Muther-Ballenger v. Griffin Electronic Consultants, Inc.
100 N.C.App. 505, 397 S.E.2d 247 (1990)
Rule of Law:
A seller's specific affirmations of fact or the display of a sample can create an express warranty that cannot be negated by a general disclaimer. Furthermore, a warranty disclaimer in a separate document only applies to the sales contract if the documents are found to be a single, integrated agreement, and post-sale oral assurances can modify a prior written contract.
Facts:
- Dr. Ellis Muther of Muther-Ballenger informed Jonathan Griffin of Griffin Electronic that his partnership required a CT scanner capable of producing acceptable spinal scans for neurological purposes.
- Griffin assured Muther that the used Pfizer CT Scanner would produce acceptable spinal scans and perform at a level comparable to other specific high-quality machines.
- During an inspection, Griffin showed Muther and his consultant a high-quality spinal scan, representing it was produced by the scanner being offered for sale.
- In reality, the sample scan shown to Muther was produced by a different Pfizer Scanner.
- Relying on these representations and the sample scan, Muther-Ballenger signed an agreement on November 17, 1987, to purchase the scanner.
- Upon installation in February 1988, the scanner failed to produce diagnostically acceptable spinal scans.
- After the agreements were signed and the scanner was installed, Griffin repeatedly told Muther that the scanner would produce the required scans and that its problems could be resolved.
- Muther-Ballenger gave notice of rejection and removed the non-functional scanner from its facility in May 1988.
Procedural Posture:
- Muther-Ballenger (plaintiff) filed a complaint against Griffin Electronic Consultants, Inc. (defendant) in a state trial court.
- The complaint included claims for breach of express warranty, breach of implied warranty of merchantability, and breach of implied warranty of fitness for a particular purpose.
- Defendant moved for summary judgment on the plaintiff's breach of warranty claims, arguing it had effectively disclaimed all warranties.
- The trial court granted summary judgment in favor of the defendant on the warranty claims.
- The plaintiff (appellant) appealed the trial court's order granting summary judgment to the intermediate court of appeals.
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Issue:
Does a general warranty disclaimer, contained in a service agreement signed contemporaneously with a sales quotation, entitle a seller to summary judgment on a buyer's breach of warranty claims as a matter of law, despite evidence of the seller's specific pre-sale representations and post-sale assurances?
Opinions:
Majority - Cozort, J.
No, a seller is not entitled to summary judgment on breach of warranty claims under these circumstances because genuine issues of material fact exist. The seller's pre-sale affirmations of fact and display of a sample scan may have created an express warranty under UCC § 2-313 that a general disclaimer cannot negate; whether they did is a question of fact for a jury. Additionally, a material question of fact exists as to whether the sales 'Quotation' and the separate 'Service Agreement' containing the disclaimer constituted a single, integrated contract or two separate agreements, which determines if the disclaimer even applies to the sale of goods. Finally, the seller's post-sale oral assurances are not barred by the parol evidence rule and could constitute a subsequent modification to the contract, creating another genuine issue of material fact.
Analysis:
This decision reinforces that under the UCC, specific seller representations are difficult to disclaim through general boilerplate language, especially when those representations form the basis of the bargain. It highlights the importance of contract integration, establishing that a disclaimer's effectiveness can be challenged if it is located in a document arguably separate from the primary sales contract. The case also provides a clear application of the parol evidence rule's limits, confirming that it does not bar evidence of subsequent oral modifications, thereby preserving a buyer's ability to enforce post-sale promises made by a seller.
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