Summary of Daughtrey v. Ashe (1992)

Facts: P purchased a diamond necklace from the D jeweler for $15k; D classified the bracelet diamonds as v.v.s, which is one of the highest ratings for quality, but he only told the P that they were nice; D also told P that if he was not satisfied he would return the purchase price to the P; included in the sale was an appraisal form which listed the value of the bracelet at $25k; 4 years later P discovered the diamonds were not of v.v.s. quality; D offered to refund the purchase price, but P demanded a replacement for the bracelet

P/S: The trial court found that the buyer had not proven that the appraisal was a term or condition of the sale nor a warranty, and denied relief for breach of warranty

Issue: Whether the D’s statement of the grade of the diamonds is mere opinion or whether is was more, thus qualifying it as an express warranty.

Holding: D’s description of the bracelet was more than opinion; it was intended to be a statement of fact.  FOR P, reversed and remanded to determine the buyer’s damages.

Rule: Uniform Commercial Code § 8.2-313(2) provides that it is not necessary to the creation of an express warranty that the seller use formal words such as “warrant” or “guarantee” or that he have a specific intention to make a warranty, but an affirmation merely of the value of the goods or a statement purporting to be merely the seller’s opinion or commendation of the goods does not create a warranty

Rationale: Court ruled that the D gave more than just his opinion on the value of the goods because he specifically described them as “H color and v.v.s. quality.”  If one has superior knowledge and makes a statement about the goods sold and does not qualify the statement as his opinion, the statement will treated as a statement of fact.  Therefore the description was an express warranty under Uniform Commercial Code § 8.2-313(2). Furthermore, the seller’s affirmation of the diamonds’ quality was a part of the basis of the bargain.

NOTES:

— A statement made after the deal closes does not preclude that statement from constituting an express warranty as long as it is part of the basis for the bargain.

— This post-closing statement is considered to be modification, and under the U.C.C., requires no separate consideration.

— Courts do recognize the there is some room for seller’s to “talk up” their product without subsequently being held accountable under warranty theory

— This is referred to as sales puffery