Keith v. Buchanan
173 Cal.App.3d 13, 220 Cal. Rptr. 392 (1985)
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Rule of Law:
Under the California Uniform Commercial Code § 2313, a seller's affirmation of fact about goods is presumed to be part of the basis of the bargain, creating an express warranty. The burden of proof is on the seller to show that the buyer's bargain did not rest on the representation, rather than on the buyer to prove actual reliance.
Facts:
- Brian Keith, an experienced sailor but first-time yacht owner, became interested in purchasing an 'Island Trader 41' sailboat for long-distance cruising.
- In October 1978, Keith attended a boat show where he obtained sales brochures for the vessel.
- The brochures described the sailboat as 'a picture of sure-footed seaworthiness' and 'a carefully well-equipped, and very seaworthy live-aboard vessel.'
- Keith also discussed his desire for an ocean-going vessel with a sales representative.
- Before purchasing, Keith had his friend Buddy Ebsen, who was experienced in boat building, inspect the vessel.
- Ebsen and an associate advised Keith that the boat would suit his stated needs.
- In November 1978, Keith entered into a contract to purchase the sailboat for $75,610.
- After the vessel was delivered, a dispute arose regarding its seaworthiness.
Procedural Posture:
- Brian Keith filed a lawsuit against the defendants (sellers) in the trial court, alleging breach of express and implied warranties.
- At the close of the plaintiff's case during trial, the defendants made a motion for judgment.
- The trial court granted the defendants' motion, finding that no express warranty was created because the sellers' statements were mere opinion and that no implied warranty of fitness was created because Keith relied on his own experts.
- Keith, as the appellant, appealed the trial court's judgment to this intermediate appellate court.
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Issue:
Under California Uniform Commercial Code § 2313, must a buyer prove actual reliance on a seller's affirmation of fact for that statement to become part of the basis of the bargain and create an express warranty?
Opinions:
Majority - Ochoa, J.
No. Under the California Uniform Commercial Code, a buyer need not show actual reliance on a seller's affirmation of fact for it to become part of the basis of the bargain. Affirmations of fact made by a seller are presumptively part of the bargain, and the seller bears the burden of providing clear, affirmative proof that the representation was not a factor that induced the purchase. The court reasoned that the language 'part of the basis of the bargain' in § 2313 purposefully replaced the older, stricter requirement of 'reliance.' Therefore, any affirmation of fact, such as the brochure's statement that the vessel was 'seaworthy,' is presumed to be woven into the agreement. Keith's inspection by his own experts did not negate this warranty because it was a limited inspection and could not have discovered issues of seaworthiness that only become apparent at sea. The court, however, affirmed the trial court's finding that no implied warranty of fitness for a particular purpose was created, as that warranty does require buyer reliance on the seller's skill and judgment, and the evidence showed Keith relied on his own experts.
Analysis:
This case significantly clarifies the 'basis of the bargain' test for express warranties under the California Uniform Commercial Code. By shifting the burden of proof from the buyer to the seller regarding reliance, the decision strengthens consumer protection. It makes it easier for buyers to hold sellers accountable for specific claims made in advertising and sales literature, as those claims are now presumed to be part of the deal. The ruling requires sellers to be more cautious about their factual representations, as they can no longer easily defeat a warranty claim by arguing the buyer did not specifically rely on a particular statement.
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