Summary of Leal v. Holtvogt (1988)
Facts: P’s were friends with D’s who owned a horse barn; P’s were interested in buying a stallion to breed with their mare; before they agreed to buy the D’s horse, Mc Que Jabask, the D made a number of statements regarding the stallion; the parties entered into a contract of sale for a half-interest in the horse for $16k; P’s became dissatisfied with the arrangement and demanded a refund or a remedy
P/S: Common Pleas court found that D had negligently misrepresented the stallions’ condition, and breached the express warranty, awarding the P’s $16k in compensatory damages.
Issue: whether the transaction between the parties qualifies as a sale, thus creating an express warranty under Ohio Warranty Law.
Holding: Although the transaction involved the sale of only a half-interest in Mc Que Jabask, the transaction was within the definitional requirements of R.C. 1302 and thus is governed by Ohio warranty law.
Issue: Whether the conduct of the D’s amounted to an express warranty.
Holding: No, the D’s puffery did not constitute an express warrant, however, the D’s did breach an implied warranty of fitness for a particular purpose.
Outcome: Court overruled the negligent misrepresentation claim, for D; remanded to determine amount of damages.
Rule: An implied warranty of fitness for a particular purpose is covered by the Uniform Commercial Code, which provides: “Where the seller at the time of contracting has reason to know any particular purpose for which the goods are required and that the buyer is relying on the seller's skill or judgment to select or furnish suitable goods, there is unless excluded or modified under section 1302.29 of the Revised Code an implied warranty that the goods shall be fit for such purpose.”
Rationale: To determine whether an implied warranty of fitness for a particular purpose has been created: (1) the seller must have reason to know of the buyer's particular purpose; (2) the seller must have reason to know that the buyer is relying on the seller's skill or judgment to furnish or select appropriate goods; and (3) the buyer must, in fact, rely upon the seller's skill or judgment. All three elements were proven at trial, so the court concluded that an implied warranty of fitness for a particular purpose was given at the time of the sale.