O.C.G.A. § 11-2-714 (2019)

Annotations

Law reviews. For comment on Felder v. Neeves, 36 Ga. App. 41, 135 S.E. 219 (1926) , see Ga. L. Rev. No. 1 P. 51 (1927). For note, “Buyer’s Right to Revoke Acceptance Against the Automobile Manufacturer for Breach of its Continuing Warranty of Repair or Replacement,” see 7 Ga. L. Rev. 711 (1973).

For article comparing consumer remedies under the Magnuson-Moss Act (15 U.S.C. §§ 2301-2312) and the U.C.C., see 27 Mercer L. Rev. 1111 (1976). For article discussing the applicability of warranty provisions under the Uniform Commercial Code to domestic solar energy devices, see 30 Mercer L. Rev. 547 (1979). For comment, “Damage Awards and Computer Systems - Trends,” see 35 Emory L.J. 255 (1986).

SALES JUDICIAL DECISIONS ANALYSIS

GENERAL CONSIDERATION BREACH OF WARRANTY CONSEQUENTIAL DAMAGES General Consideration Editor’s notes. - In light of the similarity of the statutory provisions, decisions under former Code 1933, §§ 96-201 and 96-301 are included in the annotations for this Code section. Applicability of section. - O.C.G.A. § 11-2-714 applies only where a buyer claims breach of contract regarding accepted goods; breaches based on grounds of rejection, revocation of acceptance, or rescission of agreement are not covered by that section. Wolfes v. Terrell, 173 Ga. App. 835, 328 S.E.2d 569, 1985 Ga. App. LEXIS 1704 (1985). O.C.G.A. § 11-2-714 applies only when time for revocation has passed. Solomon Refrigeration, Inc. v. Osburn, 148 Ga. App. 772, 252 S.E.2d 686, 1979 Ga. App. LEXIS 1653 (1979). Repurchase offer agreed to as part of agreement. - Where it was determined that parties had agreed upon repurchase offer of seller in event of dissatisfaction of buyer as part of enforceable agreement, enforcement of such offer was reasonable measure of recovery under O.C.G.A. § 11-2-714(1). All-Co Drainage & Bldg. Prods., Inc. v. Umstead Enters., Inc., 123 Ga. App. 244, 180 S.E.2d 250, 1971 Ga. App. LEXIS 1179 (1971). Suit based on contract and warranty grounds. - Buyers of an irrigation system who did not frame their suit or their proof merely on grounds of breach of warranty, but pleaded breach of contract as well, were therefore not restricted to the requirements of O.C.G.A. § 11-2714(2) as to proof of damages in cases of breach of warranty in commercial transactions. Dick ’N Dale Sys., Inc. v. Danwil Int’l Trading Co., 199 Ga. App. 840, 406 S.E.2d 270, 1991 Ga. App. LEXIS 683 (1991). Distinction between contract induced by fraud and breach of warranty. - There is a distinction to be drawn between a contract induced by

fraud and mere breach of warranty; in the former case title does not pass, and contract may be rescinded, and in the latter case title does pass, and purchaser is relegated to a claim for damages. Dove v. W.L. Roberts & Co., 50 Ga. App. 321, 178 S.E. 169, 1935 Ga. App. LEXIS 304 (1935) (decided under former Code 1933, § 96201). Breach of Warranty Having rescinded or abandoned contract, buyer could not recover for breach of warranty under it. Allen Housemovers, Inc. v. Allen, 135 Ga. App. 837, 219 S.E.2d 489, 1975 Ga. App. LEXIS 1844 (1975). Proof of defect and resulting damages is prerequisite to recovery. - To recover in warranty, it is necessary that plaintiff show: (1) goods in question were defective upon delivery, and (2) such defect caused damage claimed. In cases of this type, proof of defective quality of goods is prerequisite to recovery. Multivision N.W., Inc. v. Jerrold Elecs. Corp., 356 F. Supp. 207, 1972 U.S. Dist. LEXIS 12545 (N.D. Ga. 1972). Proof as to value of warrantied vehicle and vehicle as delivered is required. - Motor home seller’s renewed motion for judgment as a matter of law was denied in part because buyers presented sufficient evidence to support their claim for damages arising out of company’s breach of implied warranty; to establish their damage claims under O.C.G.A. § 11-2-714(2); buyers established both the motor home’s value as warranted and its value as delivered to them. Gill v. Bluebird Body Co., No. 5:02-CV-328, 2005 U.S. Dist. LEXIS 4611 (M.D. Ga. Jan. 21, 2005). Defect alone not enough. - Evidence that goods were defective cannot alone establish evidence of damages. Dixon Dairy Farms, Inc. v. Conagra Feed Co.,

