## Facts

- Raymond W. Clark, a custom farmer paid by acreage, bought a new International Harvester tractor from McVey’s, Inc., an authorized dealer.
- Clark alleged defects in the tractor’s valve train (including push rods and rocker arms) and torque amplifier caused repeated breakdowns.
- The alleged defects caused downtime during the farming season, resulting in lost profits and repair costs.
- Clark claimed no personal injury and no damage to property other than the tractor itself.
- Clark sued the manufacturer and dealer for negligent design/manufacture and for breach of express and implied warranties; McVey’s cross-claimed against the manufacturer for indemnity.

## Issues

1. Whether a buyer may recover purely economic losses (lost profits, loss of use, and repair costs to the product itself) in a negligence action against the manufacturer and seller when there is no personal injury or other property damage.
2. Whether summary judgment dismissing express and implied warranty claims was proper given factual disputes about warranty terms and whether a limited repair-or-replace remedy failed of its essential purpose under the UCC.

## Decision

- The Idaho Supreme Court reversed the judgment awarding Clark economic damages on his negligence claim.
- The court held that purely economic loss from a product malfunction, without personal injury or other property damage, is not recoverable in negligence.
- The court reversed summary judgment for defendants on Clark’s express and implied warranty claims.
- The case was remanded for further proceedings on warranty issues, including the scope of warranties and whether the limited remedy failed of its essential purpose.

## Legal Principles

- Negligence and products-liability tort theories do not allow recovery for purely economic loss when the defect causes only deterioration or malfunction of the product itself and no personal injury or damage to other property.
- Economic losses from disappointed commercial expectations are generally addressed through contract and UCC warranty remedies rather than tort.
- Under UCC § 2-719, a contractual limitation of remedy to repair or replacement may be ineffective if it fails of its essential purpose.
- Whether a limited remedy failed of its essential purpose is commonly a fact question that cannot be resolved on summary judgment when material facts are disputed.

## Conclusion

The court barred tort recovery for Clark’s lost profits and repair costs because the alleged harm was solely economic and confined to the tractor, but it allowed Clark to pursue those losses under UCC warranty theories on remand, subject to proof of warranty terms and failure of any limited repair remedy.


Clark v. Int'l Harvester Co., 581 P.2d 784 (Idaho 1978)