A plastics manufacturer saw an advertisement for a plastic extruding machine. The manufacturer contacted the seller and made arrangements to inspect the machine at the seller’s place of business. The manufacturer walked around the machine once and stated: “Yes, this looks like what I need.” When the manufacturer asked the price, the seller stated a price that was less than half the amount a similar, functioning, used machine commanded on the market. The manufacturer was surprised at the low price, but did not inquire as to the reason. The seller encouraged the manufacturer to perform a closer inspection before finalizing the purchase and offered to open the motor housing so that the motor could be examined, but the manufacturer declined. The parties completed the sale. The manufacturer transported the extruding machine to his factory. When it arrived, he first learned that the motor was burned out and required complete replacement, as was readily apparent upon visual inspection of it. Replacement of the motor would cost roughly the amount the manufacturer had paid for the machine. The manufacturer contacted the seller to return the machine, but the seller refused. The manufacturer filed suit against the seller.
Will the manufacturer prevail?
A. Yes, because the seller violated the implied warranty of merchantability by selling a machine with a burned-out motor.
B. Yes, because the manufacturer’s unilateral mistake regarding the condition of the machine was caused by the seller.
C. No, because the seller made no claims regarding the operability of the machine.
D. No, because the manufacturer waived any implied warranties by failing to inspect the machine.
Incorrect: Answer choice D is correct. Under UCC Article 2, a warranty of merchantability is implied whenever the seller of goods is a merchant. To be merchantable, goods must be fit for their ordinary purpose and pass without objection in the trade. A breach of this warranty must have been present at the time of the sale. However, if the buyer, before entering into the contract, has examined the goods as fully as the buyer desires, or has refused to examine the goods, there is no implied warranty with respect to defects that an examination would have revealed to the buyer. Here, the manufacturer declined to closely inspect the machine, even after learning of the unusually low sales price. Had he done so, he would have discovered the damaged motor when he opened the motor housing, which the seller had offered to do. Because the manufacturer refused to examine the goods, he waived any implied warranty of merchantability that would have otherwise attached to the sale. Answer choice A is incorrect because the manufacturer waived the implied warranty of merchantability when he declined to inspect the machine. Answer choice B is incorrect because the seller did not cause the manufacturer’s unilateral mistake; rather, the seller offered to open the motor housing, and the manufacturer declined the offer. Answer choice C is incorrect because the warranty of merchantability is implied in all sales of goods and need not be expressly stated by the seller. If the defect could not have been uncovered by a reasonable inspection, the manufacturer would have had a valid claim against the seller for violation of the implied warranty of merchantability, even though the seller had not expressly made any such claims.
Anyone have beef with this question. No where does it suggest the person is a merchant all it says is a seller. I selected C thinking it was the best answer because the party was not a merchant.