## Facts

- Frances McCarty purchased four Denman tires from a “Korvettes Tire & Auto Centers” location whose branding and invoice referenced E.J. Korvette, Inc.; the center was operated by Tires, Inc. under a franchise/lease arrangement.
- The invoice included an “All‑Road‑Hazards Tire Guarantee” covering specified road hazards, including “blow out,” for 36,000 miles in normal passenger use.
- The guarantee stated that if a tire failed under the guarantee, the buyer could return it for replacement, paying a prorated portion of the purchase price plus full federal tax.
- The guarantee also provided: neither the manufacturer nor the tire center would be liable for consequential damages, and liability was limited solely to replacement of the product.
- Within the guarantee period, the McCartys’ vehicle allegedly suffered a right-rear tire blowout, left the road, and rolled over, causing personal injuries and property damage.
- The McCartys sued E.J. Korvette, Inc., Tires, Inc., and the tire manufacturer for breach of express warranty, breach of implied warranties, and negligence.

## Issues

1. Whether a clause limiting the buyer’s remedy to replacement and excluding consequential damages is enforceable under UCC §§ 2‑316 and 2‑719 when a consumer good allegedly fails and causes personal injury and property damage.
2. Whether UCC § 2‑719(3) shifts to the seller the burden to prove that a consequential-damages exclusion is not unconscionable, or instead leaves the burden on the buyer to prove unconscionability.
3. Whether, under UCC § 2‑719(2), a replacement-only remedy may “fail of its essential purpose” when the alleged breach results in severe personal injury and significant property loss.

## Decision

- The appellate court reversed the directed verdict for the defendants on the warranty claims and remanded for a new trial.
- The court held that the replacement-only remedy and consequential-damages exclusion were not automatically enforceable; they remained subject to UCC § 2‑719(2) (failure of essential purpose) and § 2‑719(3) (unconscionability).
- The court held that the party asserting unconscionability bears the burden of proof; the “prima facie unconscionable” language in § 2‑719(3) did not shift that burden to the seller.
- The court concluded the record permitted factfinder consideration of whether the limited remedy failed of its essential purpose and whether the consequential-damages exclusion was unconscionable in this consumer personal-injury context.

## Legal Principles

- An affirmative written guarantee covering specified failures within a stated mileage period can create an express warranty under UCC § 2‑313.
- Parties may limit remedies (e.g., to repair or replacement) under UCC § 2‑719(1), but such limits are constrained by UCC § 2‑719(2) and (3).
- If circumstances cause an exclusive or limited remedy to fail of its essential purpose, the buyer may pursue the UCC’s general remedies, including consequential damages. UCC § 2‑719(2).
- Limiting or excluding consequential damages for personal injury arising from consumer goods is prima facie unconscionable, but not automatically void; unconscionability remains a court question informed by the evidentiary record. UCC § 2‑719(3).
- The party asserting unconscionability bears the burden of proving it, notwithstanding § 2‑719(3)’s prima facie formulation.

## Conclusion

Because the plaintiffs presented evidence that a warranted consumer tire failed within the warranty period and allegedly caused serious injuries and substantial property damage, the enforceability of the replacement-only remedy and consequential-damages exclusion required analysis under UCC § 2‑719(2) and (3) and could not be resolved against the buyers by directed verdict.


McCarty v. E.J. Korvette, Inc., 347 A.2d 253 (Md. Ct. Spec. App. 1975)