Galen R. and Ruby W. Tracy v. Vinton Motors, Inc.
Supreme Court of Vermont
130 Vt. 512; 296 A.2d 269; 1972 Vt. LEXIS 310; 11 U.C.C. Rep. Serv. (Callaghan) 750
October 3, 1972, Opinion filed

OPINION: On April 9, 1971, the plaintiffs purchased a used car from the defendant. It was a 1969 Oldsmobile Cutlass, and the purchase price was $ 1895.00. The terms of the transaction were expressed in a written contract. After the trade the plaintiffs became dissatisfied with the condition of the paint on the vehicle and sought to have the defendant repaint it, at a cost of $ 400.00. This took place on or about May 14, 1971, according to the plaintiffs' pleadings. The defendant had acquired the car about three weeks before the sale from another dealer, and advertised it as a "special". It is not claimed that the defendant was responsible for the allegedly defective paint job. The defendant refused to repaint, proposing some alternative solutions unacceptable to the plaintiffs, not material to the issues before us. Litigation followed.

Warranties were dealt with in the written contract of sale, which was incorporated in the pleadings. On the face of the contract, under the heading "Warranty", the choices "New", "O.K. As Is" and "Other" were not marked, but "30 day/1000 miles 50/50" was circled. On the reverse of the form appeared the "Conditions" of the contract. These conditions disclaim any implied warranties, and limit the express warranties to the manufacturer's new car warranty insofar as it is applicable and has not expired.

We first consider the thirty day warranty circled on the sales contract. Under the plaintiffs' allegations themselves nothing was done to implement a remedy under that provision within the period. As is set out in 77 C.J.S. Sales § 320, at 1172, such limitations on warranties are valid, and it is generally held that as to defects not discovered within the thirty-day period, absent fraud, the risk of loss is on the purchaser. The parties have a right to contract with each other as to the terms and limits of warranty, and such agreements will be binding. In this case, the time for recovery under this warranty had run, and was no longer available to the plaintiffs.

The Uniform Commercial Code, Title 9A of Vermont Statutes Annotated recognizes the freedom of parties to make their own bargain, including the disclaiming of any warranties. 9A V.S.A. § 2 -- 316. However, warranties as to merchantability and fitness are subject to special requirements as stated in that statutory provision. The form of effective disclaimer is there spelled out.

In their pleadings in this case the plaintiffs rely on an implied warranty of merchantability. Under the statute, 9A V.S.A. § 2 -- 316(2), "to exclude or modify the implied warranty or (sic) merchantability or any part of it the language must mention merchantability and in case of a writing must be conspicuous. . . ." Assuming that some manner of merchantability as a characteristic applies to the sale of a used automobile, we find that "merchantability" is mentioned in the contract only in connection with a disclaimer as to new automobiles. A close reading of all of the "Conditions" of the contract on the reverse side might yield an inference that "merchantability" was disclaimed as to used cars, also, but it certainly is not clear and conspicuous enough to comply with the statutory purpose.

What does the term "merchantability" embrace with respect to a new car? While an exhaustive answer is neither possible nor required for the purpose of this case, the issue has had examination.  Merchantability of even a new car....imported no more than that it be reasonably suited for ordinary use. It does not mean that it be a car perfect in every detail, but only reasonably fit for the ordinary uses it was manufactured to meet. See also 9A V.S.A. § 2 -- 314(2)(c) where the Uniform Commercial Code has adopted this view of merchantability.

The implied warranty of merchantability, like that of fitness, is primarily directed at the operative essentials of a product. It is not intended to guarantee high quality or perfection of detail.

One of its principal concerns with respect to new automobiles relates to operational safety. In this connection it may be crucial in attaching tort liability for its breach. Neither safety nor tort liability are at issue in this case.

Moving from the warranty's application to new cars to its availability in used car sales, certainly its justifiable focus must be on operative qualities, since its application to asthetic items of necessity must yield to age and previous use. Therefore we hold that the exterior finish on a two year old used car is not, without more, included in any implied warranty of merchantability that may attach to the sale of a used car.