5 Ohio St. 3d 181, 5 O.B.R. 398, 449 N.E.2d 1289
The buyer, a young clerical secretary of limited financial resources, purchased an automobile from Bill Swad Chrysler-Plymouth, Inc.1 After taking possession, she encountered chronic steering, transmission, and brake problems as well as an array of cosmetic flaws.23
Upon notifying the seller of her intent to rescind the purchase agreement due to these defects, the buyer continued to operate the vehicle.4 The odometer registered only 12,000 miles at the time she provided the revocation notice.5 The seller failed to provide any instructions regarding the return of the vehicle following the notification.6
Instead, the seller's successor, East, undertook repair attempts on the automobile even after the buyer tendered her notice of revocation.7 These repair efforts often introduced new defects while leaving prior issues unresolved.8 Given her financial constraints, the buyer remained in possession of the car to meet her needs rather than securing a second vehicle while still obligated on the first loan.9
At the time of trial, the odometer showed less than 35,000 miles.10 The dispute advanced from the trial court through the court of appeals to the Ohio Supreme Court, which considered the appeal.11
Whether the buyer's continued operation of the vehicle after notifying the seller of her intent to rescind the purchase agreement waived her right to revoke her initial acceptance?12
Revocation of acceptance under R.C. 1302.66 must occur within a reasonable time after the buyer discovers or should have discovered the ground for it.13 It must occur before any substantial change in condition of the goods which is not caused by their own defects.14 Whether continued use of goods after notification of revocation vitiates such revocation is solely dependent upon whether such use was reasonable.15 This is a question to be determined by the trier of fact.16
No. The buyer did not waive her right to revoke her initial acceptance.17 The buyer, a young clerical secretary of limited financial resources, continued to operate the vehicle after notifying the seller of her intent to rescind the purchase agreement due to the defects.18 The seller failed to provide any instructions regarding the return of the vehicle following the notification.
The seller's successor East undertook repair attempts on the automobile even after the buyer tendered her notice of revocation.19 Given her financial constraints, the buyer remained in possession of the car to meet her needs rather than securing a second vehicle while still obligated on the first loan. The odometer registered only 12,000 miles at the time she provided the revocation notice and less than 35,000 miles at the time of trial, so the seller was not prejudiced.20
The buyer's continued operation of the vehicle after notifying the seller of her intent to rescind the purchase agreement did not waive her right to revoke her initial acceptance.21
Whether the nonconformities substantially impaired the value of the automobile to the buyer?22
The buyer may revoke acceptance of a lot or commercial unit whose nonconformity substantially impairs its value to the buyer if accepted on the reasonable assumption that its nonconformity would be cured and it has not been seasonably cured.23 Any defect that shakes the buyer’s faith or undermines his confidence in the reliability and integrity of the purchased item is deemed to work a substantial impairment of the item’s value and to provide a basis for revocation of the underlying sales agreement.24
Yes. The nonconformities substantially impaired the value of the automobile to the buyer.25 The buyer encountered chronic steering, transmission, and brake problems as well as an array of cosmetic flaws after taking possession.26 The fears occasioned by the recurrent brake failings, steering malfunctions and other mechanical difficulties, as well as the utter frustration caused by the seemingly endless array of cosmetic flaws, constituted nonconformities giving rise to the remedy of revocation.27
The nonconformities substantially impaired the value of the automobile to the buyer.
Whether the warranties furnished by the seller provided the buyer's sole legal remedy for the vehicle's defects?28
Where a new car express warranty limits a buyer’s remedy to repair and replacement of defective parts, but the new car is so riddled with defects that the limited remedy of repair and replacement fails its essential purpose, the buyer may institute an action to recover damages for breach of warranty under R.C. 1302.88(B) and, in a proper case, incidental and consequential damages under R.C. 1302.88(C) and 1302.89.29
No. The warranties furnished by the seller did not provide the buyer's sole legal remedy for the vehicle's defects.3031 The automobile was severally and severely flawed, and the seller proved incapable of curing its defects.32 These repair efforts often introduced new defects while leaving prior issues unresolved. The hour glass has run on the seller's efforts to place the car in good running order.33
The warranties furnished by the seller did not provide the buyer's sole legal remedy for the vehicle's defects.
Whether the seller is entitled to a setoff for the reasonable value of the buyer's use of the automobile after revocation?34
No. Although both the court of appeals and this court state that the seller should be entitled to such an offset against the judgment for the reasonable value of the use of the automobile after the revocation, the seller should be given an opportunity to present evidence of the reasonable value of such use, or the trial court should take judicial notice of the fair market value of the use of such an automobile.3738
The case should be remanded to the trial court for a determination of the amount due the dealer from the buyer as a setoff due to the buyer’s use of the goods after revocation.39
Related opinions on this issue
I concur in the syllabus law as set forth in this case, but would remand to the trial court for a determination of the amount due the dealer from the buyer as a setoff due to the buyer’s use of the goods after revocation.40 Both the court of appeals and this court state that Swad should be entitled to such an offset against the judgment for the reasonable value of the use of the automobile after the revocation.41 The need for any such evidence when the appellant was asserting that the buyer had waived any right to revoke acceptance would, from the standpoint of trial procedure, have been highly questionable.42
The seller should be given an opportunity to present evidence of the reasonable value of such use, or the trial court should take judicial notice of the fair market value of the use of such an automobile.