Will our repair-or-replace remedy and damages limit hold up on a sale of goods?
R.C. 1302.29(D), as the Tenth District set it out, provides that remedies for breach of warranty can be limited in accordance with R.C. 1302.93 on contractual modification of remedy, and R.C. 1302.93(A)(1) provides that the agreement 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 (Volovetz). The court took from a treatise on the Code the proposition that the provision gives parties the right to include any reasonable provision as to what remedies are available upon breach, and that they may allocate the loss from goods failing to perform as warranted so long as minimum adequate remedies remain available.
The trap
The limit has to be, in the Supreme Court of Ohio's words as the Tenth District quotes them, "a part of the parties' bargain in fact". In Volovetz the limitation lived in a separate limited warranty that the contract did not incorporate by reference, and it therefore did not bind the buyer: a document becomes part of the contract only where the contract makes clear reference to it and describes it in such terms that its identity may be ascertained beyond doubt. The same defect decided HB Martin Logistics, where limited-warranty agreements sent eighteen days after the purchase agreement were held not part of the 'original agreement'. So sending the terms later, or referring to 'the manufacturer's standard warranty' without naming the document, is how an otherwise valid Ohio remedy limit fails. Nothing in this rule addresses what happens when an exclusive remedy fails of its essential purpose, nor the division that makes a stated remedy cumulative unless it is expressly agreed to be exclusive. Twenty-nine Ohio decisions mentioning R.C. 1302.93 were located and read; the ones that set out those divisions are either marked unpublished or carry no recoverable official citation, so this rule states neither.
9 authorities
- case2016-Ohio-7707Volovetz v. Tremco Barrier Solutions, Inc.Ohio Ct. App. 10th Dist.decided 2016
The words that state the rule
Pursuant to R.C. 1302.93(A)(1), "[t]he agreement * * * 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."
- case2016-Ohio-7707Volovetz v. Tremco Barrier Solutions, Inc.Ohio Ct. App. 10th Dist.decided 2016
The words that state the rule
This provision gives the parties to a contract of sale the right to include any reasonable provision with respect to what remedies are available upon breach. 4B Lawrence, Anderson on the Uniform Commercial Code, Section 2-719:4, at 8 (3d Ed. 2001). Thus, parties to a contract of sale may consensually allocate the loss resulting from the failure of the goods to perform as warranted, as long as minimum adequate remedies remain available for a beach.
- case2023-Ohio-4836HB Martin Logistics, Inc. v. Hissong Group, Inc.Ohio Ct. App. 9th Dist.decided 2023
The words that state the rule
“Generally, ‘the parties to a contract may incorporate contractual terms by reference to a separate, noncontemporaneous document, including * * * a separate document which is unsigned[,]’ if ‘the contract makes clear reference to the document and describes it in such terms that its identity may be ascertained beyond doubt.’”
- case2023-Ohio-4836HB Martin Logistics, Inc. v. Hissong Group, Inc.Ohio Ct. App. 9th Dist.decided 2023
The words that state the rule
On September 9, 2016, Ms. Martin signed a one-page, double-sided purchase agreement (the “Purchase Agreement”) to purchase a 2017 Kenworth T680 semi-truck from Hissong.
- case2023-Ohio-4836HB Martin Logistics, Inc. v. Hissong Group, Inc.Ohio Ct. App. 9th Dist.decided 2023
The words that state the rule
Per Ms. Martin’s affidavit, on September 27, 2016, Hissong sent her two limited warranty agreements via email:
- case2023-Ohio-4836HB Martin Logistics, Inc. v. Hissong Group, Inc.Ohio Ct. App. 9th Dist.decided 2023
The words that state the rule
As a result, the 12-month limitations period contained within the LWAs could not be considered part of the “original agreement” for purposes of reducing the four-year statute of limitations under R.C. 1302.93(A).
- case2016-Ohio-7707Volovetz v. Tremco Barrier Solutions, Inc.Ohio Ct. App. 10th Dist.decided 2016
The words that state the rule
"[r]emedies for breach of warranty can be limited in accordance with the provisions of * * * [R.C.] 1302.93 * * * on contractual modification of remedy." R.C. 1302.29(D).
- case2016-Ohio-7707Volovetz v. Tremco Barrier Solutions, Inc.Ohio Ct. App. 10th Dist.decided 2016
The words that state the rule
Notably, " '[t]he limitation [or exclusion of remedies] must be a part of the parties' bargain in fact.' " Insurance Co. of N. Am. v. Automatic Sprinkler Corp., 67 Ohio St.2d 91, 96 (1981), quoting Nordstrom, Law of Sales, Section 89, at 276 (1970);
- case2016-Ohio-7707Volovetz v. Tremco Barrier Solutions, Inc.Ohio Ct. App. 10th Dist.decided 2016
The words that state the rule
Because incorporation by reference cannot occur without a clear identification of the extrinsic document and a clearly expressed purpose to incorporate that document, we conclude that this contract's equivocal language does not incorporate the Limited Warranty by reference. {¶ 29} As incorporation by reference did not occur here, the terms of the Limited Warranty, including the remedy limitation, do not bind the Volovetzes. Without a remedy limitation contractually binding the Volovetzes, the trial court's reasoning for granting summary judgment fails. Accordingly, we sustain the first assignment of error.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.