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Disclaimers of implied warranties under Ind. Code § 26-1-2-316 (1971) are not favored and are strictly construed against the sellers for reasons of public policy. In order to exclude or modify an implied warranty of merchantability under Ind. Code § 26-1-2-316(2) (1971), the disclaimer must mention merchantability and the written exclusionary language must be conspicuous.
Plaintiff-appellant, Kenneth Woodruff, was engaged in the business of raising broiler chickens. He phased out his broiler business and began raising chickens for the production of eggs. A representative from Farm Bureau attempted to persuade plaintiff to try their chickens. As a result, plaintiff met the other representatives and travelled to county farm to observe its flock of chickens. Plaintiff observed that the chickens were out of feed and were congested. But plaintiff was assured by the representatives that he would only get the good chickens. This resulted to an oral agreement that plaintiff would purchase chickens. At the time of delivery, plaintiff was asked to signed the delivery and acceptance receipts of the delivered chicken, he was also advised that the chickens would develop in the proper manner. Plaintiff fed those chickens a special feed but its condition was not improving that affected the poultry business of plaintiff. Plaintiff-appellant now sought review of an order which granted summary judgment in favor of defendant-appellee on plaintiff’s complaint for damages for breach of warranty, misrepresentation, and fraud arising from the sale of chickens to him.
Should the disclaimer of implied warranties in the receipt favored the defendants?
The court noted that an implied warranty of merchantability arose by operation of law from the sole fact that one seller was a regular merchant with respect to the sale of chickens. The court then found that disclaimers of implied warranties under Ind. Code § 26-1-2-316 (1971) were not favored and were to be construed strictly against sellers for reasons of public policy, noting that the disclaiming language failed to mention merchantability in conspicuous written language, as required under the statute. The court further noted that nothing in the receipt drew plaintiff’s attention to the purported exclusionary language. The court subsequently held that genuine issues of material fact arose as to the existence and violation of express warranties and as to the violation of the implied warranties of merchantability and fitness and that the disclaiming language in the receipts was insufficient as a matter of law to negate either implied or express warranties. Hence, the court held that the granted summary judgment was a reversible error.