## Facts

- A construction contractor held a PennDOT road reconstruction contract requiring use of an acceptable concrete paver meeting specified performance requirements.
- The contractor negotiated with a retail equipment seller for purchase of a Curbmaster concrete spreader/paver; the seller knew the PennDOT specifications and intended use.
- The manufacturer’s vice-president participated in pre-sale communications and represented the paver would be suitable for the PennDOT project.
- The parties executed the seller’s standard form purchase agreement for approximately $85,125; fine-print terms on the reverse purported to disclaim warranties and exclude implied warranties.
- The same fine-print terms purported to limit the buyer’s remedy to return of the purchase price (less wear and use) and to exclude incidental and consequential damages.
- The reverse-side terms were not specifically called to the buyer’s attention and were not shown to be negotiated.
- The paver was delivered and used on the project but did not perform acceptably, including an inability to lay concrete evenly.
- The seller and manufacturer attempted repairs during the project, but performance problems persisted, PennDOT remained dissatisfied, and the contractor incurred added labor and related costs to complete an acceptable surface.
- The buyer sued the seller for breach of contract and warranty; the seller joined the manufacturer for indemnification.
- After a bench trial, the trial court entered judgment for the buyer against the seller and manufacturer jointly for $146,811.43 plus interest, and granted the seller indemnification from the manufacturer.

## Issues

1. Whether the seller’s fine-print warranty disclaimers and exclusions of implied warranties were effective under the U.C.C. and contract law.
2. Whether the contractual limitation of remedy to refund (and exclusion of consequential/incidental damages) was enforceable against the buyer.
3. Whether the limited remedy failed of its essential purpose given repeated but unsuccessful repair attempts and continued nonconforming performance.
4. Whether the evidence supported the damages award and whether a credit or set-off was required for value retained by the buyer.
5. Whether the retail seller was entitled to indemnification from the manufacturer for the buyer’s recovery.

## Decision

- The Superior Court affirmed the judgment on liability for breach of warranty against the manufacturer and upheld the trial court’s rejection of the seller’s and manufacturer’s attempted warranty disclaimers and remedy limitations.
- The court held the limited remedy did not bar recovery where the equipment could not be made to perform as represented and required for the job, despite multiple repair efforts.
- The court affirmed the seller’s right to indemnification from the manufacturer.
- The court remanded solely for the trial court to address an appropriate set-off or credit in calculating damages, and otherwise affirmed.

## Legal Principles

- U.C.C. warranty disclaimers and exclusions of implied warranties must be conspicuous and presented so the buyer has a fair opportunity to become aware of them; fine-print, reverse-side boilerplate not brought to the buyer’s attention may be ineffective.
- Express assurances or representations regarding suitability for a known purpose can defeat or limit reliance on boilerplate disclaimers that contradict those assurances.
- Under U.C.C. § 2-719, a limitation of remedy (e.g., repair, replacement, or refund) is enforceable only if it does not fail of its essential purpose; persistent nonconformity after repeated repair efforts can render the limitation ineffective.
- When a limited remedy fails of its essential purpose, contractual exclusions of consequential damages may not preclude recovery of damages caused by the breach.
- A damages award for breach may require a set-off or credit for value retained by the buyer to avoid overcompensation, depending on the evidence.
- A retail seller held liable to a buyer due to a manufacturer-caused defect may obtain indemnification from the manufacturer when the manufacturer bears primary responsibility for the nonconformity and resulting loss.

## Conclusion

The court upheld warranty-based recovery for a contractor whose paver repeatedly failed to meet a known PennDOT-required purpose, refused to enforce unbargained fine-print disclaimers and remedy limits, allowed consequential damages after the limited remedy failed, affirmed manufacturer indemnification to the seller, and remanded only to consider an appropriate set-off in the damages calculation.


Moscatiello v. Pittsburgh Contractors Equip. Co., 407 Pa. Super. 363, 595 A.2d 1190 (1991)