The plaintiff, Donald Laird has a bachelor of science degree in animal science, had previously been employed at the university's swine research center, had managed a feed mill, had been employed as a herdsman for Hog Breeders, Incorporated, had worked

Question

for five years for Armour & Company at its feeder pig operations, and was a branch manager of the Scribner Co-op, Inc for 14 years. Laird's assistant manager while at the Co-op was Gary Ruwe. When Laird quit the Co-op, Ruwe became the manager. Later, Laird went to Co-op to purchase some feed ingredients for his hogs. In speaking with Ruwe, Laird learned that the Co-op grain bin was not operating properly and therefore the corn was not drying properly. If the corn does not dry properly, it can collect mold and insects. Laird said he would take 1300 bushels of corn if Ruwe could pull the corn out of the middle of the grain bin. The corn was delivered to Laird where he noticed some damaged corn and an odor that indicated that the corn may have mold. Laird did not reject the shipment, however. Laird then began to feed the corn to his hogs. The boars began to develop pneumonia, began vomiting, and would not eat regularly. When it was time for the sows to farrow, the sows had an abnormally high number of miscarriages and stillborns. The ultimate conclusion was that the corn delivered was tainted with vomitoxins, a toxic substance that made the corn unmarketable as feed. Laird sued the Co-op for breach of the implied warranties of fitness for a particular purpose and merchantability. In order to recover under the warranty of fitness for a particular purpose what does Laird have to prove? What is the implied warranty of merchantability? Does Laird have a successful claim with this warranty?

Answer 1

This case is governed by the UCC because the sale of corn stored in a grain bin is the sale of goods. The UCC contemplates two implied warranties of quality with the sales of goods. Laird first alleged a breach of the implied warranty of fitness for a particular purpose. The Code 2-315 states that "where the seller at the time of contracting knows about a particular purpose for which the buyer wants the goods, and knows that the buyer is relying on the seller's skill or judgment, there is (unless disclaimed) an implied warranty that the goods shall be fit for such purpose." Here Laird must show that 1) the Co-op had reason to know of Laird's particular purpose in buying the corn; 2) Co-op had reason to know that Laird was relying on Co-op's skill or judgment to furnish appropriate goods, and 3) Laird, in fact, relied upon Co-op's skill or judgment. The court concluded that Laird was a sophisticated buyer. He in fact was the person who trained Ruwe, Co-op's present manager. Therefore, Laird did not rely on Co-op's skill and knowledge to choose this particular type of corn. Next, consider the implied warranty of merchantability. UCC Section 2-314(1) states, "Unless excluded or modified, a warranty that the goods shall be merchantable (fit for their normal purposes) is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind." Clearly the Co-op is a merchant with respect to the buying and selling of corn. The corn was established by the University of Nebraska to be unmarketable. The Co-op was liable for the breach of this warranty.