## Facts

- Cricket Alley Corporation operated multiple women’s clothing stores and used a Wang computer at its headquarters.
- Its existing cash registers could not communicate with the Wang system, requiring manual transfer of inventory and sales data.
- DTS marketed computerized cash registers to retail merchants and represented—through advertising and a convention demonstration—that DTS registers could work with Wang computers.
- Cricket Alley purchased DTS registers based on the representation that the registers would communicate with its Wang computer via telephone lines.
- After installation, the DTS registers failed to communicate as promised; any successful operation was intermittent.
- Cricket Alley continued manual data-handling tasks and incurred additional labor costs.
- Cricket Alley sued DTS for breach of express warranty and sought incidental and consequential damages, including increased labor costs.

## Issues

1. Whether intermittent or occasional performance defeats a claim for breach of an express performance warranty.
2. Whether a buyer alleging breach of an express performance warranty must prove the specific design or manufacturing defect causing nonperformance.
3. Whether the trial court erred in modifying a pattern jury instruction (PIK Civ.2d 13.15) for an express-warranty theory.
4. Whether consequential damages for increased labor costs were recoverable under K.S.A. 84-2-715(2) based on the seller’s reason to know of the buyer’s needs.
5. Whether the evidence of increased labor costs was sufficiently certain to support the jury’s award.

## Decision

- The Kansas Supreme Court affirmed the judgment on the jury verdict for Cricket Alley (\$78,781.79).
- The court held there was sufficient evidence of both the existence of an express warranty (Wang compatibility/communication) and breach.
- The court held that occasional performance did not preclude a finding of breach of an express warranty.
- The court approved the trial court’s modified use of PIK Civ.2d 13.15 because, as altered, it accurately stated the applicable law.
- The court held consequential damages for increased labor costs were properly submitted to the jury under K.S.A. 84-2-715(2).
- The court found substantial competent evidence supported the consequential-damages award and rejected the claim that the proof was impermissibly speculative.

## Legal Principles

- Evidence that goods sometimes perform as warranted does not defeat an express-warranty claim if the goods fail to perform as promised in the manner reasonably expected.
- In an action for breach of an express performance warranty, the buyer must prove the warranty and breach; the buyer need not identify the specific internal defect preventing warranted performance, particularly with sophisticated goods.
- Pattern jury instructions may be modified to fit an express-warranty theory if the modified instruction correctly states the law and does not mislead the jury.
- Under K.S.A. 84-2-715(2), consequential damages include losses resulting from the buyer’s general or particular requirements and needs that the seller had reason to know at contracting and that could not reasonably be prevented.
- A manufacturer of sophisticated goods marketed to retail merchants is charged with knowledge of the general needs of the product’s users for purposes of consequential-damages foreseeability.
- Consequential damages in warranty cases need not be calculated with precision; a reasonable basis in the evidence supporting an approximation of loss is sufficient, including proof of increased labor costs caused by nonperformance.

## Conclusion

The court sustained liability for breach of an express warranty that computerized registers would communicate with an existing computer system, holding that sporadic functionality and inability to pinpoint a technical defect do not bar recovery, and that increased labor costs may be awarded as consequential damages when the seller had reason to know the buyer’s operational needs and the loss is supported by substantial evidence.


Cricket Alley Corp. v. Data Terminal Sys., Inc., 240 Kan. 661, 732 P.2d 719 (Kan. 1987)