## Facts

- Patricia and Earl Gasque bought a new 1979 Fiat station wagon from Mooers Motor Car Co., Inc. on February 21, 1979.
- After delivery, the car exhibited numerous problems, including water leaks, shifting and gear issues, heater malfunction, electrical failures, starting and idling problems, and door defects.
- The Gasques repeatedly returned the vehicle to Mooers for repairs.
- On September 19, 1979, the Gasques notified Mooers that they were revoking acceptance and demanded either a refund or a replacement vehicle; Mooers refused.
- The Gasques continued using the vehicle after the revocation notice; it had about 5,400 miles at notice and about 8,000 miles when they purchased another vehicle in November 1979.
- On January 8, 1980, the Gasques filed an equity action against Mooers and Fiat Motors of North America, Inc., seeking cancellation of the sale and return of the purchase price or a replacement vehicle, plus punitive damages, interest, costs, and attorney’s fees; they did not seek compensatory damages.
- After an ore tenus hearing, the trial court struck the evidence as to Fiat (no contract with buyers) and entered judgment for Mooers, finding no substantial impairment and no timely/reasonable revocation given continued use.

## Issues

1. Whether the buyers proved a right to revoke acceptance under Va. Code § 8.2-608 by showing a nonconformity that substantially impaired the vehicle’s value to them.
2. Whether the buyers’ continued post-notice use of the automobile was commercially reasonable so as to preserve revocation of acceptance.
3. Whether revocation of acceptance is available against a remote manufacturer not in contractual privity with the buyers.
4. Whether punitive damages are recoverable in a revocation-of-acceptance action absent an independent tort and an award of compensatory damages.

## Decision

- The Supreme Court of Virginia affirmed judgment for Mooers.
- The Court upheld the finding that the defects did not substantially impair the car’s value to the buyers within the meaning of Va. Code § 8.2-608.
- The Court held the buyers’ extensive continued use after notice of revocation was not commercially reasonable and defeated revocation.
- The Court affirmed the striking of the evidence as to Fiat, holding revocation/rescission is unavailable against a party with no sales contract with the buyer.
- The Court held punitive damages were unavailable because no independent tort and no compensatory damages were pleaded or proved.

## Legal Principles

- Revocation of acceptance under Va. Code § 8.2-608 is available only if the buyer proves a nonconformity that substantially impairs the goods’ value to the buyer and the statutory conditions for revocation are met.
- “Substantial impairment” has a buyer-focused component but requires objective evidentiary support; absent proof of a special purpose, the customary purpose of the goods is presumed.
- For automobiles, “driveability” may serve as an appropriate objective measure in evaluating whether defects substantially impair value.
- Revocation must occur within a reasonable time after discovery (or when discovery should have occurred) and requires notice; the buyer bears the burden to show commercially reasonable conduct regarding the goods after revocation.
- After revocation, the buyer holds the goods as the seller’s bailee; continued use is generally wrongful unless justified as commercially reasonable, and extensive use after notice can bar revocation.
- Revocation of acceptance is a contract remedy tied to the particular sales contract and is not available against a remote manufacturer lacking privity with the buyer.
- Punitive damages are not recoverable for breach of contract unless an independent willful tort is alleged and proved and compensatory damages are awarded.

## Conclusion

The court held that revocation of acceptance was unavailable because the buyers failed to prove substantial impairment and their extensive continued use after notice was commercially unreasonable; revocation could not be asserted against the remote manufacturer without privity, and punitive damages were barred absent an independent tort and compensatory damages.


Gasque v. Mooers Motor Car Co., 227 Va. 154, 313 S.E.2d 384 (1984)