Henningsen v. Bloomfield Motors

Brief Fact Summary.

Helen Henningsen (Plaintiff), wife of the purchaser, Claus Henningsen, was allowed to recover for personal injury against the dealer, Bloomfield Motors (Defendant) and the manufacturer, Chrysler Corporation.

Synopsis of Rule of Law.

An express warranty, which limits the manufacturer’s liability to replace defective parts is against public policy.

Facts.

In this action for personal injury against the Defendant, the court held that lack of privity would not bar Plaintiff’s suit. The court decision concluding that disclaimer of warranty clause in the contract, which limited warranty protection to the purchaser and to the replacement of defective parts, was invalid.

Issue.

Whether an express warranty which limits the manufacturer’s liability to replace defective parts and which disclaims other express or implied warranties is valid?

Held.

No.
In the absence of fraud, one who does not read a contract before signing it cannot later relieve oneself of its burdens. The conflicting interests of the buyer and seller must be considered giving weight to the social policy, the decisions of the courts, mass production methods of manufacture and distribution, and the bargaining position of the ordinary customer. The purpose of warranties is to safeguard the buyer and not to limit the seller. The motive of the warranty here was to avoid warranty obligations
A traditional contract is the result of free bargaining of parties who were brought together by the play of the market. In such a society there is no threat to the social order, however in present day commercial life the standardized mass contract has appeared. These contracts are when one predominate party will dictate its law to multiple people rather than an individual. The warranty here is a standardized and imposed on the automobile customer on a take it or leave it basis. Thus, the discrepancy in the bargaining powers of the parties is clear. The courts do not have a holding condemning the imposition on the buyer of a standardized warranty as a means of limiting the responsibility of the manufacturer.
The reason a contracting party offering service of a quasi-public nature is held to the requirements of fair dealing and of securing the understanding consent of the consumer, is because members of the public generally have no other means of fulfilling the specific need represented by the contract. Here, the manufacturers are few in numbers and strong in bargaining power. There is no arms length negotiation on issue of liability. Therefore, the express warranty at issue here contravenes public policy.

Discussion.

The seller of mechanical goods, such as appliances and machines, supply various warranty clauses, including: (1) disclaimer of implied warranty; (2) expressly warranty the goods against defects in material and workmanship; (3) limit the buyer’s remedies; (4) limit the time within which claims under the express warranty can be made; and (5) exclude liability for consequential damages.