Zabriskie Chevrolet v. Smith
99 N.J. Super. 441, 240 A.2d 195 (1968)
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Rule of Law:
Under the Uniform Commercial Code, a buyer may rightfully reject goods that are so defective upon delivery that their value is substantially impaired. A seller's right to cure a non-conforming tender is limited and does not allow the seller to force a buyer to accept a new automobile with a major component, such as the transmission, replaced with a non-factory original part.
Facts:
- On February 2, 1967, Alfred J. Smith signed a purchase order with Zabriskie Chevrolet, Inc. for a new 1966 Chevrolet Biscayne sedan, which was represented as being brand-new and in perfect operating condition.
- Smith paid a deposit of $124 and later provided a check for the remaining balance of $2,069.50.
- On the evening of February 10, 1967, Smith's wife took delivery of the vehicle.
- While driving home, about 7/10 of a mile from the dealership, the car's transmission failed, causing it to repeatedly stall and become undrivable in normal gear.
- Smith's wife had to operate the vehicle in 'low-low' gear at a maximum speed of 5-10 mph to get it home.
- That same evening, Smith immediately stopped payment on the check and notified Zabriskie Chevrolet that he was cancelling the sale due to the defect.
Procedural Posture:
- Zabriskie Chevrolet, Inc. (plaintiff) sued Alfred J. Smith (defendant) in the Superior Court of New Jersey, Law Division, a court of first instance.
- Plaintiff sought to recover the balance of the purchase price for the automobile.
- Defendant asserted a counterclaim for the return of his deposit.
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Issue:
Does a buyer rightfully reject a new automobile under the Uniform Commercial Code when it becomes inoperable due to a defective transmission almost immediately after delivery, thereby invalidating the seller's subsequent attempt to 'cure' the defect by replacing the transmission?
Opinions:
Majority - Doan, J.D.C.
Yes. A buyer rightfully rejects a new automobile when a substantial defect renders it inoperable almost immediately after taking possession, and this rejection is not overcome by the seller's attempt to 'cure' by substituting a major component. The court reasoned that a buyer has not legally 'accepted' goods under U.C.C. § 2-606 until there has been a 'reasonable opportunity to inspect' them. For a complex item like a car, this opportunity extends beyond a brief test drive and includes the first few miles of operation. Smith discovered the nonconformity and rejected the vehicle well within this reasonable period. The court further held that the seller's right to 'cure' under U.C.C. § 2-508 is not limitless. A 'cure' must provide a conforming good that is within the contemplation of the parties' original agreement. Substituting the transmission of a brand-new car with one of 'unknown lineage' from another vehicle does not constitute a valid cure, as it fails to deliver the 'new car' bargained for and shakes the buyer's faith in the vehicle's integrity, thereby substantially impairing its value.
Analysis:
This case is significant for its pro-consumer interpretation of the Uniform Commercial Code's provisions on acceptance, rejection, and a seller's right to cure. The court established the 'shaken faith' doctrine, which holds that a cure is ineffective if the nature of the defect and the proposed repair are so substantial that they destroy the buyer's confidence in the integrity and value of the goods. This decision limits a seller's ability to force a buyer to accept a repaired or 'patched-up' product when they contracted for a new, factory-perfect one. It sets a precedent that for major consumer goods like automobiles, the seller’s cure must not only fix the mechanical issue but also restore the product to a state that conforms to the buyer's reasonable expectations of a new item.
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