10.4.8.2 Notes - Henningsen v. Bloomfield Motors, Inc. | Kessler, Gilmore & Kronman | October 31, 2012

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10.4.8.2 Notes - Henningsen v. Bloomfield Motors, Inc.

by Kessler, Gilmore & Kronman
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NOTE

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1. The principal case has become famous both for its treatment of the privity requirement and for its handling of the disclaimer clause contained in the contract of sale. The privity issue, which is discussed in a portion of the opinion not reprinted here, merits a word or two of commentary. Neither plaintiff had any direct contractual dealings with defendant Chrysler. And Mrs. Henningsen, not being the buyer of the car, was even further removed from the manufacturer than was her husband. The court nevertheless chose to extend the protection of the Uniform Sales Act to both plaintiffs by holding that Chrysler had made a promise an implied warranty of merchantability — which the Henningsens were entitled to enforce, despite the lack of any immediate contractual connection between themselves and Chrysler (an approach that forced the court to consider the validity of the disclaimer clause in the contract of sale, since §71 of the Sales Act stated that implied warranties could be disclaimed by express agreement).

3

At the time the principal case was decided, however, an increasing number of courts had already indicated a willingness to protect remote consumers against the pitfalls of sales law (privity, disclaimer and the requirement of timely notice) by upholding their claims in tort, on a theory of strict liability. See Prosser, The Assault on the Citadel, 69 Yale L.J. 1099 (1960); Prosser, The Fall of the Citadel (Strict Liability to the Consumer), 50 Minn. L. Rev. 791 (1966); Shanker, Strict Tort Theory of Products Liability and the Uniform Commercial Code: a Commentary on Jurisprudential Eclipses, Pigeonholes and Communication Barriers, 17 W. Res. L. Rev. 5 (1965). This case law found its crystallization in §402A of the Restatement of Torts Second which reads as follows:

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(1) One who sells any product in a defective condition unreasonably dangerous to the user or consumer or to his property is subject to liability for physical harm thereby caused to the ultimate user or consumer, or to his property, if

(a) the seller is engaged in the business of selling such a product, and

(b) it is expected to and does reach the user or consumer without substantial change in the condition in which it is sold.

(2) The rule stated in Subsection (1) applies although

(a) the seller has exercised all possible care in the preparation and sale of his product, and

(b) the user or consumer has not bought the product from or entered into any contractual relation with the seller.

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Section 402A is remarkable not only for its attempt to make products liability independent of warranty law but also for its imposition of strict, as contrasted with negligence, liability. The protection of the consumer is rounded out by other sections. Section 402B imposes strict liability for physical harm caused by justifiable reliance upon a public misrepresentation (by advertising, label, or otherwise) of the character and quality of the chattel sold. For the parallel rule imposing strict liability for pecuniary loss, see §524A.

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The public policy arguments in favor of strict liability as a risk distribution device are powerfully presented in Escola v. Coca Cola Bottling Co., 24 Cal. 2d 453, 462, 150 P.2d 436, 440-441 (1944) (Traynor, J., concurring).[72] See further, Vandermark v. Ford Motor Co., 61 Cal 2d 256, 391 P.2d 168, 37 Cal. Rptr. 896 (1964); Goldberg v. Kollsman Instrument Corporation, 12 N.Y.2d 432, 240 N.Y.S.2d 592, 191 N.E.2d 81 (1963).

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As to the desirability of dispensing with privity in the situation where the buyer's injury consists only in the diminished value of his bargain, see Santorv. A. & M. Karagheusian, 44 N.J. 52, 207 A.2d 305 (1965); Seely v. White Motor Co., 63 Cal. 2d 9, 403 P.2d 145, 45 Cal. Rptr. 17 (1965); Note, Economic Loss in Products Liability Jurisprudence, 66 Colum. L. Rev. 917 (1966); Note, Manufacturers' Liability to Remote Purchasers For Economic Loss Damages Tort or Contract? 114 U. Pa. L. Rev. 539 (1966). For a thoughtful critique of strict enterprise liability, and a defense of the fault principle, see the dissenting opinion of Judge Burke in the Goldberg case supra; Plant, Strict Liability of Manufacturers for Injuries Caused by Defects in Products — An Opposing View, 24 Tenn. L. Rev. 938 (1957) and, generally, J. Blum & H. Kalven, Public Law Perspectives on a Private Law Problem (1965); Coase, The Problem of Social Cost, 3 J. Law & Econ. 1 (1960); O.W. Holmes, The Common Law 91-96 (1881).

