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Palmucci v. Brunswick Corporation

311 N.J. Super. 607, 710 A.2d 1045 (App. Div. 1998)

UCC; REMEDIES; WARRANTIES—Under the UCC, an express warranty may properly contain a limitation of remedies unless the limitation of remedies causes the contract to fail of its purpose. A buyer must cooperate with a seller in allowing the seller to attempt a permitted cure.

A consumer purchased a boat engine from a dealer that installed the engine in a boat already owned by the consumer. Upon delivery of the engine, the consumer was given a warranty book containing the following conspicuously written engine warranty: “Our obligation under this Warranty shall be limited to repairing a defective part, or at our option, refunding the purchase price or replacing such part or parts as shall be necessary to remedy any malfunction resulting from defects in material or workmanship as covered by this warranty.” The warranty also conspicuously provided that all incidental or consequential damages were excluded and that there were no warranties of merchantability and fitness. Other implied warranties were limited to the life of the warranty, which was one year from the date of purchase. The warranty also stated: “Engine noise does not necessarily indicate a serious engine problem. If diagnosis indicates a serious internal engine condition which could result in a failure, condition responsible for noise should be corrected under the warranty.”

After only a few hours use, the engine began to make a loud noise. Certain that the engine had a defect in the valve train, the consumer contacted the dealer who directed the consumer to bring the boat in for inspection. Based upon that inspection, the dealer concluded that the “studs pulled” and advised the consumer that it intended to replace the heads. The consumer did not want the engine repaired; rather, he wanted a new engine. The consumer sought to revoke his acceptance of the engine, pursuant to N.J.S. 12A:2-608 because, in his view, the defect substantially impaired the product’s value to him. Unfortunately for him, the express warranty barred such a revocation. Although revocation of acceptance is available to the buyer of the defective part pursuant to N.J.S. 12A:2-608, that right does not accrue where, as in this case, the product is sold with a limitation of remedy. The particular warranty was permitted under the provisions of N.J.S. 12A:2-719 because the party’s intent to limit remedies was “clearly expressed.” By reason of N.J.S. 12A:2-719(2), the customer was not entitled to relief under Section 12A:2-608 unless circumstances caused the limited remedy “to fail of its essential purpose.” In addition, even if 12A:2-608 applied, the Court did not infer that the defect, although not identified, was serious and incapable of repair because the seller and manufacturer never had a chance to try to repair the engine. Thus, it was not possible to conclude that the defect caused a substantial impairment in value, which is a pre-requisite to allowing a buyer to revoke acceptance. N.J.S. 12A:2-719 precludes revocation for trivial defects or defects which may be easily corrected.

Although the Uniform Commercial Code does not explicitly require a buyer of a defective product to allow a seller to “cure” a defect in a product after the buyer has accepted the goods, the warranty in this case gave the manufacturer the right to repair or replace at its option. Since the consumer did not abide by the requirements of the warranty in that he did not allow the manufacturer the remedy that the warranty permitted, he was not entitled to recovery under his breach of warranty claim. N.J.S. 12A:2-719 specifically permits a warranty contract to limit remedies available to a buyer and to provide that a seller may repair a defective product instead of permitting the buyer to revoke acceptance of it. Here, the seller and manufacturer each took advantage of that section and provided for remedies in addition to, or in substitution for, those provided in the Uniform Commercial Code by limiting the buyer’s remedies to repair and replacement of non-conforming goods or parts.

The customer established that it was the manufacturer’s policy not to replace an engine unless it was more than 70% defective. Based on that information, the customer contended that the manufacturer’s policy violated the Consumer Fraud Act. In the view of the Court, however, mere breach of warranty would not be sufficient to prove violation of the Consumer Fraud Act, which requires a showing of deception or fraud.


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