O.C.G.A. § 11-2-715 (2019)

Annotations

Law reviews. 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 rem-

edies 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).

JUDICIAL DECISIONS ANALYSIS GENERAL CONSIDERATION LOST PROFITS General Consideration Editor’s notes. - In light of the similarity of the statutory provisions, decisions under former Code 1933, § 96-301

are included in the annotations for this Code section. O.C.G.A. § 11-2-715 does not displace principles of law and equity

concerning contribution and indemnity, being silent on that subject; and consequently, general law on contribution and indemnity found in cases and in other provisions of the Georgia Code continues to supplement provisions of the Uniform Commercial Code. Wilson v. Dodge Trucks, Inc., 238 Ga. 636, 235 S.E.2d 142, 1977 Ga. LEXIS 1144 (1977). “Consequential damages” result from a breach of contract or warranty. Cash v. Armco Steel Corp., 462 F. Supp. 272, 1978 U.S. Dist. LEXIS 13893 (N.D. Ga. 1978). Rule against recovery of vague, speculative, or uncertain damages relates primarily to uncertainty as to cause, rather than uncertainty as to measure or extent of damages. B & D Carpet Finishing Co. v. Gunny Corp., 158 Ga. App. 621, 281 S.E.2d 354, 1981 Ga. App. LEXIS 2341 (1981). Damages recoverable for breach of implied warranty of merchantability. - For breach of the 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) the reasonable cost of making repairs or correcting defects if incurred by purchaser, 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). Duty to prevent foreseeable damage in event of breach. - If there was a breach of implied warranty that incubator was merchantable and reasonably suited to use intended by reason of a latent defect which might reasonably be expected to endanger safety of eggs therein, then if such defect became known to plaintiff, the plaintiff was bound to exercise reasonable care and diligence to lessen damage which might result therefrom; the

duty imposed on the plaintiff was to use ordinary care to prevent foreseeable damage. Henley v. Sears-Roebuck & Co., 84 Ga. App. 723, 67 S.E.2d 171, 1951 Ga. App. LEXIS 776 (1951). Measure of damages for the breach of the warranty to repair is not in contravention of the warranty’s exclusion of incidental or consequential damages. Teledyne Indus., Inc. v. Patron Aviation, Inc., 161 Ga. App. 596, 288 S.E.2d 911, 1982 Ga. App. LEXIS 1951 (1982). Labor and repair expenses incurred by buyer who chooses remedy of cover under O.C.G.A. § 11-2-711(1)(a) are properly recoverable as incidental and consequential damages. Poultry Health Serv. of Ga., Inc. v. Moxley, 538 F. Supp. 276, 1982 U.S. Dist. LEXIS 12079 (S.D. Ga. 1982). 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). Increased labor and storage costs. - Buyer’s increased labor and inventory storage costs incurred as the result of seller’s failure to deliver and install machinery were recoverable as incidental damages. Latex Equip. Sales & Serv., Inc. v. Apache Mills, Inc., 225 Ga. App. 516, 484 S.E.2d 274, 1997 Ga. App. LEXIS 309 (1997), cert. denied, No. S97C1124, 1997 Ga. LEXIS 848 (Ga. Oct. 3, 1997). Drug distributor liability for user suicide. - The manufacturer and distributor of an anti-psychotic drug were not liable for the suicide of a patient because of failure to warn the patient of the dangers of discontinuing use of the drug where plaintiffs relied on the advice of a physician in the use of the drug, and could not show any breach of warranty caused by inadequate package labeling. Presto v. Sandoz Pharmaceuticals Corp., 226 Ga. App. 547, 487 S.E.2d 70, 1997 Ga. App. LEXIS 639 (1997). Jury may have been authorized to find that ultimately expenses incurred by a

