Collins v. Uniroyal, Inc.

Brief Fact Summary.

Collins sued Uniroyal, Inc. (Uniroyal) when defective tires supplied by Uniroyal caused a car to flip, ultimately killing her husband.

Synopsis of Rule of Law.

There is a presumption that disclaimers of consequential damages for injuries due to a defective product are unconscionable under the Uniform Commercial Code.

Facts.

Martin bought five tires from Uniroyal, Inc. (Uniroyal) with a disclaimer providing that warranties did not cover consequential damages, as well as limiting Uniroyal’s ability to repair or replace tires. The disclaimer also prevented any express or implied warranties. When one of the tires went out, the car flipped, and Martin died, Martin’s wife (Collins) sued Uniroyal. The trial court granted judgment to Collins and the appellate court affirmed.

Issue.

Whether there is a presumption that disclaimers of consequential damages for injuries due to a defective product are unconscionable under the Uniform Commercial Code?

Held.

Yes. The judgment of the appellate court is affirmed. It is unconscionable for Uniroyal to limit warranties to only fixing or repairing tires because buyers are relying on the warranties to protect themselves from personal injuries.

Dissent.

(Clifford, J.) UCC § 2-719(3) only applies to consumer goods, and the vehicle at issue was used for work travel. UCC § 2-719(3) is overcome because the tire was not proven to have any defect.

Discussion.

There is a presumption that disclaimers of consequential damages for injuries due to a defective product are unconscionable under the Uniform Commercial Code.UCC § 2-719(3) makes it prima facie unconscionable to limit personal-injury consequential damages.