The court rejected the rule adopted by other jurisdictions which refuse to extend the implied warranty to subsequent purchasers, finding privity necessary. The court adopted the rule that abandons the privity requirement in suits by subsequent purchasers against a builder or contractor for breach of an implied warranty of good workmanship for latent defects.
Plaintiff's predecessors in title contracted with the defendant to build a garage. Shortly after plaintiff's bought the property, problems with the garage arose. They asked the defendant to repair it, but he did not. The plaintiffs then brought suit against the builder for breach of implied warranty of workmanlike quality and negligence. The builder brought a motion to dismiss and the trial court dismissed the plaintiff's complaint for lack of privity of contract between the plaintiff and defendant. The plaintiffs appealed the case.
Was privity of contract necessary to file for breach against the defendant?
The court reversed the dismissal by the trial court, holding that privity of contract was not necessary for plaintiffs, as subsequent purchasers, to sue the builder or contractor under an implied warranty theory for latent defects which manifested themselves within a reasonable time after purchase and which caused economic harm.