Freeman Oldsmobile Mazda Co. v. Pinson
580 S.W.2d 112, 1979 Tex. App. LEXIS 3398 (1979)
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Rule of Law:
A buyer seeking to rescind a contract and revoke acceptance of goods under the Texas Business & Commerce Code must prove that the goods' nonconformity substantially impairs their value to the buyer. Minor, easily repairable defects do not meet the 'substantial impairment' standard required for this remedy.
Facts:
- Jess F. Pinson purchased a new 1976 Oldsmobile Starfire automobile from Freeman Oldsmobile Mazda Co. for $5,720.33.
- A few days after the purchase, Pinson discovered approximately four small indentations on the hood and some paint overspray on a rear panel.
- The estimated cost to repair these cosmetic defects was between $75 and $100.
- Freeman Oldsmobile offered to repair the defects at no cost to Pinson under the new car warranty.
- Pinson refused Freeman Oldsmobile's offer to perform the free repairs and continued to use the vehicle.
Procedural Posture:
- Jess F. Pinson sued Freeman Oldsmobile Mazda Co. in a Texas trial court, ultimately seeking rescission of the vehicle purchase contract under the Deceptive Trade Practices and Consumer Protection Act.
- Following a nonjury trial, the trial court entered a judgment in favor of Pinson, granting rescission of the contract and ordering a refund of the purchase price upon return of the car.
- Freeman Oldsmobile Mazda Co., as appellant, appealed the trial court's judgment to the Texas Court of Civil Appeals, with Pinson as the appellee.
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Issue:
Does a buyer have the right to rescind a contract for the purchase of a new automobile due to minor, repairable defects that do not substantially impair the vehicle's value to him?
Opinions:
Majority - Raleigh Brown, Justice
No, a buyer does not have the right to rescind a contract for minor, repairable defects that do not substantially impair the vehicle's value. To be entitled to the remedy of rescission by revoking acceptance under Section 2.608 of the Texas Business & Commerce Code, a buyer must plead and prove that the product's nonconformity 'substantially impairs its value to him.' The court reasoned that both historical contract law and modern commercial statutes require a significant defect to justify the drastic remedy of rescission. Pinson failed to provide any evidence that the minor cosmetic defects, repairable for $75-$100, substantially impaired the car's value. As a matter of law, such trivial defects in a $5,720 vehicle do not meet this standard, and therefore Pinson was not authorized to revoke his acceptance and recover the purchase price.
Analysis:
This case clarifies the high threshold for the remedy of rescission in consumer sales contracts governed by the Uniform Commercial Code (as adopted in Texas). It establishes that not every breach of warranty or product defect gives the buyer the right to cancel the entire sale. The decision reinforces the 'substantial impairment' standard, preventing consumers from unwinding transactions over minor issues, especially when the seller offers a reasonable cure like a free repair under warranty. This precedent protects sellers from disproportionate remedies while directing buyers with minor grievances toward remedies like damages for the cost of repair, rather than complete contract cancellation.
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