Vandenberg v. Siter
204 A.2d 494, 2 U.C.C. Rep. Serv. (West) 383, 204 Pa. Super. 392 (1964)
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Rule of Law:
Under the Uniform Commercial Code, a contractual time limitation for a buyer to provide notice of a defect is unenforceable if it is "manifestly unreasonable," particularly when applied to latent defects that are not discoverable within the specified period.
Facts:
- A grower and dealer in Holland (plaintiff) sold tulip and hyacinth bulbs to the defendants (buyers).
- The sales contract warranted the bulbs to be 'sound and healthy at the time of shipment' but disclaimed other warranties on flowering results.
- The contract required that all claims for breach of warranty be presented within eight days after the buyers received the goods.
- The buyers received the bulbs on October 18, 1960, and upon initial inspection, they appeared to be in good condition.
- About a month after receipt, the buyers discovered brown specks on some bulbs.
- Months later, the bulbs failed to flower properly.
- An expert hired by the buyers determined that the bulbs had a latent defect from before shipment—they were 'grown beyond their capacity in Holland'—which was not discoverable by ordinary inspection at the time of delivery.
Procedural Posture:
- The plaintiff, a bulb grower, sued the defendants in a trial court for the unpaid balance of a purchase.
- The defendants filed a counterclaim against the plaintiff, alleging breach of express and implied warranties.
- At trial, the judge excluded all of the defendants' evidence related to the condition of the bulbs more than eight days after delivery.
- The trial court's rulings effectively struck the defendants' defense and counterclaim from the record.
- The jury returned a verdict in favor of the plaintiff for the full amount claimed.
- The defendants (appellants) appealed the judgment to this intermediate appellate court, with the plaintiff as the appellee.
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Issue:
Does a contract clause requiring notice of defects in flower bulbs within eight days of receipt violate the Uniform Commercial Code's reasonableness standard when the alleged defect is latent and not discoverable until months later at flowering time?
Opinions:
Majority - Flood, J.
Yes. A contract clause setting an eight-day notice period is manifestly unreasonable and therefore invalid under the UCC when applied to latent defects that are not discoverable within that time. The seller's express warranty that the bulbs were 'sound and healthy at the time of shipment' implicitly warrants that they were capable of flowering properly, as the 'does not otherwise warrant flowering' clause only protects the seller from issues arising after shipment. Under UCC §1-204, parties may fix a reasonable time for action, but not one that is 'manifestly unreasonable.' A limitation period that expires before a latent defect can be discovered renders the warranty ineffective and is therefore manifestly unreasonable. The evidence of the latent defect and the impossibility of its discovery within eight days should have been admitted, and the reasonableness of the notice period under the circumstances is a question for the jury to decide.
Analysis:
This decision is significant for establishing that the UCC's 'manifestly unreasonable' standard can invalidate contractual time limits for reporting defects, especially in cases involving latent defects. It protects buyers by ensuring that warranties are not rendered illusory by procedural terms that are impossible to meet. The ruling clarifies that the reasonableness of a notice period is a fact-intensive question, often for the jury, preventing sellers from using boilerplate clauses to escape liability for hidden flaws in their products. This precedent reinforces the UCC's broader goal of promoting commercial fairness over rigid adherence to contractual text when that text leads to an unconscionable result.
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