Is our 'repair or replace is the exclusive remedy' clause good in Kansas?
Yes, on article 2's terms. Subject to subsections (2) and (3) and to the liquidated-damages section, the agreement may provide for remedies in addition to or in substitution for those provided in article 2 and may limit or alter the measure of damages recoverable, as by limiting the buyer's remedies to return of the goods and repayment of the price or to repair and replacement of nonconforming goods or parts; and resort to a remedy as provided is optional unless the remedy is expressly agreed to be exclusive, in which case it is the sole remedy (K.S.A. 84-2-719(1)). Where circumstances cause an exclusive or limited remedy to fail of its essential purpose, remedy may be had as provided in the act (subsection (2)). Consequential damages may be limited or excluded unless the limitation or exclusion is unconscionable; limitation for injury to the person in the case of consumer goods is prima facie unconscionable, while limitation where the loss is commercial is not (subsection (3)). Whether the limited remedy has failed is a question of fact, not a matter of construction. In Elite Professionals, Inc. v. Carrier Corp. the Court of Appeals reversed summary judgment for a seller whose repair-or-replace warranty was performed only after the buyer's refrigerated cargo had spoiled, holding that the seller being first given the opportunity to repair or replace after the harmful occurrence "does not, standing alone, bar recovery for failure of essential purpose at least in those instances where the outcome of the repair or replacement leaves the user in the position of one who has been afforded an unconscionably inadequate remedy", and that "Whether the remedy failed in this case is a question of fact" that "should not have been decided on summary judgment."
The trap
Exclusivity is not presumed: unless the remedy is expressly agreed to be exclusive it is one more option the buyer may take or leave, so a repair-or-replace clause that never says it is the sole and exclusive remedy adds a remedy instead of replacing article 2's. Subsection (2) is the other trap, when the limited remedy fails of its essential purpose the buyer gets the act's remedies. Elite Professionals sets the measure by the official comment it quotes: "it is of the very essence of a sales contract that at least minimum adequate remedies be available", there must be "at least a fair quantum of remedy", and "where an apparently fair and reasonable clause because of circumstances fails in its purpose or operates to deprive either party of the substantial value of the bargain, it must give way to the general remedy provisions of this Article." Prompt repair is not an answer if it comes too late to be worth anything. Whether a separately drafted consequential-damages exclusion survives that failure is still a question no Kansas authority in this rule answers: the Carrier clause in Elite carried both an exclusive remedy and a consequential-damages disclaimer - the court described it as "in the nature of an exclusive express limited remedy warranty" with "no backup remedy clause (e.g., repayment of purchase price)", no liquidated-damages clause, and Carrier disclaiming all liability "beyond or other than its express obligation to repair or replace defective parts or components" - and it reversed on the whole warranty theory without separating them. In a consumer transaction the clause faces a flat statutory bar as well: K.S.A. 50-639(a)(2) forbids a supplier to exclude, modify or attempt to limit any remedy provided by law, including the measure of damages available, for breach of the implied warranties of merchantability and fitness for a particular purpose, and subsection (e) makes such a limitation void.
10 authorities
- statuteK.S.A. 84-2-719enactment date not established
The words that state the rule
Subject to the provisions of subsections (2) and (3) of this section and of the preceding section on liquidation and limitation of damages, (a) the agreement may provide for remedies in addition to or in substitution for those provided in this article and may limit or alter the measure of damages recoverable under this article, as by limiting the buyer's remedies to return of the goods and repayment of the price or to repair and replacement of nonconforming goods or parts; and (b) resort to a remedy as provided is optional unless the remedy is expressly agreed to be exclusive, in which case it is the sole remedy.
- statuteK.S.A. 84-2-719enactment date not established
The words that state the rule
Where circumstances cause an exclusive or limited remedy to fail of its essential purpose, remedy may be had as provided in this act.
- statuteK.S.A. 84-2-316enactment date not established
The words that state the rule
Remedies for breach of warranty can be limited in accordance with the provisions of this article on liquidation or limitation of damages and on contractual modification of remedy (K.S.A. 84-2-718 and 84-2-719).
