Where plaintiff city asserted common law theories of recovery, federal district court's summary judgment for defendant on basis Uniform Commercial Code precluded city's reliance on third-party-beneficiary theory was improper. Omaha Pollution Control Corp. v. Carver-Greenfield Corp., 516 F.2d 881 (8th Cir. 1975).
Sewage processing plant constructed for sale to city's pollution control corporation by private company was subject to implied warranty of merchantability and of fitness for particular purpose for which it was to be used, and city could recover for breach. Omaha Pollution Control Corp. v. Carver-Greenfield Corp., 413 F.Supp. 1069 (D. Neb. 1976).
Prior Uniform Statutory Provision: None.
1. The last sentence of this section does not mean that a seller is precluded from excluding or disclaiming a warranty which might otherwise arise in connection with the sale provided such exclusion or modification is permitted by section 2-316. Nor does that sentence preclude the seller from limiting the remedies of his or her own buyer and of any beneficiaries, in any manner provided in section 2-718 or 2-719. To the extent that the contract of sale contains provisions under which warranties are excluded or modified, or remedies for breach are limited, such provisions are equally operative against beneficiaries of warranties under this section. What this last sentence forbids is exclusion of liability by the seller to the persons to whom the warranties which he or she has made to his or her buyer would extend under this section.
2. The purpose of this section is to give certain beneficiaries the benefit of the same warranty which the buyer received in the contract of sale, thereby freeing any such beneficiaries from any technical rules as to "privity". It seeks to accomplish this purpose without any derogation of any right or remedy resting on negligence. It rests primarily upon the merchant-seller's warranty under this article that the goods sold are merchantable and fit for the ordinary purposes for which such goods are used rather than the warranty of fitness for a particular purpose. Implicit in the section is that any beneficiary of a warranty may bring a direct action for breach of warranty against the seller whose warranty extends to him or her.
3. This section expressly includes as beneficiaries within its provisions the family, household, and guests of the purchaser. Beyond this, the section is neutral and is not intended to enlarge or restrict the developing case law on whether the seller's warranties, given to his or her buyer who resells, extend to other persons in the distributive chain.
Point 1: Sections 2-316, 2-718, and 2-719.
Point 2: Section 2-314.
Definitional Cross References:
"Buyer". Section 2-103.
"Goods". Section 2-105.
"Seller". Section 2-103.