## Facts

- Carl and Sam Prutch, farming as Diamond Trading Co., bought four Ford-manufactured implements (tractor, plow, disc harrow, hay baler) from Ford’s dealer, Baldridge Implement Co.
- The Prutches alleged the implements were defective and breached express and implied warranties.
- They claimed the nonconforming equipment reduced yields and interfered with production and harvest, causing consequential crop-loss damages during the year of sale.
- A first trial ended in a mistrial; after a second trial, a jury awarded $60,200 against Ford and found Baldridge not liable.
- The Colorado Court of Appeals reversed and remanded for a third trial, requiring (among other things) proof identifying which implement caused which damages, proof each defect existed when it left Ford’s control, and timely direct notice to Ford.
- The Colorado Supreme Court granted review.

## Issues

1. Whether buyers seeking consequential crop-loss damages had to prove which specific implement caused each specific portion of the loss.
2. Whether buyers had to prove each defect existed when the product left the manufacturer’s control, rather than at tender of delivery/receipt by the buyer.
3. Whether UCC notice of breach required timely direct notice to the manufacturer, or whether notice through the dealer could suffice.
4. Whether consequential damages required the manufacturer’s actual knowledge of the specific harm, or only foreseeability of the type of harm.
5. Whether the buyers failed to mitigate damages from the alleged defects.

## Decision

- The Supreme Court of Colorado reversed the Court of Appeals and reinstated the $60,200 jury verdict against Ford.
- The court held the buyers were not required to allocate crop losses item-by-item among multiple implements to recover a lump-sum consequential damages award, particularly where jury instructions limited which equipment could support liability.
- The court rejected a requirement that the buyers prove the defect existed when the goods left Ford’s control; it was sufficient to show nonconformity when the goods were received/tendered.
- The court held notice given to the dealer that reached the manufacturer satisfied the UCC notice requirement; direct notice to Ford was not mandatory absent prejudice.
- The court held consequential crop-loss damages were recoverable based on foreseeability; Ford need not have had actual knowledge of the precise losses.
- The court rejected Ford’s mitigation defense, concluding the Prutches acted reasonably to minimize losses.

## Legal Principles

- In warranty actions under UCC Article 2, a buyer generally satisfies the defect/nonconformity element by showing the goods were nonconforming at tender of delivery/receipt, without proving the condition existed at the moment the goods left the manufacturer’s control.
- UCC notice of breach may be satisfied by notice through a dealer within the distribution chain when the manufacturer receives notice and is not unfairly prejudiced; direct manufacturer notice is not categorically required.
- Consequential damages for breach of warranty may be awarded when the damages were a foreseeable result of the breach at the time of contracting; actual knowledge of the specific loss is not required.
- A lump-sum verdict for consequential damages need not be set aside solely because multiple products were involved, where the instructions and evidentiary theory permit the jury to award damages without itemized apportionment.
- Mitigation is evaluated by reasonableness under the circumstances; continued efforts to operate and salvage production can support a finding of reasonable mitigation.

## Conclusion

The Colorado Supreme Court reinstated the farmers’ warranty verdict against Ford, holding that foreseeable crop-loss consequential damages were recoverable, dealer-mediated notice satisfied the UCC, and the buyers were not subject to heightened proof requirements on defect timing or damage apportionment.


Prutch v. Ford Motor Co., 618 P.2d 657 (Colo. 1980)