Industralease Automated & Scientific Equipment Corp. v. R.M.E. Enterprises, Inc.

Facts

D needed a better way to dispose of refuse during its operations. D visited Clean Air Controls, Inc. and saw an incinerator in operation. He ordered two units, and Clean and D executed a lease for $322.58 for 60 months. The lease also contained a clause generally disclaiming any warranties, except that it preserved the warranties if the lessor were the manufacturer of the equipment. There was no problem with the clause as the lessor and Clean were the same company. D installed a concrete slab, underground wiring, and a fuel tank. D was visited by a representative of Clean and of P who presented him with a set of new papers which 'were like the other papers I signed but with a different company's name on the top', that he was told that the lease he had signed before was 'no good', and that the new papers had to be signed 'so we can get our money so you can get your incinerator.' The new price was $319.70 per month plus tax. Other than D having a right to purchase the equipment at the end of the lease for $1390, everything was the same except the lessor’s name. Once installed the next day the equipment did not work. D made four rental payments to P but Clean was unable to get the units working. D demanded the removal of the incinerators from its premises. P refused and demanded the payments dues. P sued D for $17,936.76. D claimed that P had breached its warranty. The court held that the disclaimer of warranties contained in the lease was not unconscionable as a matter of law. The court left to the jury the determination of the issue whether P had made express warranties concerning the capacity of the incinerators to function properly, instructing the jury that if the warranties had been made, and the incinerators had not worked properly, P had breached its contract. D got the verdict and $1,342.76 on their counterclaim. P appealed.

Issues

Rule of Law

Holding and Decision

Legal Analysis

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