Remedies for Breach of Warranty V
Bill Long 12/31/05
Williston's Equitable Temperament; the Language of USA
Williston then poses the practical question:
"Do merchants who value their reputation for fair dealing take back goods which they have untruthfully, though innocently, asserted possessed particular qualities? Do reasonable buyers who have brought goods under such circumstances expect the seller to take back the goods and refund the price. These are the essential inquiries, and there can be little doubt of the answers," 16 HLR at 469.
The questions are rhetorical. Of course merchants would take back the goods when they are not as warranted. Of course buyers expect a refund in such a case. American practical realities, therefore, combined with equitable reasoning, will blow the fine and convoluted English distinctions to smithereens, even as we often take over the language which confused the English.*
[*So this is a curious but interesting development in intellectual history. We discard what comes before us but we are often imprisoned in the language used by the very predecessors we discard. The same is true of family histories. We reject much of what we inherit or try to discard it, but it clings to us like Monster Glue claims to make objects stick together.]
Williston finally makes the observation that I was waiting for him to make: talking about collateral transactions and warranties as collateral may be true at time, but it is only true in a "formal" sense. When you think of it for more than a minute, you see that "no one can doubt that in such a bargain the inducement for the payment or promise to pay the price is in part, and in an essential party, the giving of the warranty" (Id. at 471). So, courts can adopt the pleading rules which do not require plaintiff to assert a warranty, but still the defendant can allege and prove the existence of these "collateral stipulations" in the same action. But one shouldn't confuse matters of form with those of substance.
"The remedy of rescission, if allowed at all, is allowed on broad principles of justice. The basis of the remedy is that the buyer has not bought what he bargained for. In early times, the court said that what one party to a bilateral contract bargained for was the obligation of the other, and that if he got that obligation he could not complain because the obligation was not performed....but since the time of Lord Mansfield [late 18th century], courts have no longer been willing to dispose of the matter on so technical a ground. It is apparent that the real thing bargained for was the performance, and that the obligation was merely a means to that end.....Similarly...it is obvious that when a buyer buys a horse, warranted sound, the real thing he is after is a sound horse. It is the performance of the warranty, not damages for the breach of it, which is in his mind. He does not want an unsound horse, worth half the money, and the difference in damages. He wants to be perfectly sure that he is getting a sound horse....," Id. at 472.
Once you get this far, you really don't need to read his treatise on the subject (1909), though his treatment of the subject there develops the language here in some particulars (1009-1015).
(3) The Language of the USA
Now I think we are fully ready to understand the language of sec. 69(a) of the USA of 1906. Here it is:
(1.) Where there is a breach of warranty by the seller, the buyer may, at his election:
(a.) Accept or keep the goods and set up against the seller, the breach of warranty by way of recoupment in diminution or extinction of the price;
(b.) Accept or keep the goods and maintain an action against the seller for damages for the breach of warranty;
(c.) Refuse to accept the goods, if the property therein has not passed, and maintain an action against the seller for damages for the breach of warranty;
(d.) Rescind the contract to sell or the sale and refuse to receive the goods, or if the goods have already been received, return them or offer to return them to the seller and recover the price of any part thereof which has been paid.
Let's march through very briefly. Instead of the two subparagraphs of the Sale of Goods Act ("SGA") we have four. But 69(1)(a) is the same as SGA 53(1)(a), except that Williston has added the word "recoupment." I have explained the notions of recoupment and set-off earlier. Subsection 69(1)(b) is the same as the SGA 53(1)(b). I have given the history of why there would be two remedies here. Subsection 69(1)(c) doesn't appear in the SGA but is implied. That is, Williston makes explicit what was not really brought out in its fullness in the SGA. Subsection 69(1)(d), then, is Williston's new section. This new section was added because of Williston's equitable concerns, as described in the previous essay. A seller may now return the goods even after returning them and recover the price. This little section, then, is a triumph of American pragmatism, a triumph that gets beyond the rather narrow English formalism of the technical language of warranty.
Conclusion--Fast Forward to Today
Now we are under the UCC. Section 2-608, on "revocation of acceptance," preserves the principle first articulated by Williston in 69(1)(d). But the UCC wanted to get rid of the old language of rescission. Thus, the quintessential legal realist Karl Llewellyn was indebted to the so-called quintessential legal formalist Samuel Williston but both of them stood against the old common law tradition.
It is my hope that this kind of telling of the story of sales law in America will stimulate other such historical studies. I, at least, have been bitten by the bug.
Copyright © 2004-2007 William R. Long