## Facts

- Daniel J. Seely, a commercial hauler, bought a new White truck in October 1959 from a dealer under a conditional sales contract for heavy-duty hauling.
- From delivery, the truck “galloped” (bounced violently); the dealer, with manufacturer involvement, attempted repairs for about eleven months without success.
- On July 22, 1960, the brakes allegedly failed as Seely slowed for a turn; the truck overturned, causing no personal injury but $5,466.09 in repair costs.
- By September 1960, Seely had paid $11,659.44 of the $22,041.76 purchase price; he stopped payments, and the dealer repossessed and resold the truck for $13,000.
- Seely sued the manufacturer (and initially the dealer) seeking (1) accident-related repair costs and (2) economic losses, including sums paid toward the purchase price and lost profits from impaired use.
- The trial court found breach of express warranty and awarded Seely $20,899.84 (purchase-price payments plus lost profits) but denied accident repair damages for lack of proof that the defect caused the overturn.
- Both sides appealed: the manufacturer challenged the economic-loss award; Seely challenged denial of accident damages and sought recovery of economic loss under strict products liability.

## Issues

1. Whether the manufacturer’s statements in the purchase order created an express warranty supporting recovery of purchase-price payments and lost profits.
2. Whether strict products liability permits recovery of purely economic loss when the product fails to perform as expected but causes no personal injury and no proven damage beyond the product-related loss.
3. Whether Seely proved causation between the asserted defect and the accident so as to recover the repair costs.

## Decision

- The California Supreme Court affirmed the award of purchase-price payments and lost profits based on breach of express warranty.
- The court refused to extend strict products liability in tort to allow recovery of purely economic loss.
- The court affirmed denial of accident repair damages because Seely did not prove the defect caused the accident.

## Legal Principles

- An affirmation of fact or promise relating to goods can constitute an express warranty if it would induce purchase and the buyer relies on it.
- Warranty and contract law govern “economic loss” (disappointed commercial expectations, including lost profits and price-related loss) arising from a product’s failure to perform.
- Strict products liability in tort is directed at physical injury and damage to property other than the product itself; it does not provide a general remedy for inadequate product performance.
- Damages for accident-related loss require proof that the defect caused the accident; absent causation, recovery is unavailable under either warranty or strict liability on the facts found.

## Conclusion

The court maintained a division between tort and contract in product cases: strict liability addresses safety-related harms, while purely economic losses from a product’s poor performance are recoverable, if at all, under warranty principles, and accident damages still require proof of causation.


Seely v. White Motor Co., 63 Cal. 2d 9, 403 P.2d 145, 45 Cal. Rptr. 17 (1965)