63 Cal. 2d 9, 403 P.2d 145 (1965)
In October 1959 plaintiff entered into a conditional sales contract with Southern Truck Sales for the purchase of a truck manufactured by defendant, White Motor Company.1 Plaintiff purchased the truck for use in his business of heavy-duty hauling.2 Upon taking possession of the truck, plaintiff found that it bounced violently, an action known as “galloping.” For 11 months after the purchase, Southern, with guidance from White’s representatives, made many unsuccessful attempts to correct the galloping.3
On July 22, 1960, when slowing down for a turn, plaintiff found that the brakes did not work. The truck overturned, and plaintiff, who was not personally injured, had the damage repaired for $5,466.09.4 In September 1960, after paying $11,659.44 of the purchase price of $22,041.76, plaintiff served notice that he would make no more payments.5 Southern thereafter repossessed the truck and resold it for $13,000.6
Plaintiff brought this action against Southern and White seeking damages, related to the accident, for the repair of the truck, and damages, unrelated to the accident, for the money he had paid on the purchase price and for the profits lost in his business because he was unable to make normal use of the truck.7 During the trial plaintiff dismissed the action against Southern without prejudice. The court found that White breached its warranty to plaintiff and entered judgment for plaintiff for $20,899.84, consisting of $11,659.44 for payments on the purchase price and $9,240.40 for lost profits.8 It found that plaintiff had not proved that the galloping caused the accident and therefore denied his claim for $5,466.09 for the repair of the truck. Both plaintiff and White appeal from the judgment.9
Whether the plaintiff could recover lost profits and the purchase price paid under a theory of breach of express warranty?10
An express warranty arises under Civ. Code § 1732 when the seller makes an affirmation of fact or promise relating to the goods that has a natural tendency to induce the buyer to purchase and the buyer purchases relying thereon.11 Damages for breach include the loss directly and naturally resulting in the ordinary course of events, which encompasses both amounts paid on the purchase price and lost profits.12
Yes. The purchase order signed by plaintiff contained White's express promise that each new motor vehicle would be free from defects in material and workmanship under normal use and service.13 Plaintiff relied on that promise through continued efforts over eleven months to have Southern and White's representatives correct the violent galloping.14 The trial court therefore properly awarded the $11,659.44 plaintiff had paid toward the $22,041.76 purchase price together with $9,240.40 in lost profits as the direct and natural consequence of the breach.15
Plaintiff may recover both the purchase price paid and lost profits on the theory of breach of express warranty.16
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Peters concurred in the affirmance of the judgment but rejected the majority's express-warranty analysis. He concluded that plaintiff never relied on White's warranty because the undisputed evidence showed plaintiff believed only Southern stood behind the truck and had no idea White was a party to the warranty.17 One does not rely upon a mere scrap of paper which calls itself a warranty.
He relies on the fact that the manufacturer will stand behind the product and perform in accordance with the terms of the warranty.18 Here plaintiff admits that he relied on Southern's responsibility under the warranty, but not on White's.
Whether the manufacturer's warranty limitation to repair and replacement operated as a disclaimer of liability for consequential damages?19
No. White's printed form limited its obligation to making good at its factory any defective part.22 Yet Southern and White's representatives made repeated unsuccessful attempts over eleven months to cure the galloping.23 Because the warrantor failed to perform the limited remedy it promised, the limitation clause did not shield White from liability for the consequential damages that flowed from the uncorrected defect.24
The warranty limitation to repair and replacement did not operate as a disclaimer of liability for consequential damages.25
Whether the doctrine of strict liability in tort superseded the warranty provisions for recovery of economic losses?26
Strict liability in tort was fashioned to govern physical injuries caused by defective products and was not intended to displace the carefully articulated rules of warranty that govern economic relations between suppliers and consumers of goods.27
No. The history of strict liability shows it was designed to address the distinct problem of physical injuries, not to undermine the warranty provisions that determine the quality a manufacturer promises and must deliver in commercial transactions.28 Plaintiff sought only commercial losses—lost profits and refund of payments—arising because the truck failed to perform in his heavy-duty hauling business.29 Those losses remain governed by warranty law rather than strict liability.30
The doctrine of strict liability in tort did not supersede the warranty provisions for recovery of economic losses.31
Related opinions on this issue
Peters rejected the majority's dicta limiting strict liability to personal injury.32 He argued that the rationale of Greenman requires application of strict liability to economic loss whenever the buyer is an ordinary consumer powerless to protect himself.33 Drawing an arbitrary line between types of damage contradicts both the purpose of strict liability and the New Jersey Supreme Court's decision in Santor.34
The nature of the damage sustained is immaterial so long as it proximately flowed from the defect. What is important is the relative roles played by the parties and the nature of their transaction.35 The strict liability rule should apply to both sudden accident damage and gradual economic loss or to neither.36
Whether strict liability in tort extends to physical injury to the product itself?37
Physical injury to property is so akin to personal injury that strict liability in tort extends to damage to the product itself, provided the plaintiff proves the defect caused the injury.38
Yes. Physical injury to the truck would have been recoverable under strict liability because such harm is indistinguishable from personal injury for purposes of the doctrine.39 In this case, however, the trial court found plaintiff had not proved that the galloping caused the July 22, 1960 accident in which the truck overturned.40 That finding is controlling absent a request for a more specific finding.41
Strict liability in tort extends to physical injury to the product itself, but plaintiff failed to prove causation for the damage to the truck.
Related opinions on this issue
Peters agreed that strict liability reaches physical injury to the product but criticized the majority for creating an arbitrary distinction between sudden accident damage and gradual economic loss.42 He maintained that both forms of harm proximately caused by the same defect should be treated identically under the Greenman rationale.43 There is no logical distinction between loss of earnings from personal injury and loss of earnings from a disabled vehicle.44
The losses are exactly the same.45 The chains of causation are slightly different, but both are proximate.46