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What You Can Do Under New York Law When You're Sold Defective Goods

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In Bimini Boat Sales, Inc. v.  Luhrs Corp., plaintiff Bimini, a retail boat dealer, bought a fishing boat from boat manufacturer Luhrs, intending to resell the boat to the general public. Unfortunately for Bimini, after they received the boat from Luhrs, they discovered that the boat had several defects that were serious enough to render it unsaleable, which in legal terms is called "unmerchantable," or unfit for its particular purpose. Since the boat was considered "goods" under New York law, Bimini sued to recover under two different provisions of New York's Uniform Commercial Code. First, Bimini sought to recover damages for Luhrs' breach of the implied warranties of merchantability [UCC 2-314]; second, Bimini claimed entitlement to damages based upon the boat's un-fitness for a particular purpose [ UCC 2-315]. Bimini also asserted that it was entitled to consequential damages for harm to their reputation and for loss of business. In reversing that portion of the Suffolk County trial court's order that denied plaintiff's motion seeking judgment as a matter of law, the Appellate Division, Second Department held that plaintiff had proven that the boat was unmerchantable and not fit for resale to the public because it had €œfundamental structural deficiencies” and design flaws which required extensive repairs and “design modifications.” The significance of this decision, in my view, is the last part, however, wherein the appellate court affirmed the trial court's dismissal of the plaintiff's claims to recover damages for loss of business and damage to the plaintiff's business reputation on the grounds the terms of the dealer agreement had expressly barred these claims.

Category: Defective Products


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