Ark. Code Ann. § 4-2-719 (2026)

Research References

Ark. L. Notes.

Smolla, What Types of Losses are Recoverable Under Arkansas's Products Liability Law, 1984 Ark. L. Notes 11.

Ark. L. Rev.

Unconscionable Contracts and the Uniform Commercial Code, 20 Ark. L. Rev. 165.

The Legal Kaleidoscope — Products Liability, 21 Ark. L. Rev. 301.

Legislative Note — Act 111 of 1973: An Act to Impose Liability for Injury and Damages Done in Certain Circumstances by Defective Products, 27 Ark. L. Rev. 562.

The Personal Injury Action in Warranty — Has the Arkansas Strict Liability Statute Rendered It Obsolete? 28 Ark. L. Rev. 335.

Comments: The “Battle” of Contract Formation Under the UCC — Win, Lose or Draw?, Chaney, 32 Ark. L. Rev. 528.

Chaney, Comments: Utilization of Disclaimer of Warranty Clauses Under the UCC, 32 Ark. L. Rev. 772.

Case Notes

In General.

A limitation of remedies under this section restricts the remedies available to the buyer once a breach is established. Caterpillar Tractor Co. v. Waterson, 13 Ark. App. 77, 679 S.W.2d 814 (1984).

Evidence.

Provisions in sales contract limiting liability were admissible in breach of warranty suit not as a defense to the action, but to be considered in determining purchaser's right to consequential damages. Kohlenberger, Inc. v. Tyson's Foods, Inc., 256 Ark. 584, 510 S.W.2d 555 (1974).

Exclusive Remedy.

The purpose of an exclusive remedy of replacement or repair of defective parts is to give the seller an opportunity to make the goods conforming, while limiting the risks to which he is subject, by excluding direct and consequential damages that might otherwise arise. From the point of view of the buyer, the purpose of the exclusive remedy is to give him goods that conform to the contract within a reasonable time after a defective part is discovered. When the warrantor fails to correct the defect as promised within a reasonable time, he is liable for a breach of that warranty. Caterpillar Tractor Co. v. Waterson, 13 Ark. App. 77, 679 S.W.2d 814 (1984).

Failure of Essential Purpose.

Where the seller was given reasonable opportunity to correct the defect or defects, and the machinery nevertheless failed to operate as should new machinery free of defects, the limited remedy failed of its essential purpose. Caterpillar Tractor Co. v. Waterson, 13 Ark. App. 77, 679 S.W.2d 814 (1984).

Subsection (2) of this section is to apply whenever an exclusive remedy, which may have appeared fair and reasonable at the inception of the contract, as a result of later circumstances, operates to deprive a party of a substantial benefit of the bargain. Caterpillar Tractor Co. v. Waterson, 13 Ark. App. 77, 679 S.W.2d 814 (1984).

It was proper to instruct the jury on failure of essential purpose, where the evidence established that appellant was in breach of warranty. Caterpillar Tractor Co. v. Waterson, 13 Ark. App. 77, 679 S.W.2d 814 (1984).

A limitation of the remedy to the repair and replacement of nonconforming parts fails whenever the warrantor, given the opportunity to do so, fails to correct the defect within a reasonable period. Great Dane Trailer Sales, Inc. v. Malvern Pulpwood, Inc., 301 Ark. 436, 785 S.W.2d 13 (1990).

Upon failure of seller's limited remedy's essential purpose, buyer was then entitled to any of the buyer's remedies provided by the Uniform Commercial Code, and included among them are consequential damages provided in § 4-2-715. Great Dane Trailer Sales, Inc. v. Malvern Pulpwood, Inc., 301 Ark. 436, 785 S.W.2d 13 (1990).

The “failure of essential purpose” exception is most commonly applied when the buyer's remedy is exclusively limited to repair or replacement of defective goods, and the seller is unable to repair or replace the goods to conform to the warranty. The failure of essential purpose exception is not applicable, where the defendant has not limited plaintiff's remedy to repair or replacement of the defective goods and has only limited its liability for consequential damages. Ciba-Geigy Corp. v. Alter, 309 Ark. 426, 834 S.W.2d 136 (1992).

Unconscionable Limitations.

In an action for breach of implied warranty seeking damages for wrongful death of the driver-owner of a pickup truck alleged to have resulted from a defective axle, a warranty provision providing that the warranty should be fulfilled by the replacement or repair of the defective part was unconscionable within the meaning of subsection (3) of this section. Ford Motor Co. v. Tritt, 244 Ark. 883, 430 S.W.2d 778 (1968).

The only restriction on the limitation or exclusion of consequential damages is that such limitation or exclusion cannot be unconscionable. Gramling v. Baltz, 253 Ark. 352, 485 S.W.2d 183 (1972).

Absent disparity of bargaining power, and with both parties knowledgeable, a contract intentionally and clearly disclaiming liability for loss of profits was not unconscionable. Cryogenic Equip., Inc. v. Southern Nitrogen, Inc., 490 F.2d 696 (8th Cir. 1974).

The issue of unconscionability is one requiring factual development and determination. Young v. American Cyanamid Co., 786 F. Supp. 781 (E.D. Ark. 1991).

Unconscionability must be determined in light of general commercial background, commercial needs in the trade or the particular case, the relative bargaining position of the parties, and other circumstances existing when the contract was made. Ciba-Geigy Corp. v. Alter, 309 Ark. 426, 834 S.W.2d 136 (1992).

Validity of Limitations.

A statement in fine print on a tag attached to the containing bag that warranty of tomato seed was limited to the price of seed and disclaiming liability for the crop was no defense to an action against a seed distributor from whom “Pink Shipper” tomato seed had been ordered by telephone and who shipped seed of another unmarketable variety in a bag labelled in large letters on the tag, “Pink Shippers.” Dessert Seed Co. v. Drew Farmers Supply, Inc., 248 Ark. 858, 454 S.W.2d 307 (1970).

Disclaimer in paragraph dealing with “obligations” and “warranties” purporting to make the repair remedy exclusive was not sufficient as a limitation of remedies, since remedies are not “obligations,” and if manufacturer had intended the repair remedy to be exclusive, it should have stated that intention in express language. Ford Motor Co. v. Reid, 250 Ark. 176, 465 S.W.2d 80 (1971).

Warranty which provided that it was “in lieu of all other warranties, express or implied … and all other obligations or liabilities including liability for incidental and consequential damages” fell short of a limitation and exclusion. Gramling v. Baltz, 253 Ark. 352, 485 S.W.2d 183 (1972).

An otherwise valid limitation of remedy contained in a contract is avoided by the buyer if the limitation fails of its essential purpose or is unconscionable. Caterpillar Tractor Co. v. Waterson, 13 Ark. App. 77, 679 S.W.2d 814 (1984).

Where the contractual language clearly limited the buyer's remedies to the purchase price, and plaintiffs presented no argument that the warranty failed of its essential purpose or is unconscionable, the remedy limitation applied. Jackson v. Swift-Eckrich, 830 F. Supp. 486 (W.D. Ark. 1993).

Cited: Wawak v. Stewart, 247 Ark. 1093, 449 S.W.2d 922 (1970).