Maritime Manufacturers, Inc. v. Hi-Skipper Marina

Per Curiam. This appeal presents two issues for our determination: (1) whether the “where is as is” clause contained in the purchase contract for the forty-seven-foot boat effectively precludes any claim by Hi-Skipper for breach of implied warranty of merchantability; and (2) whether Hi-Skipper is similarly precluded from recovering for breach of implied warranty with regard to the two smaller boats by virtue of its not being the ultimate consumer. We find that Hi-Skipper is precluded from its claim as to the larger boat because of the “as is” clause, but is not precluded from its claims as to the smaller boats. We thus affirm in part and reverse in part. R.C. 1302.29(C)(1) governs the legal ramifications of warranty-preclusion clauses such as the one found in this contract. This section states, in pertinent part: “[U]nless the circumstances indicate otherwise all implied warranties are excluded by expressions like ‘as is,’ ‘with all faults,’ or other language which in common understanding calls the buyer’s attention to the exclusion of warranties and makes plain that there is no implied warranty; * * * Thus, a clause such as “where is as is” would normally preclude any claim of implied warranty breach “unless the circumstances indicate otherwise.” One example of circumstances which “indicate[s] otherwise” would be when the parties understand the term to mean something other than a warranty waiver. There was conflicting testimony in this case as to what the term “where is as is” was intended to mean; however, such questions of fact are for determination by the trial court and must be upheld absent an attitude that is unreasonable, arbitrary and unconscionable. Blakemore v. Blakemore (1983), 5 Ohio St. 3d 217, 219. The appellate court’s unsupported independent determination that “the manufacturer [;sic] of a boat made to order cannot be sold with an exclusion of all implied or express warranties by simply inserting a ‘where is, as is’ clause” is without legal basis in derogation of the express dictates of R.C. 1302.29(C)(1). We therefore find that the “where is as is” clause contained in the purchase order form for the forty-seven-foot boat did preclude a claim [95] based on implied warranty. By the exercise of reasonable care appellees, based upon being warned of the condition of the boat by the “where is as is” language, should have discovered the defects in the construction of the boat. Turning to the second issue, R.C. 1302.271 sets forth the requirements for merchantable goods. A warranty of merchantability is implied in every sale of consumer goods by a seller who is a merchant with respect to those goods sold. It is significant to note that nowhere in this section, nor in any other section of the Revised Code or the Uniform Commercial Code, is there a statement to the effect that only the ultimate consumer may sue for breach of implied warranty of merchantability. Hi-Skipper may claim such a breach with regard to the two smaller boats even though it no longer owns the boats, so long as it can show that it suffered losses. See Altec, Inc. v. FWD Corp. (C.A.5, 1968), 399 F.2d 860. Accordingly, we affirm in part and reverse in part the judgment of the court of appeals. The cause is remanded to the trial court for determination of losses incurred by Hi-Skipper as a result of the implied warranty breach regarding boat No. 31-011.2 A determination is also to be made on remand as to the amount of losses, if any, incurred by Hi-Skipper with respect to the boat No. 31-010. Judgment affirmed in part, reversed in part and cause remanded. Celebrezze, C.J., Locher, Holmes and Wright, JJ., concur. Sweeney, C. Brown and Douglas, JJ., concur in part and dissent in part. Footnotes [1] R.C. 1302.27 states: “(A) Unless excluded or modified as provided in section 1302.29 of the Revised Code, a warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind. Under this section the serving for value of food or drink to be consumed either on the premises or elsewhere is a sale. “(B) Goods to be merchantable must be at least such as: “(1) pass without objection in the trade under the contract description; and “(2) in the case of fungible goods are of fair average quality within the description; and “(3) are fit for the ordinary purposes for which such goods are used; and “(4) run, within the variations permitted by the agreement, of even kind, quality and quantity, within each unit and among all units involved; and “(5) are adequately contained, packaged, and labeled as the agreement may require; and “(6) conform to the promises or affirmations of fact made on the container or label if any. “(C) Unless excluded or modified as provided in section 1302.29 of the Revised Code, other implied warranties may arise from course of dealing or usage of trade.” [2] Uncontroverted expert testimony at trial evidenced the unseaworthiness of boat No. 31-011, resulting in the implied-warranty breach.