Schneider v. Miller

Ohio Court of Appeals · Contracts

Contractsused car saleas isno warrantyrevocation of acceptanceimplied warranty of fitnessdisclaimerintegration clause

Facts

Schneider bought a 1966 Chevrolet Impala SS from Miller's used car lot after test driving it and discussing visible and possible defects. Miller told him the brakes needed replacement, the trunk was rusted and would cost about $500 to repair, and the engine might eventually need rebuilding. The next day Schneider paid the balance, signed a bill of sale and a separate Buyers Guide stating the car was sold "as is" and with no warranty, and took the car home. Shortly afterward, Schneider sought to rescind, claiming the frame and underside were badly rusted, unsafe, and not repairable.

Issue

Was Schneider entitled to rescission or revocation of acceptance despite the "as is" sale, and did Miller's conduct support liability for unconscionable consumer practices or common-law fraud? More specifically, did the evidence show a qualifying nonconformity under R.C. 1302.66, surviving implied warranties, or false representation or concealment by the seller?

Rule

A buyer may revoke acceptance under R.C. 1302.66 only if the buyer accepted the goods on the reasonable assumption that the nonconformity would be cured, or accepted without discovering the nonconformity because discovery was difficult or because of the seller's assurances. Under R.C. 1302.29, expressions such as "as is" exclude implied warranties, and no implied warranty exists as to defects an examination ought to have revealed when the buyer examined the goods as fully as desired. Fraud requires a false representation or, where there is a duty to disclose, concealment of a material fact, made falsely and with intent to mislead, justifiable reliance, and resulting injury.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Toledo, Dana Kim bought a 25-year-old pickup from Riverbend Auto Sales after a test drive. The sales contract and Buyers Guide both stated "AS IS - NO WARRANTY." Two days later, a mechanic told Dana the truck's frame was severely corroded and unsafe.

Dana sues to revoke acceptance. Which is the strongest basis for denying revocation under the majority's approach?

Explanation. Under the majority's reading of R.C. 1302.66, revocation requires more than a serious defect. The buyer must show acceptance either on the reasonable assumption the nonconformity would be cured, or without discovering it because discovery was difficult or because of seller assurances. An as-is sale alone does not automatically eliminate revocation, but on these facts Dana lacks the statutory predicates. (Derived from Schneider v. Miller (n.d.).)