Daughtrey v. Ashe

Brief Fact Summary.

Plaintiff bought a diamond bracelet from Defendant. Defendant appraised the diamonds as “v.v.s.” Later Plaintiff found out that the diamonds were lower quality and requested that Defendant replace the bracelet with one containing v.v.s. quality diamonds, however, Defendant refused. Plaintiff then brought an action for specific performance to compel Defendant to replace the bracelet. Defendant contended that his statement in the appraisal form was not an express warranty because it was designated “for insurance purposes only,” was a matter of opinion instead of a statement of fact, and was not a part of the basis of the bargain. The trial court agreed with Defendant and denied relief for breach of warranty. Plaintiff appealed.

Synopsis of Rule of Law.

Where a statement of fact describes goods that are the subject of the contract, such description may form part of the basis of the bargain, even where the buyer manifests no reliance on the statement.

Facts.

Daughtrey (Plaintiff) purchased a diamond bracelet from Ashe (Defendant) for a price of $15,000. During the parties’ discussions about the bracelet, Defendant simply described the diamonds as “nice.” However, upon sale, Defendant completed an appraisal form in which the quality of the diamonds was described as “v.v.s.” Later, Plaintiff learned that the diamonds were of a lower quality than v.v.s. He then requested that Defendant replace the bracelet with one containing true v.v.s. quality diamonds, but Defendant refused.

Issue.

Whether a statement of fact describing goods that are the subject of the contract form part of the basis of the bargain, even where the buyer manifests no reliance on the statement.

Held.

Yes. The trial court’s ruling is reversed and the case is remanded for proceedings considering Plaintiff’s damages. Where a statement of fact describes goods that are the subject of the contract, such description may form part of the basis of the bargain, even where the buyer manifests no reliance on the statement.

Discussion.

Reliance on the part of the buyer is not necessary for a statement to be part of the basis of the bargain. As long as a statement of fact, and not an opinion, is at issue, the statement may constitute an express warranty under UCC 2-313. This section of the Uniform Commercial Code replaced an earlier provision that did require reliance, yet the UCC makes no mention of reliance. Instead, the basis of the bargain refers simply to a description of the goods to be sold. In the present case, Defendant’s designation of diamonds as “v.v.s.” quality is a statement of fact, and is not an opinion, as it was made based on Defendant’s superior knowledge and was not qualified as an opinion. Further, it is certain that the v.v.s. quality designation, while not necessarily relied upon by Plaintiff in the original bargain, was a description of the goods to be sold, and accordingly could be sufficient to establish an express warranty under UCC 2-313.