Peter contracted to purchase five (5 ) cases of soda and a vacuum cleaner because Peter was planning a party for his son's graduation. Both contract forms that Peter signed contained exclusion of damages clauses; i.e., each contract stated that the

Question

buyer had no right to sue the seller in the event that the goods were defective. Instead, each seller's sole obligation was to replace or repair the defective goods within a reasonable time of being notified of the defect(s). These clauses in the contract were set forth in the ordinary type of the contract and were not especially conspicuous. The vacuum cleaner was delivered on Friday, the day before the party, when the rugs in Peter's home were quite dirty. The vacuum cleaner did not work properly. Peter notified the seller, who responded by saying that nothing could be done until the following week. Frantic because guests were coming, Peter hired a cleaning service to clean the rugs. While serving the soda to guests, one of the bottle caps burst from an unopened bottle with great force. It struck Peter in the eye and he required medical treatment and hospitalization. Eventually, Peter sued both sellers for damages. Peter sought the expense of the cleaning service from one. From the other, Peter sought damages for personal injury, including his medical and hospitalization expenses. Both defendant-sellers cited the exclusion of damages clauses as their defense.

Answer 1

An exclusion of damages clause does not have to be conspicuously set forth in the contract. Generally, such clauses are upheld unless they are found to be unconscionable. The clause in regard to the vacuum cleaner would be enforceable, so Peter would lose that lawsuit.

Where a defective product causes injury to a consumer, however, such clauses are prima facie unconscionable. Accordingly, the likelihood is that the clause would not effectively limit Peter's remedies, and Peter would recover in the personal injury case.?