This is аn appeal from judgments of the circuit court for Columbia county entered by Judge Howard Latton dismissing this breach of warranty action against defendants Olson Implement Company, Inc., and Super Steel Products Corporation. 1 On December 7, 1981, the court of appeals certified this case to us pursuant to sec. (Rule) 809.61, Stats., for resolution of the following issue: “Is privity of contract necessary to enable a purchaser to maintain an action for economic loss resulting from breach of an express warranty by the defendаnt to the purchaser?” Because we have reached the conclusion that privity existed between the plaintiffs and defendants, we are not presented with the issue posited by the court of appeals. Our finding of privity necessitates that we reach the additional issue of what constitutes reasonable and timely notice in order to finally terminate the time-consuming and costly litigation the parties have endured in this case.
The facts generating this litigation may be summarized as follows: The plaintiff corporation, Breezy Prairiе Farms, Inc., had two stockholders, Ronald Paulson and Kenneth Wachholz, who are neighboring dairy and grain
On March 11, 1976, Olson and Miller returned to the Paulson farm with a written proposal, on a Super Steel form, setting forth the specifications and cost of a seven auger stirator drying bin and a storage bin. No contract was signed or agreement reached on the purchase of the facility, and Olson and Miller left the farm to enable the plaintiffs to discuss the proposal and the financing arrangements. On March 17,1976, the plaintiffs gave Olson a check for $2,000 as a down payment to hold the price on the bin. Plaintiffs were given a receipt which Paul-son described at trial: “It’s got our name across the heading, ‘Breezy Prairie Farm, Columbus, Wisconsin.
Throughout the summer of 1976 Paulson and Wach-holz had contact with Olson regarding whether they would purchase the bin if they obtained additional acreage and whether their crop was coming along well enough tо warrant purchasing the bin. On or about September 20, 1976, Paulson and Wachholz went to Olson’s office and signed an agreement to purchase the drying facility. According to the plaintiffs’ testimony, at the time of the signing of the purchase agreement, Olson affirmed Miller’s earlier representations that the drying equipment would dry 5,000 bushels of corn in a twenty-four-hour period.
After receiving their drying bin, Paulson and Wach-holz dried three or four bins containing 5,000 bushels of corn and discovered that instead of twenty-four hours it took approximately forty to fifty hours to dry. Paul-son phоned Olson to complain about this, and both Miller and Olson stopped by the farm on several occasions in 1976 to discuss any problems with the facility. On one of these occasions, the defendants recommended increasing the drying temperature to alleviate the problem. This was done, but it provide no improvement in the drying time. Olson then replaced a drying fan with a new one from his shop. Paulson testified this “made no difference.”
Paulson testified at trial that in 1977 Miller put a new drying floor in the facility because “[h]e felt the floor was restricting the аir flow.” Plaintiffs continued to have problems drying corn in 1977 and continued to complain to Olson. Wachholz and Paulson stated nothing was done about their complaints and that it took them forty to fifty hours to dry 5,000 bushels of corn. Plain
The failure of the facility to dry 5,000 bushels in twenty-four hours continued into 1978, requiring Paul-son and Wachholz to secure storage space for the corn they could not put in the dryer. This involved considerable expense in hauling and securing off-farm storage. On October 5, 1978, Paulson and Wachholz commenced suit against Olson Implement Company, Inc., Super Steel Products Corporation, and Specialized Products, Inc., 2 alleging breach of warranty as the grain drying unit never dried 5,000 bushels of corn in twenty-four hours. 3
The jury returned a special verdict on August 1, 1980, finding that both Olson Implement Company, Inc., and Super Steel Products Corporation warranted that the drying equipment sold to the plaintiffs had a drying capacity of 4,800 to 5,000 bushels of corn in a twenty-four hour period; that the plaintiffs relied upon this warranty in purchasing the equipment; and that they were damaged as a result of their reliance on the warranty. The trial court, in a decision and order following the verdict, responding to motions by the defendants, dismissed the action against both defendants for the following reasons.
We begin our review of this case with an examination of whether privity existed between Paulson and Wach-holz and defendant Super Steel. Defendant Super Steel bases its defense on lack of privity on the assertion that it was not a party to the September 20, 1976, sales contract between plaintiffs and Olson Implement. 4 Paulson and Wachholz argue that Super Steel was a party to the contract by virtue of Miller’s oral declarations concerning drying capacity, as well as the series of documents which passed between the parties. 5
Regarding the issue of privity, we believe that both parties to this action incorrectly focused upon whether
We find the instant case analogous to the pre-Uniform Commercial Code decision in
Timberland Lumber Co. v. Climax Manufacturing Co.,
“When this fact [that Timberland would not agree to the contract until Climax agreed to guarantee the locomotive] was conveyed to the Climax Company, it replied that it would guarantee the tonnage that the locomotive required would haul. This guarantee the Climax Company intended to be conveyed to the purchaser and it was conveyed to it.”61 F.2d at 393 .