General Consideration (Cont’d) seller to test allegedly defective carpet matting material were incurred “in connection with effecting cover,” or even “in inspection” of the goods, and more generally, a jury may have found the testing costs to have been a “reasonable expense” incurred by the seller “incident to” a supplier’s breach; therefore, the expenses may have been recoverable as incidental damages under O.C.G.A. § 11-2-715(1), and the trial court did not err in so ruling in entering partial summary judgment. Mitchell Family Dev. Co. v. Universal Textile Techs., LLC, 268 Ga. App. 869, 602 S.E.2d 878, 2004 Ga. App. LEXIS 1038 (2004). Attorney’s fees recoverable. - Using the general law of indemnity to supplement Georgia’s commercial code, a retailer was allowed to recover attorney’s fees as consequential damages from manufacturer when buyer incurred such fees to defend a personal injury action brought by a consumer due to manufacturer’s breach of warranty. Alterman Foods, Inc. v. G.C.C. Beverages, Inc., 168 Ga. App. 921, 310 S.E.2d 755, 1983 Ga. App. LEXIS 2956 (1983). Remand for reconsideration. - In action by carpet manufacturer for consequential damages representing loss of efficiency, excess down time, and additional adhesive materials expended in attempting to utilize defective jute, the circuit court remanded for more specific findings concerning the adequacy of proof of damages, and instructed the district court to enter an award if such damages could be ascertained with reasonable certainty. Hawthorne Indus., Inc. v. Balfour MacLaine Int’l, Ltd., 676 F.2d 1385, 1982 U.S. App. LEXIS 18869 (11th Cir. 1982). Exclusion of consequential damages found 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. §§ 11-2-714(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). Consequential damages award improper. - An award in favor of a buyer, representing a mediation settlement, was not recoverable as consequential damages under the Uniform Commercial Code, O.C.G.A. § 11-2-715. The buyer failed to present evidence showing that the award bore any relationship to the breach of warranty. Sunstate Indus. v. VP Group, Inc., 298 Ga. App. 269, 679 S.E.2d 824, 2009 Ga. App. LEXIS 648 (2009). Lost Profits Recoverable as consequential damages. - Lost profits, if supported by proper proof, are recoverable as consequential damages from 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). Insufficient proof of lost profits. - Though a subcontractor successfully proved a breach of contract claim against a supplier, the damages award in the amount of $160,000 was reversed on appeal as the subcontractor failed to present any evidence of anticipated expenses due to the loss of a construction project arising from the breach, and therefore the subcontractor’s proof of lost profits was insufficient as a matter of law and required a new trial; further, because the damages award was reversed, the appellate court also reversed the award of attorney fees to the subcontractor since the award of attorney fees was contingent upon the damages award on the breach of contract claim. Bldg. Materials Wholesale, Inc. v. Triad Drywall, LLC, 287 Ga. App. 772, 653 S.E.2d 115, 2007 Ga. App. LEXIS 1095 (2007). Profits must be capable of reasonable ascertainment. - 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).

RESEARCH REFERENCES Am. Jur. 2d. 22 Am. Jur. 2d, Damages, §§ 456-459. 63 Am. Jur. 2d, Products Liability, § 659 et seq. 63B Am. Jur. 2d, Products Liability, § 1882. 67A Am. Jur. 2d, Sales, §§ 13101380. 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.) § 2715. ALR. Loss of anticipated profits as damages for breach of seller’s contract as to machine for buyer’s use, 32 A.L.R. 120. Rights and remedies upon cancelation of sales agency, 52 A.L.R. 546; 89 A.L.R. 252. Liability of seller for special damages based on resale by buyer, as affected by his knowledge or ignorance of the resale, 88 A.L.R. 1439. Interest as element of damages recoverable in action for breach of contract for the sale of a commodity, 4 A.L.R.2d 1388. Recovery by contractor or artisan, suing for breach of warranty, of damages for loss of good will occasioned by use in his business of unfit materials, 28 A.L.R.2d 591. Measure and elements of recovery of buyer rescinding sale of domestic animal for seller’s breach of warranty, 35 A.L.R.2d 1273.

Rescue doctrine: applicability to situation created by breach of warranty, 44 A.L.R.3d 473. Application of warranty provisions of Uniform Commercial Code to bailments, 48 A.L.R.3d 668. Products liability: liability for injury or death allegedly caused by defective tire, 81 A.L.R.3d 318. Products liability: liability for injury or death allegedly caused by defect in snowmobile or other recreational-purpose vehicle, 81 A.L.R.3d 394; 66 A.L.R.4th 622. Products liability: liability for injury or death allegedly caused by defect in mobile home or trailer, 81 A.L.R.3d 421. Products liability: drain cleaners, 85 A.L.R.3d 727. Liability of manufacturer or seller for personal injury or property damage caused by television set, 89 A.L.R.3d 210. Elements and measure of damages for breach of warranty in sale of horse, 91 A.L.R.3d 419. Buyers incidental and consequential damages from seller’s breach under UCC § 2-715, 96 A.L.R.3d 299. Failure to deliver ordered merchandise to customer on date promised as unfair or deceptive trade practice, 7 A.L.R.4th 1257. Bystander recovery for emotional distress at witnessing another’s injury under strict products liability or breach of warranty, 31 A.L.R.4th 162.