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ZS2 Post – Ordinary

Nov 10, 2010 Michael FroomkinConstitutional Law

John Hart Ely, The Wages of Crying Wolf: A Comment on Roe v. Wade, 82 Yale L.J. 920 (1973).
Michael Froomkin

Michael Froomkin

Category: Constitutional Law.

In Hauter, the warranty was express, although the remedy in the event of injury was not stated, so the court never had to reach the question of whether consequential damages could be limited by contract. The reliance issue is one on which an enormous amount of ink has been spilled. My basic position is that reliance as an independent element should never be relevant where there is privity between the plaintiff and the defendant. The defendant has indicated a willingness to be bound and has been paid to take the risk in question. There is no stipulation for reliance at the time of the agreement and none should be imposed on the plaintiff after the fact. But those cases in which there is no privity represent a very different kettle of fish indeed. If there is no reliance, it is impossible to see how any linkage can take place between the parties if there is neither an intention to be bound by the defendant nor an intention to bind the defendant by the plaintiff. Indeed in my view, the reliance issue here should be decided by the same approach taken by third-party-beneficiary contracts: the former question should be the decisive one: does the defendant have a willingness to be bound? Therefore, in dealing with this line of cases the right question should be: where there is contractual silence, does the creation of the third party action look as though it is, ex ante, for the joint benefit of the parties? Within the context of Hauter, at best U.C.C. 2-313 should switch the burden of proof, and not dispense with reliance altogether.

In Hauter, the warranty was express, although the remedy in the event of injury was not stated, so the court never had to reach the question of whether consequential damages could be limited by contract. The reliance issue is one on which an enormous amount of ink has been spilled. My basic position is that reliance as an independent element should never be relevant where there is privity between the plaintiff and the defendant. The defendant has indicated a willingness to be bound and has been paid to take the risk in question. There is no stipulation for reliance at the time of the agreement and none should be imposed on the plaintiff after the fact. But those cases in which there is no privity represent a very different kettle of fish indeed. If there is no reliance, it is impossible to see how any linkage can take place between the parties if there is neither an intention to be bound by the defendant nor an intention to bind the defendant by the plaintiff. Indeed in my view, the reliance issue here should be decided by the same approach taken by third-party-beneficiary contracts: the former question should be the decisive one: does the defendant have a willingness to be bound? Therefore, in dealing with this line of cases the right question should be: where there is contractual silence, does the creation of the third party action look as though it is, ex ante, for the joint benefit of the parties? Within the context of Hauter, at best U.C.C. 2-313 should switch the burden of proof, and not dispense with reliance altogether.

Test of Tags #2

Nov 10, 2010 Michael FroomkinConstitutional LawAdd a Comment

John Hart Ely, The Wages of Crying Wolf: A Comment on Roe v. Wade, 82 Yale L.J. 920 (1973).

The materials on express warranty show that these warranties are still a possible basis of liability.  Indeed, the manufacturer that wants to give a limited express warranty runs the risk that materialized in Collins: that it is impossible to give a half a loaf. Thus, a warranty which is broader than the law requires (i.e., one that guarantees absolute safety and not simply merchantability) cannot be drafted to exclude consequential damages when the product itself contains no defect.  The Collins decision creates the odd, indeed dangerous, incentive of confining liability to the limits already imposed by law, leaving both manufacturers and consumers the losers.  Expanding coverage has been made too costly.

The materials on express warranty show that these warranties are still a possible basis of liability.  Indeed, the manufacturer that wants to give a limited express warranty runs the risk that materialized in Collins: that it is impossible to give a half a loaf. Thus, a warranty which is broader than the law requires (i.e., one that guarantees absolute safety and not simply merchantability) cannot be drafted to exclude consequential damages when the product itself contains no defect.  The Collins decision creates the odd, indeed dangerous, incentive of confining liability to the limits already imposed by law, leaving both manufacturers and consumers the losers.  Expanding coverage has been made too costly.

The materials on express warranty show that these warranties are still a possible basis of liability.  Indeed, the manufacturer that wants to give a limited express warranty runs the risk that materialized in Collins: that it is impossible to give a half a loaf. Thus, a warranty which is broader than the law requires (i.e., one that guarantees absolute safety and not simply merchantability) cannot be drafted to exclude consequential damages when the product itself contains no defect.  The Collins decision creates the odd, indeed dangerous, incentive of confining liability to the limits already imposed by law, leaving both manufacturers and consumers the losers.  Expanding coverage has been made too costly.

Cite as: Michael Froomkin, Test of Tags #2, JOTWELL (November 10, 2010) (reviewing John Hart Ely, The Wages of Crying Wolf: A Comment on Roe v. Wade, 82 Yale L.J. 920 (1973)), https://zetasec.jotwell.com/test-of-tags-2/.