The consideration for Climax’s promises was the contract between Timberland and Vancouver for the purchase of the locomotive.
See
Ruud,
Manufacturers’ Liability for Representations Made By Their Sales Engineers to Subpurchasers,
8 U.C.L.A. L. Rev. 251, 267-70 (1961).
See also Ruberoid Company, Inc. v. Briscoe,
In the case at bar, the jury determined that Super Steel’s agent, Miller,
directly
promised plaintiffs on two occasions that a specially tailored Super Steel grain drying bin would dry their harvest of 5,000 bushels of corn within twenty-four hours. Miller’s statements were obviously made for the purpose of inducing a sale. From the consumers’ perspective in this casе, they believed they had a deal with Super Steel to provide them with a drying machine capable of drying 5,000 bushels in twenty-four hours; they believed they were dealing with both defendants. We conclude that through its actions and express representations Super Steel formed a unilateral contract with the plaintiffs which was accepted and became binding when the plaintiffs signed the sales contract with Olson. That sales contract furnished the un
Super Steel argues before us that, if we should determine a warranty was given, then it effectively disclaimed the warranty by the writing on the reverse side of the unsigned form Miller submitted to the plaintiffs detailing the cost of the grain drying bin. Under “Conditions of Sale,” the following language on which Super Steel rests its argument appears in part:
“SUPER STEEL PRODUCTS CORP. SELLS EQUIPMENT ‘AS IS’ AND MAKES NO WARRANTY OF MERCHANTABILITY OF THE EQUIPMENT OR ITS FITNESS FOR ANY PURPOSE OR USE IN APPLICATION, AND THERE ARE NO WARRANTIES OTHER THAN THOSE SET FORTH BY THE MANUFACTURER OF THE ITEM. NO ONE IS AUTHORIZED TO MAKE ANY WARRANTY, EITHER IMPLIED OR EXPRESS, AS TO THE PERFORMANCE, EFFICIENCY OR OTHER CAPABILITY OF ANY EQUIPMENT THAT HAS NOT BEEN STATED IN THE MANUFACTURER’S WARRANTY.”
Sec. 402.316, Stats., provides for disclaimers of warranties. Sec. 402.316(1), Stats., states: “Words or conduct relevant to the creation of an express warranty and words or conduct tеnding to negate or limit warranty shall be construed wherever reasonable as consistent with each other; . . . negation or limitation is inoperative to the extent that such construction is unreasonable.” Comment 1 to Uniform Commercial Code, sec. 2-316, reveals the following regarding the drafter’s intention with respect to this provision: “ [This section] seeks to protect a buyer from unexpected and unbargained language of disclaimer
by denying effect to such language token inconsistent with language of express warranty
The language on the Super Steel form appears to encompass the implied warranty situation (i.e., “THERE ARE NO WARRANTIES OTHER THAN THOSE SET FORTH BY THE MANUFACTURER”) and further appears to disclaim any warranty, express or implied, made by an agent which is not stated in the manufacturer’s warranty.
We conclude that the disclaimer on the back of the Super Steel form related to its advertised, standard manufactured bins and not to any specially manufaсtured equipment. In other words, the disclaimer pertained to representations of capacity of the standard three auger stirator model which were inconsistent with those detailed in Super Steel’s literature (to dry 2,400 bushels of grain in twenty-four hours). The disclaimer did not apply to the situation where a specially manufactured seven auger stirator facility was warranted by a manufacturer representative to dry 5,000 bushels of grain in twenty-four hours and where the literature was silent on this specially designed equipment.
In the instant case, a jury found thаt the defendants warranted the grain drying equipment to perform to the plaintiffs’ requirements. Even if we determine that the words on the back of the Super Steel form relate to and disclaim Miller's express warranty regarding the capabilities of the specially manufactured equipment, they could not be construed as an effective disclaimer because they would be inconsistent with the express warranty, and they result in unbargained for language and the buyer’s surprise. J. White and R. Summers,
Handbook of the Law Under the Uniform Commercial Code,
431-33
Because wе have found privity between the parties, we are obliged to address the issue of what constitutes sufficient notice of breach of warranty. The trial court dismissed the action against Olson Implement on the ground of lack of notice. 7 Judge Latton concluded: (1) the plaintiffs’ pleading contained no allegation of giving notice, and (2) the delay in giving notice was unreasonable.
