New York Business Litigation Attorney | New York Breach of Contract Attorney » defective goods

Why Many Implied Warranty Claims Fail Under New York Law

Jonathan Cooper — Thu, 29 Apr 2010 13:35:16 +0000

By way of background, implied warranties are primarily applied in two contexts in New York: (1) in the breach of contract for goods context; and, (2) where a product was not safe for its intended use, i.e., in the defective consumer products context (for more on the latter category, please see “How to Prove a Breach of Implied Warranty Claim Under New York Law“).

But in the breach of contract context as between a purchaser and seller of goods, UCC 2-315, entitled “Implied Warranty: Fitness for Particular Purpose,” is the guiding statute. It provides, in pertinent part, as follows:

“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.”

That being said, the very next statute, UCC 2-316, provides an exception that can swallow the rule that would allow for a breach of contract action based on breach of warranty, however. This provision, entitled “Exclusion or Modification of Warranties,” provides several methods by which implied warranties may be excluded from a sales contract, including by, for example, a “conspicuous” written disclaimer. (See, Brennan v. Shapiro, 12 AD3d 547.)

Therefore, in order to assess the viability of a breach of implied warranty claim, it is critical that you review the language of the contract; more often than not, it will contain a written disclaimer that will sound the death knell for a breach of warranty action.

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What You Can Do Under New York Law When You’re Sold Defective Goods

Jonathan Cooper — Sun, 31 Jan 2010 05:09:41 +0000

In Bimini Boat Sales, Inc. v. Luhrs Corp., plaintiff Bimini, a retail boat dealer, bought a fishing boat from boat manufacturer Luhrs, intending to resell the boat to the general public. Unfortunately for Bimini, after they received the boat from Luhrs, they discovered that the boat had several defects that were serious enough to render it unsaleable, which in legal terms is called “unmerchantable,” or unfit for its particular purpose.

Since the boat was considered “goods” under New York law, Bimini sued to recover under two different provisions of New York’s Uniform Commercial Code. First, Bimini sought to recover damages for Luhrs’ breach of the implied warranties of merchantability [UCC 2-314]; second, Bimini claimed entitlement to damages based upon the boat’s un-fitness for a particular purpose [ UCC 2-315]. Bimini also asserted that it was entitled to consequential damages for harm to their reputation and for loss of business.

In reversing that portion of the Suffolk County trial court’s order that denied plaintiff’s motion seeking judgment as a matter of law, the Appellate Division, Second Department held that plaintiff had proven that the boat was unmerchantable and not fit for resale to the public because it had “fundamental structural deficiencies” and design flaws which required extensive repairs and “design modifications.”

The significance of this decision, in my view, is the last part, however, wherein the appellate court affirmed the trial court’s dismissal of the plaintiff’s claims to recover damages for loss of business and damage to the plaintiff’s business reputation on the grounds the terms of the dealer agreement had expressly barred these claims.

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