Walden, Dianne McKaig

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University of Kentucky

Kentucky Law JournalVolume 42 | Issue 2 Article 121953Breach of Warranty of Fitness as Failure ofConsideration--Meyer v. LandDianne McKaig WaldenUniversity of KentuckyFollow this and additional works at: https://uknowledge.uky.edu/kljPart of the Commercial Law Commons, and the Consumer Protection Law CommonsRight click to open a feedback form in a new tab to let us know how this document benefitsyou.This Note is brought to you for free and open access by the Law Journals at UKnowledge. It has been accepted for inclusion in Kentucky Law Journal byan authorized editor of UKnowledge. For more information, please contact UKnowledge@lsv.uky.edu.Recommended CitationWalden, Dianne McKaig (1953) "Breach of Warranty of Fitness as Failure of Consideration--Meyer v. Land," Kentucky Law Journal:Vol. 42 : Iss. 2 , Article 12.Available at: https://uknowledge.uky.edu/klj/vol42/iss2/12KENTUcKY LAW JouRNALweapon doctrine to the highest degree of murder would result indestroying the distinction between the two degrees, and thus, in effect,invalidate murder in the first degree.DICK DOYLEBREACH OF WARRANTY OF FITNESS AS FAILURE OFCONSIDERATION-MEYER V. LANDIn determining whether a breach of warranty of fitness for purposeintended can also constitute failure of consideration, we must lookfirst at the nature of the warranty and the instances in which it hasbeen deemed part of the primary consideration.1 Both at commonlaw2 and under the Uniform Sales Act3 an implied warranty of fitnessarises when goods are sold for a specific purpose. That is, when abuyer makes known to the seller the particular purpose for which heneeds certain goods, and relies on the seller's judgment in procuringthe goods, there is an implied warranty that the goods are suitable forthat purpose.4 It is found, however, that in certain instances this con-cept does not provide relief to a vendee who discovers that he haspurchased an article which he cannot use.In England no rescission is permitted for breach of warranty if theproperty in the goods has passed to the buyer.5 Thus, if the vendeefinds his purchases unsuitable for the purpose intended, he must seekrecession under a different theory. This theory is failure of considera-tion. Having had its inception in the law of contracts rather than thelaw of sales, this familiar doctrine was placed in an unusual setting bythe court in the leading case of Young v. Cole.6 In that case certainbonds which the vendor held out to be marketable negotiable instru-ments were, in truth, worthless pieces of paper. Rescission could notI By "primary consideration" the writer is referring to that consideration whichmust be present before a valid agreement can be'effected under basic principles ofcontract law, as distinguished from secondary obligations such as warranties.'MADDEN, UNIFoEM SALEs AcT 25 (1923); HmLLRD, SALms 254 (1860); 4MEcim, SALES 1160 (1901); see also Griffin v. Williams, 305 Ky. 18, 202 S.W.2d 744 (1947).'Uniform Sales Act, sec. 15(1).'Thus, if the requisite reliance is present and the article fails to meet theparticular use for which it was purchased, the buyer can recover damages on thistype of warranty. For example, see Brandenburg v. Samuel Stores, 211 Iowa 1321,235 N.W. 741 (1931) (wherein a fur coat, purchased from a retailer, was foundto be unfit as an article of wearing apparel); also see 46 AM. Jun. 529 et seq.(1943); 2 BENJAMIN, Sales 867 (rev. ed. 1889).'The leading English case is Street v. Blay, 109 Eng. Rep. 1212 (1831);VoLD, SA Es 497 (1931); 3 WILLISTON, SA. s 321 (rev. ed. 1948).'3 Bing. (N.C.) 724, 132 Eng. Rep. 589 (1837) and cases cited therein.NosT~ AND CoummNTsbe given for breach of warranty, but the court held that the vendeewas entitled to regain the money he had paid since the considerationfor which it was given had completely failed. Thus, it would seemthat in Young v. Cole and similar English cases,7 the harsh effect re-sulting from a denial of rescission for breach of warranty when thesale is executed is circumvented by utilizing the concept of failure ofconsideration.A situation in which no recovery is allowed for breach of warrantyarises through express disclaimers of implied warranty." That is, freeto contract as they chose, the parties to an agreement often expresslyexclude the right of recovery under any warranty implied by law.9Express disclaimers have received varying interpretations from dif-ferent courts.10 In many situations the disclaimers, couched in am-biguous and technical terms, are clearly prejudicial to the buyer dueto his unequal bargaining power," and his unfamiliarity with thelegal points involved. Therefore, most jurisdictions have placed astrict construction upon such disclaimers.' 