Massey-Ferguson, Inc. v. F. X. Utley

439 S.W.2d 57 (1969)

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Nature of the Case

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Facts

P is a manufacturer of farming machinery. Farmers Implement Sales Company is a dealer for such equipment, buying the machines wholesale from P and selling them at retail. F. X. Utley (D) is a farmer. D purchased from Farmers Implement Sales Company a Massey-Ferguson No. 20, 2-row, cornhead combine attachment. When attached to a combine harvester machine, it will cut corn, separate and husk the ears, and shell the kernels. D made a down payment of $675 and executed an installment sales contract for the balance of $1,603.56, calling for three equal payments of $534.52 in November of 1961, 1962 and 1963. The contract immediately was assigned to P. D defaulted in the first payment due under the contract. P sued D for breach. D defended on the ground of breach of implied warranties of fitness. P claimed that the defense of breach of implied warranties could not be asserted because (1) the contract between the dealer and D expressly excluded any implied warranties, and (2) D had expressly covenanted in the contract that he would not assert against the assignee any defense he might have against the seller. The contract contained language expressly excluding implied warranties (as is authorized by 2-314 and 2-315). However, it was on the back of the contract form, with a number of other provisions which substantially filled the back page. The paragraph containing the exclusionary language was headed 'WARRANTY AND AGREEMENT' in bold-face capital letters, but the exclusionary language itself was in type of the same size and face as were the general contents of the contract. The court ruled that the attempted exclusion was not valid or effective because it was not conspicuous within the requirement of 2-316(2) that such an exclusion 'must be by a writing and conspicuous.' P appealed.