- statuteK.S.A. 50-639enactment date not established
The words that state the rule
(a) Notwithstanding any other provisions of law, with respect to property which is the subject of or is intended to become the subject of a consumer transaction in this state, no supplier shall: (1) Exclude, modify or otherwise attempt to limit the implied warranties of merchantability as defined in K.S.A. 84-2-314, and amendments thereto, and fitness for a particular purpose, as defined in K.S.A. 84-2-315, and amendments thereto; or (2) exclude, modify or attempt to limit any remedy provided by law, including the measure of damages available, for a breach of implied warranty of merchantability and fitness for a particular purpose.
- statuteK.S.A. 84-2-719enactment date not established
The words that state the rule
Consequential damages may be limited or excluded unless the limitation or exclusion is unconscionable. Limitation of consequential damages for injury to the person in the case of consumer goods is prima facie unconscionable but limitation of damages where the loss is commercial is not.
- statuteK.S.A. 50-639enactment date not established
The words that state the rule
(e) A disclaimer or limitation in violation of this section is void. If a consumer prevails in an action based upon breach of warranty, and the supplier has violated this section, the court may, in addition to any damages recovered, award reasonable attorney fees and a civil penalty under K.S.A. 50-636, and amendments thereto, to be paid by the supplier who gave the improper disclaimer.
- case827 P.2d 1195Elite Professionals, Inc. v. Carrier Corp.Kan. Ct. App.decided 1992read it at the source ↗
The words that state the rule
In the official UCC Comments to K.S.A. 84-2-719, it is said: “1. Under this section parties are left free to shape their remedies to their particular requirements and reasonable agreements limiting or modifying remedies are to be given effect. “However, it is of the very essence of a sales contract that at least minimum adequate remedies be available. If the parties intend to conclude a contract for sale within this Article they must accept the legal consequence that there be at least a fair quantum of remedy for breach of the obligations or duties outlined in the contract. . . . [Ujnder subsection (2), where an apparently fair and reasonable clause because of circumstances fails in its purpose or operates to deprive either party of the substantial value of the bargain, it must give way to the general remedy provisions of this Article.” (Emphasis added.)
- case827 P.2d 1195Elite Professionals, Inc. v. Carrier Corp.Kan. Ct. App.decided 1992read it at the source ↗
The words that state the rule
We conclude the fact that the seller is first given the opportunity to repair or replace after the harmful occurrence does not, standing alone, bar recovery for failure of essential purpose at least in those instances where the outcome of the repair or replacement leaves the user in the position of one who has been afforded an unconscionably inadequate remedy, that is, where the user has not been afforded a reasonably “fair quantum of remedy.” Whether the remedy failed in this case is a question of fact ánd should not have been decided on summary judgment.
- case827 P.2d 1195Elite Professionals, Inc. v. Carrier Corp.Kan. Ct. App.decided 1992read it at the source ↗
The words that state the rule
In summary, we conclude that the summary judgment against Elite must be reversed. It was improvidently granted. On the present record, the printed warranty and disclaimer does not preclude recovery by Elite on its asserted strict liability, negligence, or warranty theories as a matter of law.
- case827 P.2d 1195Elite Professionals, Inc. v. Carrier Corp.Kan. Ct. App.decided 1992read it at the source ↗
The words that state the rule
The printed warranty and disclaimer may be said, to be in the nature of an exclusive express limited remedy warranty. Carrier promises to repair or replace any defective parts or components causing malfunction of the refrigeration unit. In the event of refrigeration unit malfunction, Elite’s sole and only remedy is repair or replacement of defective parts or components according to Carrier’s promise as stated in the printed, warranty and disclaimer. There is no backup remedy clause (e.g., repayment of purchase price). Carrier disclaims all liability for damage or loss arising out of refrigeration unit malfunction beyond or other than its express obligation to repair or replace defective parts or components. There is no liquidated damages clause.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.