McCarty v. E. J. Korvette, Inc.
28 Md. App. 421, 347 A.2d 253 (1975)
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Rule of Law:
A seller's limitation of remedies for breach of an express warranty on consumer goods is prima facie unconscionable and unenforceable to the extent it purports to exclude liability for consequential damages for personal injury. A guarantee against a specific product failure, such as a tire blowout, creates an express warranty that is breached when the failure occurs, without the consumer needing to prove a specific defect in materials or workmanship.
Facts:
- On February 25, 1971, Frances McCarty purchased four tires manufactured by Denman Rubber Manufacturing Co. from a Korvettes Tire & Auto Centers retail outlet.
- The sales invoice included a written "All-Road-Hazards Tire Guarantee" stating the tires were "guaranteed for 36,000 miles against all road hazards including ... blow out."
- The guarantee also contained a clause stating, "Neither the manufacturer nor Korvette Tire Centers shall be liable for any consequential damage and our liability is limited solely to replacement of the product."
- On June 14, 1971, after the tires had been driven for approximately 5,500 to 7,000 miles, the right rear tire suffered an alleged blowout while Frances McCarty was driving.
- The blowout caused the vehicle to swerve off the road and overturn, resulting in personal injuries to both Frances and her husband, Warren McCarty, and property damage to their car.
Procedural Posture:
- Frances and Warren McCarty sued E. J. Korvette, Inc., Tires, Inc., and Denman Rubber Manufacturing Co. in the Circuit Court for Baltimore County, a state trial court.
- The plaintiffs' suit alleged breach of express and implied warranties, as well as negligence.
- At the close of the plaintiffs' case during the trial, the trial court judge granted the defendants' motions for directed verdicts.
- A final judgment was entered in favor of all defendants on November 4, 1974.
- The plaintiffs, Frances and Warren McCarty, as appellants, appealed this judgment to the Court of Special Appeals of Maryland, an intermediate appellate court.
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Issue:
Is a contractual clause that limits a consumer's remedy for breach of an express warranty on a tire to replacement, while excluding consequential damages for personal injury, unconscionable and therefore unenforceable under the Uniform Commercial Code?
Opinions:
Majority - Davidson, J.
Yes, such a clause is unconscionable and unenforceable. The guarantee against blowouts for 36,000 miles constituted an express warranty regarding the tires' quality and performance, not merely a promise to replace a failed tire. Under the Uniform Commercial Code (§ 2-719(3)), any clause attempting to limit consequential damages for personal injury in the case of consumer goods is prima facie unconscionable. The defendants presented no evidence to rebut this presumption. It is patently unconscionable for a seller to warrant a product against a dangerous failure like a blowout, which induces a purchase based on safety, and then attempt to limit liability for personal injuries resulting from that very failure to the mere replacement of the product. Therefore, the limitation of remedy clause is deleted in its entirety, allowing the consumers to seek consequential damages for their personal injuries and property damage.
Analysis:
This case solidifies the consumer-protective aspects of the Uniform Commercial Code, particularly regarding express warranties and remedy limitations. It establishes that a performance guarantee (e.g., 'will not blow out') creates an express warranty that is breached simply by the product's failure to perform as promised, relieving the plaintiff of the often difficult burden of proving a specific manufacturing or design defect. The decision strongly reinforces the unenforceability of clauses that exclude personal injury damages for breach of warranty on consumer goods, setting a high bar for sellers who wish to limit liability for safety-related promises. This precedent makes it significantly harder for manufacturers to use contractual fine print to escape responsibility for injuries caused by their products' failures.