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It goes without saying that strict enterprise liability has not eliminated the existence of a defect as a prerequisite to liability. See, e.g., Keeton, Product Liability — Liability Without Fault and the Requirement of a Defect, 41 Texas L. Rev. 855 (1963); Traynor, The Ways and Meanings of Defective Products and Strict Liability, 32 Tenn. L. Rev. 363 (1965).

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The Uniform Commercial Code deals with the problem of privity in §2-318. The original official version of §2-318 extended warranty protection "horizontally" to members of the buyer's family or household and to guests; however, unlike earlier unofficial drafts, it had no express provisions subjecting the manufacturer to vertical liability in favor of persons in the distribution chain beyond the immediate buyer. The Code is "neutral" with regard to their protection by developing case law (Comment 3). Dissatisfaction with the initial version of §2-318 has led to two types of statutory modification. California, in adopting the Uniform Commercial Code, entirely omitted §2-318 as a "step backwards," the legislature preferring to rely upon California case law, which imposes strict liability in tort without contract or negligence. Report of the California State Bar Committee on Commercial Code, 37 S.B.J. 143 (1962). Virginia, by contrast, enacted an "anti-privity" statute replacing §2-318 but otherwise leaving the text of the Code intact. The substitute Section reads as follows:

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When Lack of Privity No Defense in Action Against Manufacturer or Seller of Goods

Lack of privity between plaintiff and defendant shall be no defense in any action brought against the manufacturer or seller of goods to recover damages for breach of warranty, express or implied, or for negligence, although the plaintiff did not purchase the goods from the defendant, if the plaintiff was a person whom the manufacturer or seller might reasonably have expected to use, consume, or be affected by the goods; however, this section shall not be construed to affect any litigation pending at its effective date.[73]

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Thus, while California chose the tort approach of the Restatement, Virginia elected to deal with the problem of products liability within the framework of the Uniform Commercial Code. See, in general, Speidel, The Virginia "Anti-Privity" Statute: Strict Products Liability under the Uniform Commercial Code, 51 Va. L. Rev. 804 (1965).

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To meet the increasing criticism of §2-318, the Permanent Editorial Board for the Uniform Commercial Code in its Report No.3 (1967) made §2-318 an optional alternative (A) and provided two other alternatives. Alternative B adopts an earlier version of the Code more favorable to the remote consumer. Alternative C is drawn to reflect the trend of modern decisions as indicated in §402A, limiting, however, the ineffectiveness of disclaimers to personal injuries.

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For more on the demise of the privity requirement in modern contract law, see the Introductory Note to Chapter 11 on Third Party Beneficiaries.

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2. Suppose the New Jersey court and elected to deal with the Henningsen case under the approach suggested by §402A of the Restatement of Torts Second, supra Note 1. What happens to "the limitation of warranty under §402A? For the New Jersey court's subsequent adoption of such a tort approach in a case involving a manufacturer's liability for a defective product, see Santor v, A, & M. Karagheusian, 44 N.J. 52, 207 A.2d 305 (1965). The Santor case did not purport to reject or abandon Henningsen, but the relationship between the two cases may not be entirely clear. As counsel for a plaintiff situated like Mrs. Henningsen, would you elect, if you had the choice, to bring your action in tort or in contract?

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3. Did the court hold that the limitation of warranty was void as against public policy? If so, why did Francis J., discuss at such length the facts that (1) the warranty clause was not drawn to Mr. Henningsen's attention when he bought the car, (2) the warranty clause appeared in fine print, and (3) the warranty clause was so drafted that a layman unskilled in the niceties of warranty law would not realize that the clause was intended to disclaim all liability for physical injuries?

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[72] Calabresi, Thoughts on Risk Distribution and the Law of Torts, 10 Yale L. J. 499 (1961); Kessler, Products Liability, 76 Yale L.J. 887, 924 (1967).

[73] Va. Code Ann. §8-654.3 (Supp. 1964).

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June 02, 2014

10.4.8.2 Notes - Henningsen v. Bloomfield Motors, Inc.

10.4.8.2 Notes - Henningsen v. Bloomfield Motors, Inc.

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