Warranties Case Problem

LAW001 Business Law 1

Week 13 Assignment 2

Warranties Case Problem

Chapter 23 –  Warranties

A. Read the case Rothing v Kallestad (Links to an external site.).

 B. Study the Whiteboard (Links to an external site.) and

ProfJ video (Links to an external site.)

C.  Carefully explain in your own words (paraphrase and do not copy from the case) the following statements.

“In the instant case, the Rothings’ purchase of hay from Kallestad was a transaction in goods, thus it may be governed by Montana’s Uniform Commercial Code (UCC) pertaining to sales if it meets the other requirements of Title 30, Chapter 2, Montana Code Annotated (1999).”

“In addition to the requirement that the transaction consist of the sale of ‘goods,’ the seller must meet the definition of a ‘merchant.’ A ‘merchant’ under the UCC ‘means a person who deals in goods of the kind or otherwise by his occupation holds himself out as having knowledge or skill peculiar to the practices or goods involved in the transaction . . . .’ Section 30-2-104(1), MCA. Whether or not a person qualifies as a merchant under the UCC is a mixed question of law and fact. Smith, 291 Mont. at 430, 968 P.2d at 726 (Links to an external site.) (citing Dawkins & Co. v. L & L Planting Co., 602 So. 2d 838, 843 (Miss. 1992) (Links to an external site.)).”

“Here, Kallestad would have breached the Implied Warranty of Merchantability if the trial court determines that the goods were not “fit for the ordinary purposes for which such goods are used,” i.e., as feed for livestock.”

” Prior to the advent of the UCC, the common law concept of ‘implied warranty’ developed in cases of food stuffs sold for immediate human consumption where “a warranty of soundness or wholesomeness will be implied.” Larson v. Farmers Warehouse Co., 297 P. 753, 754 (Wash. 1931) (Links to an external site.). Courts extended the concept of implied warranty to products to be fed to livestock, but initially limited its application to ‘processed and packaged’ food. See, e.g., Midwest Game Co. v. M.F.A. Milling Co., 320 S.W.2d 547, 550 (Mo. 1959) (Links to an external site.) (attaching implied warranty where the animal food ‘is not in its raw state but has been processed and packaged by the manufacturer’).”

“Furthermore, Article 2-715(2)(b), does not contain a foreseeability requirement, thus a seller ‘is liable for injury to person or property even if the seller did not know of or have reason to know of the buyer’s intended use.'”

Explain who won the case, and provide the main legal reasoning.