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Keywords

contractlawsuitplaintiffdefendantdamagesattorneyappealtrialplaintiff's attorney

contractplaintiffdefendantdamagesappealtrial

Related Cases

McGinnis v. Wentworth Chevrolet Co., 295 Or. 494, 668 P.2d 365, 37 UCC Rep.Serv. 130

Facts

On July 25, 1978, the Plaintiff purchased a new 1978 Chevrolet El Camino from the Defendant for $5,923. Shortly after taking possession, the Plaintiff encountered numerous defects, including cosmetic issues and major mechanical problems. After several unsuccessful repair attempts, the Plaintiff's attorney formally revoked acceptance of the vehicle and sought a refund or a substitute vehicle. The Defendant refused to acknowledge the revocation, leading the Plaintiff to file a lawsuit seeking the return of the purchase price and additional damages for storage and rental fees.

On July 25, 1978, Plaintiff purchased a new 1978 Chevrolet El Camino automobile from Defendant. The purchase price was $5,923. Almost immediately after taking possession, Plaintiff began to discover problems with the automobile, ranging from cosmetic defects such as chipping paint and scratches to major mechanical problems such as a tendency for the engine to stall at intersections.

Issue

The main legal issue is the scope of damages recoverable by a buyer upon justifiable revocation of acceptance of a defective automobile.

The question presented is the scope of damages recoverable by a disappointed automobile buyer upon her justifiable revocation of acceptance.

Rule

Under the Uniform Commercial Code, a buyer who justifiably revokes acceptance of nonconforming goods is entitled to various remedies, including the right to cancel the contract, recover the price paid, and seek incidental and consequential damages.

Resolution of this case is governed by the sales provisions of the Uniform Commercial Code (UCC) as adopted in this state, ORS 72.1010 et seq.

Analysis

The court analyzed whether the rental of a substitute automobile constituted a reasonable 'cover' under the UCC. It concluded that rental costs do not translate into a comparable value for loss-of-bargain calculations and therefore do not qualify as incidental damages. The court emphasized that the UCC's 'cover' remedy is intended for actual purchases of substitute goods, not rentals.

Thus, a buyer in Plaintiff's position is not relegated merely to cancellation of the contract and recovery of the price paid thereunder (as apparently held by the trial court); rather, she also potentially is entitled to a catalog of other remedies, one of which is 'cover'.

Conclusion

The Supreme Court reversed the Court of Appeals' decision that allowed recovery for rental costs, stating that such costs were not recoverable as incidental damages under the UCC. The case was remanded to the trial court for further proceedings.

In conclusion, that part of the opinion of the Court of Appeals granting Plaintiff recompense for her automobile rental costs as an expense incidental to 'cover' is reversed.

Who won?

The prevailing party is the Defendant, Wentworth Chevrolet Co., as the Supreme Court ruled in their favor regarding the non-recoverability of rental costs.

The Court of Appeals' opinion evinces a misconception as to the purpose and function of the UCC's 'cover' remedy.

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