Question

Resale, Inc. is a dealer in used and rebuilt equipment. Resale obtained a used crane originally manufactured by the Crane Co. The crane was designed for heavy lifting. Resale installed a new engine and a new lifting cable on the crane. The cable was manufactured by Cable Co. Resale then sold the crane "as is" to Contractor, in a contract of sale which disclaimed all express and implied warranties. Contractor then used the crane in construction work. While using the crane on the job six months later, an accident occurred. Employee, who was operating the crane at the time, was severely injured, and the construction job was delayed for a week while a replacement crane and operator were obtained. This accident occurred when the lifting cable proved to be defective and snapped, causing the steel beam that was being lifted to fall on the crane and injure Employee. If Contractor sues Resale based on breach of warranty for damages caused by the delay in the construction project, who will prevail? A. Contractor should prevail because contract disclaimers are ineffective in tort law. B. Contractor should prevail because the Crane was defective. C. Resale should prevail because the Crane was sold "as is." D. Resale should prevail because economic loss is not recoverable in breach of warranty.

Answer 1

Resale, Inc. is likely to prevail in this case because they sold the crane "as is," disclaiming all express and implied warranties. So the correct option is C. Resale should prevail because the Crane was sold "as is."

Explanation:

Resale, Inc. is likely to prevail in this case because they sold the crane "as is," disclaiming all express and implied warranties. The disclaimer of warranties is a crucial factor in determining liability in such cases. When a seller explicitly disclaims warranties, it serves as a defense against claims related to the condition of the sold item. In this instance, the disclaimer shields Resale, Inc. from liability for the defective lifting cable, and the Contractor's claim based on breach of warranty is weakened.

The "as is" sale signifies that the buyer accepts the item in its current condition, with all faults. This legal principle is generally upheld, especially when explicitly stated in the contract of sale. In this context, Resale provided the crane in a condition known to the Contractor, and the disclaimer serves as a legal shield against warranty claims. Despite the unfortunate accident and resulting damages, the contractual arrangement between Resale and the Contractor, which disclaims warranties, would likely hold in court.

In conclusion, the disclaimer of warranties in the contract between Resale and Contractor is a decisive factor. Resale, Inc. is likely to prevail in this case, as the "as is" sale and the explicit disclaimer shield them from liability for the defective lifting cable that led to the accident. So the correct option is C. Resale should prevail because the Crane was sold "as is."