Henningson v. Bloomfield Motors, Inc. (1960)

Henningson v. Bloomfield Motors, Inc.
Supreme Court of New Jersey, 1960
32 N.J. 358, 161 A.2d 69

Facts: Plaintiff Henningsen purchased a new automobile from defendant Bloomfield Motors, Inc.  Ten days after the purchase, while his wife was driving the car, the steering mechanism of the vehicle failed, causing an accident which totaled the car.  Henningsen’s wife sued both Bloomfield and Chrysler; her husband joined in the action seeking recovery of consequential losses.  Both claims were based on alleged breach of implied warranty of merchantability imposed by the Uniform Sales Act.  The defense relied on a contractual disclaimer of warranty, which the Sales Act would permit.  The disclaimer was printed on the back of the contract in extremely small print.  It purported to limit liability for any breach of warranty to replacement of defective parts within 90 days of the sale or before the car had been driven 4,000 miles, whichever period was shorter.  The sales contract was printed on one page, front and back, which the most of the front print in 12 point type.  After the signature portion, the type became much smaller.  The final two paragraphs printed on the front of the contract attested that the agreement was complete, that the signers were over the age of 21, and that the signers had “read the matter printed on the back hereof and agree to it as a part of this order the same as if it were printed above my signature.”  Henningsen testified that he did not read the final two paragraphs or any of the printed material on the back of the form.  Judgment was for the plaintiffs, which the defendants appealed.

Issue: Does an express contract agreement, printed on a standard form, eliminate an implied warranty of merchantability?

Holding: No.

Decision/Analysis:
(Francis, J.)  The traditional contract is the result of free bargaining of parties who are brought together by the play of the market, and who meet each other on a footing of approximate economic equality.  From the standpoint of the purchaser, there can be no arms length negotiation on the subject of warranties.  Because his capacity for bargaining is so grossly unequal, the inexorable conclusion which follows is that he is not permitted to bargain at all.  The warranty used in this case was a standardized form designed for mass use.  It was imposed on the automobile consumer.  He could take it or leave it.  No bargaining was engaged with respect to it.  In fact, the dealer did not have authority to alter it.  The words “warranty” or “limited liability” did not appear in the fine print above the place for signature.  Could an ordinary layman realize what he was relinquishing in return for what was being granted?  In the context of the warranty, only the abandonment of all sense of justice would permit the court to hold, as a matter of law, the phrase “its obligation under this warranty being limited to making good at its factory any part or parts thereof” would signify to an ordinary reasonable person that he was relinquishing any personal injury claim the might flow from the use of a defective automobile.  The judicial process has recognized a right to recover damages for personal injuries arising from a breach of that warranty.  The disclaimer of implied warranty and exclusion of all obligations except those specifically assumed by the express warranty signify a studied effort to frustrate that protection.  The judgment in favor of the plaintiff was affirmed.

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