended as a third-party beneficiary of the agreement between Hitachi and GECC. However, Hitachi offers no authority in support of this proposition. Moreover, whether GECC was required to enforce Hitachi's warranties on behalf of Vacation Village is not dispositive of whether Hitachi's warranties extend to Vacation Village. In pertinent part, NRS 104A.2209 provides that: 1. The benefit of the supplier's promises to the lessor under the supply contract and of all warranties, whether express or implied ... extends to the lessee to the extent of the lessee's leasehold interest under a finance lease related to the supply contract.... (Emphasis added.) Vacation Village is the lessee under a finance lease with GECC, and as such, the implied warranties of merchantability extend to Vacation Village. In addition, this court has held that lack of privity between the buyer and manufacturer does not preclude an action against the manufacturer for the recovery of economic losses caused by breach of warranties. Hiles Co. v. Johnston Pump Co., 93 Nev. 73, 79, 560 P.2d 154, 157 (1977) (citations omitted). Thus, Vacation Village can bring a complaint against Hitachi for breach of warranty despite Vacation Village's lack of privity with Hitachi.