## Facts

- Paul Vlases ordered day-old hybrid Leghorn chicks from Montgomery Ward through its Pennsylvania outlet store for a commercial egg-production operation.
- In December 1961, Vlases received approximately 2,200 chicks and placed them in a new coop with new equipment and substantial sanitary precautions; he closely monitored the flock.
- Within weeks, the chicks showed signs of illness, including feather loss; subsequent examinations revealed multiple conditions and ultimately avian leukosis.
- Samples were tested at a state diagnostic laboratory; expert testimony indicated leukosis is commonly transmitted through the egg and was not practically detectable in newly hatched chicks at the time, nor preventable by medication.
- The disease killed many birds and rendered the flock commercially worthless, leading to destruction of remaining chickens.

## Issues

1. Whether a seller breaches the implied warranty of merchantability when goods contain a latent defect at delivery that was scientifically undiscoverable at the time of sale.
2. Whether a seller breaches the implied warranty of fitness for a particular purpose under the same circumstances, where the buyer relied on the seller to supply suitable chicks for commercial production.
3. Whether the evidence and jury instructions were sufficient to support a finding that the chicks were infected at delivery and that implied warranties were breached.

## Decision

- The Third Circuit affirmed a jury verdict for Vlases awarding $23,028.77 for breach of implied warranties after the negligence claim was withdrawn.
- The court held Montgomery Ward liable for breach of the implied warranties of merchantability and fitness for a particular purpose.
- The court rejected the argument that warranty liability is avoided because the defect was undiscoverable and not preventable with then-available science.
- The court found sufficient evidence supporting the jury’s determination that leukosis was present at the time of delivery and that the flock was not fit for ordinary or intended commercial purposes.
- The court upheld the trial court’s jury instructions as a correct statement of Pennsylvania warranty law.

## Legal Principles

- Under the U.C.C., implied warranty liability is not fault-based; the seller’s lack of knowledge, negligence, or ability to discover a defect does not negate breach if the goods fail to conform at delivery.
- Goods are not merchantable if they are not fit for the ordinary purposes for which such goods are used, even when the defect is latent and not practically detectable at the time of sale.
- An implied warranty of fitness for a particular purpose arises when the seller has reason to know the buyer’s particular purpose and reliance on the seller’s skill or judgment; breach turns on nonconformity at tender, not seller culpability.
- Whether a latent defect existed at delivery is a fact question for the jury; circumstantial evidence (timing, pattern of illness, husbandry conditions, and expert testimony) can support that finding.

## Conclusion

The court affirmed warranty liability for diseased chicks because the flock was infected at delivery and therefore unmerchantable and unfit, and the seller’s inability to detect or prevent the disease did not shift the loss to the buyer under implied warranty principles.


Vlases v. Montgomery Ward & Co., 377 F.2d 846 (3d Cir. 1967)