Opinion ID: 2616044
Heading Depth: 1
Heading Rank: 2

Heading: There was evidence to support the findings by the trial court.

Text: The trial court made a finding of fact that the seller impliedly warranted that the goods involved would be fit for a particular purpose and that 373 of the units produced by plaintiff for defendant were defective. ORS 72.3150 provides for an implied warranty of fitness for a particular purpose, as contrasted with the implied warranty of merchantability under ORS 72.3140, which includes a warranty of fitness for ordinary purposes. The purpose of such a warranty is to protect the buyer of goods from bearing the burden of loss when the goods, although not violating an express warranty, do not meet the buyer's particular purpose. A warranty of fitness for a particular purpose arises regardless of the seller's intent whenever (a) the buyer relies on the seller's skill or judgment to select or furnish suitable goods, and (b) the seller at the time of contracting has reason to know the buyer's purpose and that the buyer is relying on the seller's skill and judgment. [1] Such a warranty may arise when, as in this case, a businessman buys goods that have to be specially selected or particularly manufactured and assembled for his business. [2] It is true, as contended by plaintiff, that there are no such warranties when goods are manufactured in accordance with specifications provided by the buyer. In such an event, the buyer does not rely on the seller's skill or judgment. [3] In this case, however, there was evidence from which the trial court could properly find that no specifications were given by defendant for the electronic control unit to be manufactured for it by the plaintiff; that defendant relied upon the skill and judgment of the plaintiff in the design and manufacture of that electronic unit; that defendant had no expertise in electronics and that it was justified in such reliance. It is also true, as next contended by plaintiff, that in some cases there might be no justifiable reliance by a buyer who has equal or superior knowledge and skill in the design and manufacture of the product purchased by him. [4] Again, however, it was a question of fact in this case whether defendant had knowledge and skill equal or superior to that of the plaintiff. There was evidence to support a finding by the trial court that defendant had no knowledge or expertise in electronics, as did the plaintiff, and that defendant did not have equal or superior knowledge and skill in the design and manufacture of the electronic control unit which it purchased from plaintiff for its Lectro-Matic step, even though it may have had superior knowledge and skill in the design and manufacture of the remaining components of that step. Plaintiff also contends, however, that defendant cannot claim that it relied upon the plaintiff because defendant inspected and tested every unit before selling [it] to its own customers. It is true that when a buyer in fact makes an examination of goods and accepts them, with no complaint, there may be a waiver of any matter on which a claim for breach of such a warranty could be based. [5] When, however, the defect is latent, so that such an inspection will not reveal its existence, there is no proper basis to infer an intent to waive such a defect. [6] There was evidence in this case from which the trier of the fact could properly find that because the electronic control devices had been potted, any defects were latent defects and would not have been revealed by the inspection and tests made by defendant upon receiving them from plaintiff. Finally, plaintiff contends that defendant never proved any defect except [that] some of the steps did not work. It is true that defendant did not prove any specific defect in the design or manufacture of the electronic control device. It is also true that there may have been other reasons, such as improper installation, why the steps did not work properly. There was evidence, however, that the Lectro-Matic step with the electronic control didn't work in the field; that of the 1,000 units sold to defendant by plaintiff over 600 were returned to defendant by its customers; that defendant then substituted a new and different control device for its step, and that its percentage of rejections then dropped to less than one percent. We believe that from such evidence the trier of the fact could properly infer that the electronic control devices sold by plaintiff to defendant were in fact defective. [7] Plaintiff makes no contention that the trial court's computation of damages was improper. The findings and judgment of the trial court were supported by competent evidence and are affirmed.