Moore v. Pro Team Corvette Sales, Inc.
786 N.E.2d 903, 152 Ohio App. 3d 71 (2002)
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Rule of Law:
To effectively disclaim the implied warranty of title under U.C.C. § 2-312, a contract's language must be specific and unambiguous, clearly stating what title the seller purports to transfer, rather than merely limiting the seller's liability in negative terms.
Facts:
- In October 1994, Bryon Moore went to Pro Team Corvette Sales, Inc. (“Pro Team”) to purchase a vehicle.
- On October 17, 1994, Moore signed an agreement to purchase a 1974 Chevrolet Corvette from Pro Team.
- The purchase agreement contained a clause stating: 'All warranties pursuant to O.R.C. 1302.25 (U.C.C.2-312) (warranty of title and against infringement) are hereby excluded from this transaction.'
- After the purchase, Moore attempted to register the car with the Michigan Bureau of Motor Vehicles.
- During the registration process, Moore learned that the car had been reported stolen in Texas.
- Subsequently, the Michigan State Police confiscated the vehicle from Moore and returned it to Texas.
Procedural Posture:
- On October 15, 1996, Bryon Moore filed a lawsuit against Pro Team Corvette Sales, Inc. in the Henry County Common Pleas Court, a trial court.
- Moore's complaint included claims for breach of statutory warranties.
- Pro Team denied liability, asserting that the purchase agreement excluded all warranties, including the warranty of title.
- Moore moved for summary judgment, arguing the contract language was insufficient to disclaim the warranty of title, but this motion was denied.
- Moore subsequently dismissed all of his claims except for the one concerning the warranty of title.
- In February 2002, the trial court dismissed Moore's remaining claim, concluding the contract language was sufficiently specific to exclude the warranty of title.
- Moore, as the appellant, appealed the trial court's dismissal to the Court of Appeals of Ohio.
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Issue:
Does contract language stating that 'All warranties pursuant to O.R.C. 1302.25 (U.C.C.2-312) (warranty of title and against infringement) are hereby excluded' constitute 'specific language' sufficient to disclaim the implied warranty of title under the statute?
Opinions:
Majority - Walters, Judge
No. The provision lacks sufficient specificity to disclaim the implied warranty of title. R.C. 1302.25 (UCC 2-312) requires 'specific language' to exclude or modify the warranty of title because a buyer normally expects to acquire a good, clean title and views general disclaimers as relating only to the quality of the goods, not the title. The court reasoned that 'very precise and unambiguous language' is required to overcome this expectation. The language used by Pro Team—'All warranties... are hereby excluded'—is a negative statement of liability limitation, rather than an affirmative statement about what title, or lack thereof, the seller is purporting to transfer. Citing precedent, the court distinguished this ineffective language from an effective disclaimer, such as one stating the buyer 'assumes all risks of nonownership.' Therefore, a clause that expresses how a seller's liability will be limited, rather than what title is being conveyed, is insufficient to disclaim the warranty of title.
Analysis:
This decision reinforces the high standard required to disclaim the implied warranty of title, which is considered a fundamental aspect of a sales contract. It clarifies that boilerplate language or a mere statutory reference is insufficient; the disclaimer must be explicit and direct, putting the buyer on clear notice about the potential defects in title. The ruling protects consumers from ambiguous contract terms that could obscure the significant risk of purchasing goods with an encumbered or non-existent title. Consequently, sellers seeking to make such a disclaimer must now use affirmative language that describes the limited nature of the title being sold, shifting the focus from avoiding liability to providing clear information to the buyer.
