Moorman Manufacturing Company
National Tank Company
Plaintiff purchased a bolted-steel grain-storage tank from
defendant for use at its feed-processing plant in Alpha,
years later, a crack developed in one of the steel plates on the
second ring of the tank.
alleged that the tank was not reasonably safe due to certain
design and manufacturing defects.
damages representing the cost of repairs and reinforcement as
well as loss of use of the tank.
Granted Df -
motion to dismiss.
cost of repair and loss of profits or income were economic
losses which could not be recovered under the tort theories
named in the complaint.
Allowed a Pl -
to recover from a manufacturer for personal injuries.
mention economic loss.
Carpet lines started to show
the plaintiff could maintain a breach-of-warranty claim directly
against the manufacturer despite the lack of privity between
responsibility of the manufacturer should be no different where
damage to the article sold or to other property is involved.
Truck that bounced violently, overturned, became damaged,
stopped making payments, got reposed, sued for breach of
warranty and strict liability, for purchase price, and profits
lost because of the trucks unsuitability.
basis of express warranty.
Santor. Only if someone had been injured because the rug was
unsafe for use would there have been any basis for imposing
strict liability in tort.
losses are not recoverable under strict liability in tort
Appellate Court Opinion
unreasonably dangerous nature of a product has particular
relevance when a personal injury results and to some degree when
property damage occurs.
has little relevance to economic loss when neither personal
injury nor property damage is involved.
manufacturer's strict liability for economic loss cannot be
disclaimed because a manufacturer should not be permitted to
define the scope of its own responsibility for defective
Adopting strict liability in tort for economic loss would
effectively eviscerate section 2 -- 316 of the UCC
of the rules of warranty prevents a manufacturer from being held
liable for damages of unknown and unlimited scope.
The Df would
be liable for business losses for failure to meet specific needs
even though the needs were communicated ONLY to the dealer.
Warranty or Bargain Reason
itself against the risk of unsatisfactory performance by
bargaining for a warranty
consumer to bargain rather than the consuming public to pay more
so manufacturers can insure against the possibility that his
product will not meet the business needs of some customers.
You allow an
injured party to recover for all types of harm, but you prevent
a person from recovering for economic loss because he
fortuitously escaped injury.
rests on an understanding of the nature of the responsibility a
manufacturer must undertake in distributing his products.
manufacture cannot be held liable for failure to meet
performance UNLESS he agrees.
should not be charged at the will of the manufacturer with
bearing the risk of physical injury when he buys a product on
however, be fairly charged with the risk that the product will
not match his economic expectations unless the manufacturer
agrees that it will.
product is sold in a defective condition that is unreasonably
dangerous to the user or consumer or to his property, strict
liability in tort is applicable to physical injury to
plaintiff's property, as well as to personal injury.
injury to property is so akin
to personal injury that there is
no reason to distinguish them.
because the plaintiff has been exposed, through a hazardous
product, to an unreasonable risk of injury to his person or
plaintiff cannot recover for solely economic loss under the tort
theories of strict liability, negligence and innocent
lie in the warranty provisions of the UCC.
appellate courts judgment.