2 In doing so, many courtshave resorted to what amounts to judicial legislation,'3 while othershave again called upon the failure of consideration concept.A question of express disclaimer arose recently in a Kentucky case,Mayer v. Land.14 There the plaintiffs had purchased from the de-fendant certain machinery with which they planned to manufacturemerchantable concrete blocks. The contract of sale stipulated that"There are no understandings, agreements, representations or war-ranties express or implied, not specified herein respecting this order."15The only substantial warranties specified therein concerned defects ofmaterial and workmanship. However, the machinery was wholly in-'3 W.U=ON, SALES 322, n. 18 (rev. ed. 1948).'Uniform Sales Act, sec. 71; 46 Am. Jun. 515-516 (1943); see also VoLU,SAiS 468, esp. n. 84 (1931); 1 WmL ON, SALES 622-624 (rev. ed. 1948).' Some courts have held that any express warranty in a contract of saleexcludes any implied warranty [46 AM. Jun. 516 (1943); 77 C. J. S. 1161 (1952)].See also, 1 WILISTON, SALs 625, n. 16 (rev. ed. 1948). On the other hand, theUniform Sales Act which has been adopted in the majority of states [VoLD, SAT S5 (1931); 46 AM. Jun. 198 (1943)] provides that "An express warranty or con-dition does not negative a warranty or condition implied under this act unless in-consistent therewith" [Uniform Sales Act, sec. 15(6)]. The act does not, however,set forth any standards by which inconsistencies between express and impliedwarranties may be determined [Amram and Goodman, Some Problems on the Lawof Implied Warranty, 3 SYRAcusE L. BEv. 259, 260 (1951-52)]. See also annota-tion 164 A.L.R. 1321 (1946)."Amram and Goodman, Some Problems on the Law of Implied Warranty, 3SmRAcusE L. 1EBv. 259, 260-263 (1951-52).'Comment, 57 YA.LE L. J. 1389, 1400 (1947-48).UVoLD, SALFs 468 (1931).Note, 1 VAiERBmLT L. B. 467, 469 (1947-48)."314 Ky. 514, 235 S.W. 2d 988 (1950).' Id. at 517. 235 S.W. 2d at 990.KENTucy LAw JounNALadequate for the purpose intended and, as found by a jury, would notmanufacture merchantable concrete blocks at all. The plaintiff suedto recover the purchase price, and recovery was allowed, the courtsaying that in contracts of this kind limitation of liability must beplainly expressed; and since the disclaimer was in technical terms,within a long and formidable document prepared by the seller, therequisites had not been met. The court indicated that unless it appearsthat the inclusion of the express disclaimer was fairly procured, thestipulation will not be given effect.The court was not disposed, however, to rest the decision on thisreasoning alone, but applied the failure of consideration concept in amanner comparable to that of the English courts. In the language ofthe court,. . . to sell a man a machine for manufacturing a merchantableproduct that will not accomplish that purpose at all is a breach ofthe contract itself rather than a mere breach of warranty.... If themachine is worthless for the purpose for which it was sold, there is afailure of consideration."'The application of the concept of failure of consideration to salestransactions where the goods are not fit for the purpose intended, al-though unusual on its face and although infrequently used, seems tobe accepted as sound practice today. It is stated by one authority that:As a general rule there is an entire failure of considerationfor a contract of sale, where the goods or property bought is entirelyworthless to either party, or where, although of some value, it wasbought for a particular purpose and is worthless for that purpose."However, only two cases have been found with facts similar toMeyer v. Land wherein the courts' decisions were substantially thesame as that of the Kentucky court and, thus, in line with the rule asset out above. The first of these was also a Kentucky