Sec. 402.607(3) (a), Stats., requires that a buyer notify a seller of a breach of contract within a reasonable time or be barred from any remedy. In the instant casе, the issue of notice was not presented to the jury. The trial court concluded as a matter of law that the requisite notice had not been provided, and this conclusion we may independently review. The trial court noted that, although the grain drying equipment was installed and used in 1976, the lawsuit was not commenced until October 5,1978.
Examining the trial court’s first proposition that plaintiffs’ complaint was defective as it failed to assert notice, we note that, while the plaintiffs’ complaint and amended complaint may not have been artfully drafted, under our liberal pleading rules we believe the issue of notice was apparent. At paragraph 11 of plaintiffs’ amended complaint the following appears, in part: “That defendants told plaintiff’s [sic] agents [Paulson and Wachholz] the reason the bin was not performing prop
Furthermore, as we concluded in
Hellenbrand v. Bowar,
“Although the notice requirement is а condition precedent to liability and part of the cause of action, it is too late for the defendants now to raise the question as a matter of pleading. Failure to plead notice would be fatal upon demurrer but the parties have gone to trial and to verdict. . . .
“However, the waiver of the pleading does not preclude a challenge to the sufficiency of the evidence to establish a cause of action.”
While defendants failed to challenge the sufficiency of the complaint regarding the issue of notice until after the jury verdict, they may challenge the sufficiency of the evidence of notice on this appeal.
The defendants and the trial court cite several pre-Code cases for the proposition that notice must apprise the seller that the buyer looks to seller for damages for such breach.
Hellenbrand v. Bowar,
supra at
268; Erickson v. Westfield Milling & Electric Light Co.,
263 Wis.
We note that with the adoption of the Uniform Commercial Code, Chapter 401, Stats., this is no longer intended to be a requirement of notice.
See
Annot.,
“The content of the notification need merely be sufficient to let the seller know that the transaction is still troublesome and must be watched. There is no reason to require that the notification which saves the buyer’s rights under this section must include a clear statement of all the objections that will be relied on by the buyer. . . . Nor is there reason for requiring the notification to be a claim for damages or оf any threatened litigation or other resort to a remedy."
Comment 4, U.C.C. sec. 2-607 (emphasis added).
8
While this comment is not law, we find it persuasive authority
In the instant case, the plaintiffs, after they had attempted to dry three or four bins of corn, provided notice within approximately two months following installation of the facility that the grain drying equipment was not performing as expected. This was not unreasonable. See Note, Notice of Breach and The Uniform Commercial Code, supra at 538-40 (“courts balance the equities in determining what is a reasonable time for the giving of notice, and this time may vary considerably depending upon the facts and circumstances of the particular case”). Id. at 540.
The principal reason for requiring notice “is to enable the seller to make adjustments or replacements or to suggest opportunities for cure to the end of minimizing the buyer’s loss and reducing the seller’s own liability to the buyer.” White and Summers,
supra
at 421. Other obvi
In the instant case the record contains numerous instances where Olson and Super Steel went to the Paulson and Wachholz farm and attempted to alleviate the grain drying problems about which plaintiffs repeatedly complained. The defendants inspected the equipment, recommended increasing the drying temperature, Olson replaced a drying fan, and Super Steel’s representative, Miller, installed а new drying floor facility.
9
It appears to us that the purpose of the notice provision, enabling the seller to cure the defect, has been effected. Only after the seller proved unable to remedy the situation did the plaintiffs commence the instant action. There is nothing in the record to indicate that the plaintiffs were not the good faith purchasers which the Uniform Commercial Code seeks to protect through liberal notice requirements. As we view the record, the defendants acknowledged the warranty and their responsibilities under it by attempting to repair the defects of which Paulson and Wachholz complained.
See Boeing Airplane Co. v. O’Malley, supra
(seller attempting to remedy a defect waives right to notice);
Southern California Enterprises, Inc. v. Walter & Co.,
In summary, we have found privity of contract between the plaintiffs Paulson and Wachholz and defendant Super Steel by virtue of Super Steel’s express warranty provided in its unilateral contract with the defendant. We further hold that the plaintiffs satisfied the notice requirements of the statutes.
