American Fertilizer Specialists, Inc. v. Wood
32 U.C.C. Rep. Serv. (West) 49, 1981 OK 116, 635 P.2d 592 (1981)
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Rule of Law:
Under the Uniform Commercial Code, a product's failure to perform its ordinary function constitutes a breach of the implied warranties of merchantability and fitness for a particular purpose, and a buyer's notice of breach is timely if given within a reasonable period after the defect becomes gradually apparent.
Facts:
- The defendant, a cattleman-rancher, had successfully used a 10-20-10 fertilizer on his grass lands for many years.
- On March 4, 1978, a sales representative for the plaintiff fertilizer dealer, Crawford, persuaded the defendant to purchase a different fertilizer, 'Triple 19', representing it would produce better results at a lower cost.
- Crawford inspected the defendant's land, was informed the land was used for cattle grazing and haying, and confirmed the land was ready for fertilization.
- Relying on Crawford's recommendation, the defendant purchased the Triple 19 fertilizer, which the plaintiff's representative applied to 183 acres of the defendant's land on March 11.
- After the application, the fertilizer produced no visible results; the fertilized land yielded only half its normal hay production and less than adjacent unfertilized land.
- The cattle pastured on the fertilized lands suffered from an adverse health condition not previously observed.
- On April 22, the defendant met with plaintiff's representatives, who acknowledged the fertilizer was 'not doing what it was supposed to do.'
- The defendant stopped payment on the check for the fertilizer and refused to pay.
Procedural Posture:
- The plaintiff, a fertilizer dealer, filed a lawsuit in an Oklahoma trial court against the defendant, a rancher, to collect payment on an open account for fertilizer sold and delivered.
- The defendant asserted the affirmative defenses of breach of the implied warranty of fitness for a particular purpose and breach of the implied warranty of merchantability under the UCC.
- Following a non-jury trial (a bench trial), the trial court entered a general judgment in favor of the defendant.
- The plaintiff (as appellant) appealed the trial court's judgment to the Supreme Court of Oklahoma.
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Issue:
Under the Uniform Commercial Code, does a fertilizer's failure to produce expected crop growth constitute a breach of the implied warranties of merchantability and fitness for a particular purpose, thereby relieving the buyer of the duty to pay, when the buyer provides notice of the failure approximately 42 days after application but only 12 days after the defect should have been discovered?
Opinions:
Majority - Lavender, J.
Yes. A fertilizer's failure to produce expected results constitutes a breach of the implied warranties of merchantability and fitness for a particular purpose, and notice of that breach is considered reasonable if given shortly after the buyer should have discovered the failure. The seller breached the implied warranty of fitness for a particular purpose because its salesman knew the defendant's specific need—to increase grass quality and quantity for grazing and haying—and the defendant relied on the salesman's skill and judgment to select a suitable product. The seller also breached the implied warranty of merchantability because the fertilizer was not fit for its ordinary purpose, which is to promote crop growth. The defendant successfully proved causation by showing it was more probable that the fertilizer's failure caused the poor crop than any other possible cause; circumstantial evidence is sufficient and a buyer does not need to exclude all other possibilities. Finally, the defendant's notice of the breach on April 22 was timely. 'Discovery' of the defect was a gradual realization, not a single event, and notice was given within 12 days of when the expected 30-day results period had ended, which constitutes a reasonable time under the circumstances.
Analysis:
This decision clarifies the application of UCC implied warranties to products whose effectiveness can only be judged over time. It establishes that a buyer can prove causation for a breach of warranty claim using circumstantial evidence, provided it shows the product's failure is the most probable cause of the damage, rather than requiring the exclusion of all other potential causes. The case also provides a flexible, fact-specific standard for what constitutes a 'reasonable time' for notice of a breach, recognizing that for some products, discovery of a defect is a gradual process rather than an instantaneous event. This lowers the evidentiary burden for buyers in similar warranty disputes.