case.18 Therein,the vendee bought an auto-wagon to use on a particular road, only todiscover that the vehicle was unable to pull certain grades. The court,allowing the vendee to rescind despite the express disclaimer in hiscontract, said that the breach "was nonperformance of the contractof sale itself."19In the second case, which arose in Michigan, the plaintiff soughtto rescind his purchase of a second-hand automobile.20 A recovery forbreach of warranty was precluded since implied warranties do not- Id. at 519, 235 S.W. 2d at 991.77 C. J. S. 626 (1952)." International Harvester Co. of America v. Bean, 159 Ky. 842, 169 S.W. 549(1914)."Id. at 848, 169 S.W. at 551.'Bayer v. Winton Motor Car Co., 194 Mich. 222, 160 N.W. 642 (1916).NoTs Am ConmN'sapply to the purchase of second-hand machinery.21 However, the courtheld that the sale was voidable at the purchaser's option, and said that:The claim of total failure of consideration necessarily goeswith and relates to the claim of implied warranty that the article wasreasonably fit and adapted to the purpose for which it was purchased-which was to use as an automobile. =Rescission for failure of consideration has been considered by somecourts to be a proper remedy when the goods were not suitable for thepurpose intended, even where there was no impediment to a suit forbreach of warranty.23 Other cases, although admitting that rescissioncould be had if there were a total failure of consideration, have heldthat there was no total failure unless the equipment was not onlyworthless for the purpose intended but for "any" purpose;2 and thatconsideration has not completely failed if the goods transferred havea junk value.25 Moreover, a case has been found wherein the holdingseems completely contradictory to the failure of consideration concept.There it was said that a breach of warranty does not constitute afailure of consideration, 20 but it is not clear from the opinion whetherthe court deciding that controversy meant that breach of warrantydid not constitute a failure of consideration in that particular case, orcould not in any event.It has been asserted that failure of consideration, being nowhereaccurately defined, is often interposed where a breach of implied war-ranty is the real remedy.21 Admitting that this is true, it is suggestedthat such misapplication was not made in Meyer v. Land. A warrantyis not the consideration for a contract, but a subsidiary obligation.There is oftentimes but a fine distinction between the two. For ex-ample, if a vendee bought "a concrete block machine, that will make600 blocks a day," it might be contended that the machine is the ob-ject purchased and the output merely a subsidiary warranty. But ifhe bought "a concrete block machine that will make 600 blocks a day",the machine with a certain output would be the consideration. There-fore, if the machine with the output were the primary consideration' MEcEm, SALEs 1166 (1901)."Bayer v. Winton Motor Car Co., 194 Mich. 222 at ........, 160 N.W. 642 at643 (1916).Swift and Co. v. Redhead, 147 Iowa 94, 122 N.W. 140 (1909); Bank ofPolk v. Wood, 189 Mo. 92, 186 S.W. 1186 (1916); Bewley-Darst Coal Co. v.Ennis, 169 Ga. 849, 152 S.E. 257 (1930); Holland Furnace Co. v. Gabriel, 102 Pa.578, 157 A. 373 (1931).' Laitner Plumbing and Heating Co. v. McThomas, 61 S.W. 2d 270 (Mo.1933).L. D. Powell Co. v. Sturgeon, (Tex. Civ. App.) 299 S.W. 274 (1927)."J. I. Case Threshing Mach. Co. v. Gidley, 28 S.D. 101, 132 N.W. 711(1911).'MECEI. , SAIES 691 (1901).290 KiNTUcKy LAw JoUmEALand the output was not sufficient, relief could be had either for failureof consideration, or breach of the warranty which, although a promisein itself, is a part of the primary consideration. Relief should begranted either for failure of consideration or breach of warranty whenthe consideration has a dual aspect, but unless the dual aspect is ap-parent, failure of consideration should not be used merely as a meansof circumventing harsh express disclaimers. To do so would be to re-write the contract in the courts.DiANNE McKMiG WALDEN

Breach of Warranty of Fitness as Failure of Consideration--Meyer v. Land

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Breach of Warranty of Fitness as Failure of Consideration--Meyer v. Land

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