By the Court. — The judgments of the trial сourt dismissing the defendants from this action are reversed, and the jury verdict against the defendants is reinstated.
Notes
A prior defendant to this action, Specialized Products, Inc., was dismissed from the action on August 25, 1980, for plaintiffs’ failure to support a claim against it. This dismissal is not a part of the appeal before us.
The relationship between the defendants is characterized as follows: Specialized Products manufactures grain stirring devices which Super Steel Products incorporates into grain drying bins. Olson is a dealer distributor who sells Super Steel рroducts, notably grain drying bins.
Both defendants denied ever warranting that the grain drying bin would dry 5,000 bushels of corn in a twenty-four hour period. Olson testified at trial that, when he inspected the grain drying equipment following plaintiffs’ complaints, he discovered plaintiffs were drying 9,000 to 10,000 bushels of corn in each drying lot. Additionally, he testified that he believed plaintiffs’ problems with the drying bin were the result of poor air flow attributable to fines, or foreign matter, in the corn.
Defense counsel argues that: Miller was not an agent of Olson Implement; Olson was not an agent of Super Steel; no representatives of Super Steel ever signed any document; plaintiffs entered into a written agreement with Olson Implement on Olson’s forms; Olson Implement delivered the equipment and passed title to it to the plaintiffs; plaintiffs paid Olson for the equipment.
Plaintiffs assert in their brief: “Supersteel [sic] made the representations which were the basis of the bargain, representations which Olson could not make because it was unfamiliar with Supersteel’s product. Supersteel acquired numerous rights and obligations with relation to the Plaintiffs-Appellаnts as a result of the contract. Supersteel received payment for the equipment indirectly through Olson; Supersteel was obligated to make, and did in fact make, subsequent repairs to the equipment under the contract; Supersteel was obligated to furnish the equipment which it promised during the negotations [sic] surrounding the planning of the unit.” (Citations to record omitted.)
See: 3. Calamari and J. Perillo, The Law of Contracts, 17-18 (2d ed. Hornbook Series 1977). A contract is considered unilateral where only one party has made a promise and only that party is subject to a legal obligation. This is typified by the law school hypothetical situation where A says to B, “ ‘If you walk across Brooklyn Bridge, I promise to pay you ten dollars.’ ” A has made a unilateral contract which arises when — and if — B performs the act.
While we are cognizant that any distinction between unilateral and bilateral (“promise for a promise”) contracts has been largely ignored or abrogated by recent commentators, the instant case is unusual, and we determine the distinction is fitting and applicable.
Defendant Olson Implement also grounded its motion to dismiss оn the contention that there was no evidence of a warranty or representation on its part. Because the trial court found insufficient notice, it did not reach this issue. The jury returned a special verdict, holding that Olson had warranted the equipment, and we find credible evidence in the record to support it.
The argument is advanced that Wisconsin law has retained the distinction between the Uniform Sales Act which required a buyer to notify a seller of ft
claim for damages
and the Uniform Commercial Code which abrogates the need for this.
See
Note,
Notice of Breach and The Uiiiform Commercial Code,
25 U. Pla. L. Rev. 520, 538 (1913). Wis. Stats. Ann. sec. 402.607(3) (a), 353-54 (2d Reprint 1977), states: “It has been held under present law that notification of the breach is a condition to recovery, and
it is immaterial that seller through other means knew of the defect
in the goods, because he is entitled to notice that buyer looks to him for damages.
Despite this ‘looks to him for damages’ requirement which appears in the cases, it is not likely that the present law
Examination of several cases reveals that Wisconsin does not intend a stricter standard.
See Wojciuk v. United States Rubber Co.,
Similarly, in
Kennedy-Ingalls Corp. v. Meissner,
In
Arctic Engineering Corp. v. Harrison,
In contrast to these situations, we deemed notice insufficient in
Marsh Wood Products Co. v. Babcock & Wilcox Co.,
Under the cases we have cited, it is clear that Wisconsin does not utilize a different notice standard than the Code provides. Inherent in notice is the concept of reasonableness. The seller must be informed by the buyer that the buyer considers him (as opposed to others) responsible to remedy a troublesome situation. The Code seeks to eliminate an element of unfair surprise where a seller has not been informed that a situation is troublesome and, therefore, cannot take steps to correct it but only later has a lawsuit filed against him.
The Uniform Commercial Code makes it clear, and the law is well established, that oral notice is sufficient. See: U.C.C. sec, 1-201(26) (1972).