Breach of Warranty (Cont’d) 245 Ga. App. 836, 538 S.E.2d 897, 2000 Ga. App. LEXIS 1104 (2000). Goods confiscated as stolen property. - Where plaintiff proved not only the price paid for two trucks and the lending bank’s appraisal of value, but also that what plaintiff accepted were stolen trucks for which plaintiff owed an interest-bearing note to the bank, undifferentiated damages awarded as the foreseeable and logical consequence of the breach were authorized. Hudson v. Gaines, 199 Ga. App. 70, 403 S.E.2d 852, 1991 Ga. App. LEXIS 378 (1991). Counterclaim for breach of warranty and refusal to pay for nonconformity not redundant. - In suit to recover on purchase order, the trial court errs in striking a counterclaim for breach of warranty because it is allegedly redundant in view of an affirmative defense of right to refuse payment because of nonconformity. Bingham, Ltd. v. Tool Technology, Inc., 166 Ga. App. 220, 303 S.E.2d 761, 1983 Ga. App. LEXIS 2106 (1983). Value for allegedly defective goods required. - An award of damages for breach of warranty could not be sustained, where plaintiff was never able to establish any value for an allegedly defective van at the time and place of delivery except that value indicated by the price that plaintiff paid for it. Chrysler Corp. v. Marinari, 177 Ga. App. 304, 339 S.E.2d 343, 1985 Ga. App. LEXIS 2583 (1985). Damages for breach of new car warranty. See Horne v. Claude Ray Ford Sales, Inc., 162 Ga. App. 329, 290 S.E.2d 497, 1982 Ga. App. LEXIS 2156 (1982). Owners failed to present competent evidence of damages under O.C.G.A. § 11-2714(2) because an owner’s affidavit lacked a proper foundation as the owner failed to testify that any of the past purchases included the purchase of a vehicle with the defects at issue, the owner did not have any specialized knowledge, and the owner’s testimony was not supported by objective information on vehicles found in published valuation guides, such as the “Blue Book”; the value of the defective vehicle could not be established by the repair invoices as few, if any, of the repairs

reflected costs incurred by the owners. Hill v. Mercedes-Benz USA, LLC, 274 Ga. App. 826, 619 S.E.2d 353, 2005 Ga. App. LEXIS 853 (2005). Because a manufacturer did not admit a customer’s prima facie case for breach of warranty under O.C.G.A. § 11-2-714(2), the trial court erred in denying the manufacturer the right to open and close the final argument under Ga. Unif. Super. Ct. R. 13.4 and O.C.G.A. § 9-10-186. Kia Motors Am., Inc. v. Range, 276 Ga. App. 360, 623 S.E.2d 514, 2005 Ga. App. LEXIS 1092 (2005). Damages for breach of implied warranty of merchantability. - For breach of seller’s implied warranty of merchantability purchaser may recover: (a) reasonable expense of operating or attempting to operate the machine or equipment, provided none of the expense is incurred after discovery of fact that it could not be made to operate properly; (b) reasonable cost of making repairs or correcting defects if incurred by seller, or if, by reason of breach or defects the machine or equipment cannot be made to operate properly by making repairs or correcting defects; (c) difference between amount paid and value of the chattel; (d) loss of profits resulting from breach, if not speculative; and (e) any damage to person or property directly traceable to the breach. Taylor v. Wilson, 109 Ga. App. 658, 137 S.E.2d 353, 1964 Ga. App. LEXIS 948 (1964) (decided under former Code 1933, § 96-301). Proof of damages. - Because the buyers provided an insufficient foundation for a lay opinion concerning the diminished value of a vehicle under O.C.G.A. § 11-2-714(2), the trial court did not err in granting summary judgment to the automobile manufacturer on the buyers’ warranty claims. Hill v. MercedesBenz USA, LLC, 274 Ga. App. 826, 619 S.E.2d 353, 2005 Ga. App. LEXIS 853 (2005). Repair costs. - While some cases hold that repair costs are a sufficient measure of damages, there are others holding the opposite view; the basic rule is that the measure of damages for breach of warranty is to be determined by O.C.G.A. § 11-2-714. Whether repair costs can satisfy the proof requirement depends entirely on the sufficiency and reliability of the evidence presented in the context of

