Jenny Fashions (Buyer)
This is an action by a seller, Wullschleger & Co., Inc., against a
buyer, Jenny Fashions, Inc. (Jenny), for nonpayment of $28,965.64, plus
interest, for fabric sold and partially delivered to Jenny.
The Buyer, Claiming a latent defect in the fabric, counterclaims for
lost profits in the amount of $67,361.94, plus interest, alleging breach
of both an express and an implied warranty of merchantability.
Buyer bought sample fabric and made circle skirts with no apparent
Buyer order 37,500 yards.
Buyer only received 23,577 yards at a price of $27,107.
Buyer only paid 11,402, leaving a balance of $14,704.
No Apparent defects
Fabric came with disclaimer.
"No claims allowed after 10 days," and
"no allowance will be made after the goods have been cut."
Distortion Problem with
The hem of the circle skirts were distorted.
Unable to ascertain cause.
Customers became dissatisfied and cancelled orders.
Buyer also cancelled her remaining order and notified the Seller.
Large portions of the fabric were screwed and not at right angles.
distortion cause by Buyers misuse
Sellers admits the fabric is not first quality.
The distortion was caused not by the skew, but by Jenny's misuse of the
The skewed fabric constituted a breach of the implied warranty of
merchantability as well as the express warranty that the fabric was
Skew was the proximate cause of the distorted hemline.
Buyer used common industry standards.
Invoice language does not bar the Buyers claim.
Section 2-715(2)(a), N.Y. UCC (McKinney 1964)
Provides that a buyer may collect consequential damages resulting from
a seller's breach of warranty for "any loss resulting from general or
particular requirements and needs of which the seller at the time of
contracting had reason to know
and which could not reasonably be
prevented by cover or otherwise. . . ."
Sellers Argument did
not have reason to know.
That it did not have "reason to know" that Jenny would use its fabric
for circle skirts, and therefore that it is not liable for Jenny's lost
This hinges the allegation that Jenny should have know the Pl - fabric
was not suitable for circle skirts.
Circle skirts are neither unusual in the industry nor unique in any
The making of such a skirt by a dress manufacturer is an ordinary use
of fabric well within the inferred knowledge of the seller.
Buyer should have prevented loss
Jenny's loss could not "reasonably be prevented by cover or otherwise."
Its attempts to cover by purchasing substitute fabric, although
unsuccessful, were reasonable and made in good faith.
Jenny is entitled to recover its lost profits resulting from the
distortion of the skirts, because Seller/Plaintiff had reason to know of
Jenny's intended use and Jenny made reasonable efforts to prevent its
Sellers Argument computing loss it too uncertain
Plaintiff contends that Jenny's basis for computing lost profits is too
uncertain to warrant relief.
Rule Rewarding Based On Uncertainty
Pursuant to New York law, however, "when it is certain that damages
have been caused by a breach of contract, and the only
uncertainty is as to their amount, there can rarely be any good
reason for refusing on account of such uncertainty, any damages
whatever for the breach."
Where a wrong has been done, the court will make a reasonable attempt
to estimate damages.
Purchase order cancellation will be used to determine reward.
There are both written and phone cancellations.
There are some other cancellations that cannot be rewarded due to bad
cancellations received from Jenny's customers, and
purchase orders cancelled by Jenny on the telephone, that Jenny would
have received $82,155.50 in gross profits if plaintiff's fabric had not
been defective. (See Appendix attached.)
We deduct from this amount
$20,346.05 which Jenny recouped at close-out sales for defective
$9,039.25 estimated labor rebate for unsewn dresses, and
$15,704.87 balance due on fabric plaintiff delivered to Jenny, which
leaves net lost profits in the amount of $37,065.33.