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Ismael v. Goodman Toyota - 106 N.C. App. 421, 417 S.E.2d 290 (1992)

Rule:

In order to recover for breach of the implied warranty of merchantability, a plaintiff must establish (1) a merchant sold goods, (2) the goods were not merchantable at the time of sale, (3) the plaintiff (or his property) was injured by such goods, (4) the defect or other condition amounting to a breach of the implied warranty of merchantability proximately caused the injury, and (5) the plaintiff so injured gave timely notice to the seller.

Facts:

Plaintiff purchased a used 1985 Ford Tempo, with recorded mileage of 58,810, from defendant. During the test drive, plaintiff and his wife noticed the car “shook.” Defendant’s salesman assured them that the car “probably just needed a tune-up and that anything that was found wrong with the car would be repaired at no charge.” Plaintiff admitted that he purchased the car “as is” but contended he did so only because of the salesman's assurance of repair and because of the vehicle service agreement he purchased to cover the car. Plaintiff instituted the present action under the Magnuson-Moss Warranty -- Federal Trade Commission Improvement Act, 15 U.S.C.S. § 2301 et seq., to recover damages he allegedly suffered as a result of his purchase of the car, claiming that the defendant breached its implied warranty of merchantability because the car was unroadworthy, was not repairable at the time of purchase and was therefore unfit for its particular purpose. The trial court denied any relief to the plaintiff, concluding that plaintiff had purchased the vehicle in used "as is" condition and defendant "assumed and bore no responsibility for subsequent repair of the vehicle or its roadworthiness." Plaintiff appealed. 

Issue:

Under the circumstances, was the plaintiff buyer entitled to damages? 

Answer:

Yes.

Conclusion:

The court held that the trial judge erred when he concluded that the buyer's purchase of the vehicle in "as is" condition meant that the dealership assumed and bore no responsibility for its repair, inasmuch as an implied warranty of merchantability existed. It further held that the Magnuson-Moss Warranty Act, 15 U.S.C.S. § 2301 et seq., applied, given that the buyer had not purchased the vehicle with intent to resell it, the car was tangible personal property distributed in commerce for noncommercial use, and the dealership was a supplier. In view of the fact that mechanical defects in the car were such that it was unmerchantable at the time of sale, the buyer was entitled to damages. Remand was therefore ordered for a damages hearing.

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