the individual case. Fried Group, Inc. v. Sundance Tractor & Mower, 218 B.R. 247, 1998 Bankr. LEXIS 193 (Bankr. M.D. Ga. 1998). Under Fed. R. Evid. 701, the buyer of motor home could give lay testimony as to market value of motor home following repairs performed by the seller and the buyer’s market value opinion was relevant because the seller conceded that the market for the type of motor home at issue was extremely individualized and the buyers represented half of the entire market for that type of motor home during the year that it was purchased; the sales contract was relevant evidence on the issue of damages because the purchase price of the motor home was evidence of its value as warranted. Gill v. Bluebird Body Co., No. 5:02-CV-328, 2005 U.S. Dist. LEXIS 4611 (M.D. Ga. Jan. 21, 2005). Consequential Damages Lost profits. - Loss of profits from destruction or interruption of established business may be recovered if amount of actual loss is rendered reasonably certain by competent proof. Each case must be examined to see if under its particular facts the profits involved are capable of reasonable ascertainment. United States ex rel. Fram Corp. v. Crawford, 443 F.2d 611, 1971 U.S. App. LEXIS 11073 (5th Cir. 1971). Lost profits, if supported by proper proof, are recoverable as consequential

damages from a breach of warranty. Multivision N.W., Inc. v. Jerrold Elecs. Corp., 356 F. Supp. 207, 1972 U.S. Dist. LEXIS 12545 (N.D. Ga. 1972). Value of car not established for purposes of determining damages. - Buyer did not produce admissible evidence of actual damages sufficient to preclude summary judgment as evidence that a car was defective, alone, did not establish the value of the goods as accepted for purposes of determining damages for breach of warranty; the trial court did not abuse its discretion in finding that the buyer’s affidavit did not show a sufficient opportunity for forming a correct opinion as to damages and a proper basis for expressing the buyer’s opinion. Ficklin v. Hyundai Motor Am., Inc., 272 Ga. App. 61, 611 S.E.2d 732, 2005 Ga. App. LEXIS 217 (2005). Exclusion of damages not unconscionable. - After a car owner brought a breach of warranty claim under the Magnuson-Moss Warranty Act, 15 U.S.C. § 2301 et seq., the trial court erred in denying a car manufacturer’s motion to exclude evidence of incidental and consequential damages, as recovery of those damages was excluded by the vehicle’s warranty, pursuant to O.C.G.A. §§ 11-2714(3) and 11-2-715, and the exclusion was not found to be unconscionable. Lee v. Mercedes-Benz USA, LLC, 276 Ga. App. 28, 622 S.E.2d 361, 2005 Ga. App. LEXIS 1022 (2005).

RESEARCH REFERENCES Am. Jur. 2d. 63 Am. Jur. 2d, Products Liability, §§ 217, 218. 63B Am. Jur. 2d, Products Liability, §§ 1881, 1883, 1931, 1932. 67A Am. Jur. 2d, Sales, §§ 1297-1309. Am. Jur. Pleading and Practice Forms. 6 Am. Jur. Pleading and Practice Forms, Commercial Code, § 2:747. U.L.A. Uniform Commercial Code (U.L.A.) § 2714. ALR. Right of dealer against his vendor in case of breach of warranty as to article

purchased for resale and resold, 64 A.L.R. 883. Acceptance after agreed time of delivery as waiver of damages on account of seller’s delay, 80 A.L.R. 322. Rights of parties to conditional sale as affected by breach of warranty, 130 A.L.R. 753. Buyer’s acceptance of part of goods as affecting right to damages for failure to complete delivery, 169 A.L.R. 595. Measure and elements of recovery of buyer rescinding sale of domestic animal for seller’s breach of warranty, 35 A.L.R.2d 1273.

Application of warranty provisions of Uniform Commercial Code to bailments, 48 A.L.R.3d 668. Measure and elements of buyer’s recovery upon revocation of acceptance of goods under UCC § 2-608(1), 65 A.L.R.3d 388. Elements and measure of damages for breach of warranty in sale of horse, 91 A.L.R.3d 419.

Measure of damages in action for breach of warranty of title to personal property under UCC § 2-714, 94 A.L.R.3d 583. Modern status of rule as to whether const of correction or difference in value of structures is proper measure of damages for breach of construction contract, 41 A.L.R.4th 131.