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Synthetic Surfaces, Inc. v. Southwest Synthetic Turf, Inc.

A-3192-02T5 (N.J. Super. App. Div. 2004) (Unpublished)

UCC; WARRANTIES; REMEDIES—Where a seller breaches its warranties under the Uniform Commercial Code, it is entitled to a credit against damages to the extent its customer uses part of the defective material or products created with that defective material.

A golf mat manufacturer began purchasing adhesive from a supplier. Six years later, the supplier prepared a “Tech Sheet” describing a new golf mat adhesive. There was a disclaimer of express and implied warranties at the foot of the “Tech Sheet” in a type face the lower court would later describe as almost impossible to read without magnification. The manufacturer switched adhesives. Within a year, the golf mat company’s customers began to complain about delamination.

The president of the adhesive company visited the golf mat company, observed its manufacturing process, and gave additional advice about mixing the adhesive. The complaints continued. A year later, the adhesive company directed the golf mat company to discontinue use of its product. Then, the golf mat company sued the adhesive company, seeking damages for breach of express and implied warranties.

The lower court found that the adhesive company breached an implied warranty of merchantability, an implied warranty of fitness for particular purpose, and express warranties created by affirmation and description. It also found that the adhesive company sold its product to the golf mat company subject to an express warranty that the adhesive would hold the golf mats together under variable and adverse weather conditions and subject to implied warranties of merchantability and suitability for use in bonding golf mats. It further held that the adhesive company’s disclaimers of warranty were inadequate. Finally, the lower court concluded that the golf mat company established that it was probable that the adhesive was defective and not, as warranted, an effective laminate for golf mats. The lower court determined that the defective adhesive resulted in the delamination of 2,123 mats and awarded damages based on the cost of the materials and the shipping involved in replacing 1,730 mats. The golf mat company acknowledged it did not replace 393 mats, thus the lower court did not award damages for them.

The Appellate Division affirmed the lower court’s decision and found that the adhesive company breached its warranties. However, the Court found that the evidence did not adequately support the damage award. The golf mat company was able to replace the delaminated mats with refurbished mats, thereby reducing the replacement cost by the cost of the turf and scrim, both of which the golf mat company used a second time in making replacement mats. Thus, the Court remanded the case so that the lower court could take into consideration this fact when determining the appropriate damages.

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