In several recent editions (Fourth Quarter 2011, Third Quarter 2011, and First Quarter 2011), we have discussed various courts’ treatments of claims for breaches of implied warranties under the UCC. We revisit this topic here, in light of a well-reasoned Kansas Appellate Court decision that highlights the distinctions between two implied UCC warranties—the warranty of merchantability and the warranty of fitness for a particular purpose—in a rather unusual fact pattern.

Brenda Golden wanted a “super white” smile. In response to a magazine advertisement, Golden contacted Den-Mat, a manufacturer of porcelain veneers for her teeth. Veneers are synthetic panels affixed over the front of a person’s teeth to cover discolorations or other imperfections in the teeth. Den-Mat sent Golden a brochure, in which it advertised the veneers would last up to 16 years with no discoloration and 100% retention. Den-Mat also recommended a dentist in Golden’s area to apply the veneers—one Dr. Carissa Gill.

At a consultation with Dr. Gill, Golden expressed her desire for “really white” teeth, and indicated that she wanted the whitest veneers that Den-Mat produced. Although Dr. Gill opined that the whitest veneers may appear artificial, Golden was not to be dissuaded. Dr. Gill ordered, took delivery, and received payment for Golden’s selected veneers. Two months later, Dr. Gill applied Golden’s chosen veneers to the top row of her teeth.

By three weeks later, one veneer had cracked and another had come loose. Dr. Gill replaced the veneers and reapplied them at no additional cost to Golden. Six months later, another veneer came off, and once again Dr. Gill replaced it at no additional cost. Less than a year later, yet another veneer came off, and although Dr. Gill replaced it, Golden complained that it appeared significantly whiter than the older veneers. A Den-Mat representative indicated that it was possible that the older veneers had become stained or darkened over time. When Golden subsequently complained that the veneers had developed a “grey cast” since they were first installed, Den-Mat refused to replace the veneers.

Golden filed suit in a Kansas trial court against Den-Mat and Dr. Gill, alleging (among other things) claims of breach of the implied warranties of merchantability and fitness for a particular purpose under Kansas’s statutory version of Article 2 of the UCC . The trial court granted summary judgment in favor of the defendants, albeit in what the appellate court described as a “short letter ruling . . . without citing supporting statutes or caselaw.” Golden appealed, and the Kansas Appellate Court overturned the lower court’s decision, finding that there were factual issues surrounding Golden’s implied warranty claims that should have been resolved by a jury.

Prior to examining the merits of Golden’s implied warranty claim, the court was tasked with determining, as a threshold matter, whether the UCC was even applicable to these claims. Article 2 of the UCC applies to the sale of goods, but Golden’s transaction with Dr. Gill involved both a purchase of goods (the veneers) and the purchase of a service (Dr. Gill’s application of the veneers). In determining whether such a “mixed transaction” is governed by the UCC or by general contract law, the majority of states (including Kansas) follow the “predominant purpose test.” This test holds that if the predominant purpose of the entire transaction is a sale of goods, then Article 2 of the UCC applies to the entire transaction. (A few states, when confronted with mixed transaction, will apply Article 2 only to the goods part of the transaction and general contract law to the service part.) The court noted that the outcome of the predominant purpose test depends heavily upon the particular facts and circumstance of each transaction.

In examining the facts and circumstances surrounding Golden’s case, the court highlighted the fact that the veneers were goods and were integral to the transaction between Golden and Dr. Gill. Moreover, Den-Mat recommended Dr. Gill to install the veneers, and a jury could reasonably find that the predominant purpose of the transaction was the sale of the veneers, with Dr. Gill’s services merely ancillary to Golden’s purchase of the veneers. The court noted that this particular transaction involved cosmetic services, and therefore materially differed from a dentist providing medical treatment, such as the filling of a cavity. Although the filling itself is a good, such a transaction would not likely fall within the scope of Article 2 because the predominant purpose would involve a service—treatment for a malady. Here, on the other hand, Golden suffered from no such ailment and sought no professional diagnosis or treatment. Golden simply wanted whiter teeth and new veneers.

Having found that whether the UCC applied was a question for a jury, the court was still obligated to consider whether Golden could succeed on her claims for breach of implied warranties against Dr. Gill. Golden alleged that Dr. Gill breached both the implied warranty of merchantability and the implied warranty of fitness for a particular purpose.

An implied warranty of merchantability is an unwritten and unspoken guarantee that the goods sold by a merchant satisfy basic standards of quality, durability or acceptability. For example, a television retailer provides an implied guarantee that the television is able to convert an electronic signal into a picture and sound. An implied warranty of merchantability does not ensure that the goods be of the finest quality, but simply that they are fit for their ordinary purposes. The television in our example, therefore, need not provide the highest quality image resolution or the clearest sound available on the market. A court considers whether goods satisfy such basic standards of quality and durability from the perspective of an objective reasonable consumer.

In Golden’s case, the court held that whether Dr. Gill breached the implied warranty of merchantability was a question ripe for a jury. In other words, it was beyond the province of the lower court to determine whether the veneers failed to satisfy their fundamental purpose. First, the court observed that Dr. Gill could be considered a merchant because as a dentist, and more particularly as a dentist recommended by Den-Mat, she was likely knowledgeable about the characteristics of the veneers. Second, the court determined that the ordinary purposes of the veneers was for long-term cosmetic enhancement. Accordingly, the stains, discoloration, and cracks in the goods suggest that they may not have met their ordinary purpose. In so holding, the court emphasized that a jury must be instructed to make such a determination not from Golden’s subjective beliefs, but based on reasonable consumer expectations.

The court also overturned the lower court’s ruling in favor of the defendants with respect to Golden’s claim for breach of the implied warranty of fitness for a particular purpose. An implied warranty of fitness for a particular purpose exists when a seller has reason to know that a purchaser of goods intends to use the goods for a particular purpose. Additionally, for this warranty to attach to a transaction, the seller must have knowledge and expertise regarding the goods and the buyer must actually rely on this knowledge and expertise. Unlike the implied warranty of merchantability, the implied warranty of fitness for a particular purpose does not involve the general characteristics of the good at issue; rather, it involves the fitness of those goods for the buyer’s intended and expressed purpose. For example, assume that our hypothetical television purchaser above informs the seller that she is searching for a television capable of providing high-definition picture. If the seller recommends and sells a television that is only capable of providing standard definition video, the seller may be liable for a breach of the implied warranty of fitness for a particular purpose.

Golden alleged that she informed Dr. Gill that she wanted exceptionally white teeth. As such, the court determined that a jury could reasonably find that Dr. Gill was aware that Golden had a particular purpose beyond a mere cosmetic enhancement to her teeth—she wanted “strikingly white teeth.” Golden made clear a specific need that she sought to fill with the veneers, and Dr. Gill’s acknowledgement that the porcelain veneers would not discolor or stain could therefore give rise to a claim for breach of the implied warranty of fitness for a particular purpose. Golden’s claim was therefore improperly withheld from a jury. In so holding, the court underscored that a buyer need not emphasize the particular purpose for which she is purchasing the goods, but rather that it is enough that the seller should “reasonably understand” the buyer’s intended purpose.

Although claims asserting violations of either implied warranty may involve some overlapping facts, the warranties materially differ in certain ways. First, the implied warranty of merchantability requires that the seller be a merchant, i.e., someone who regularly deals in goods of the kind at issue or otherwise holds herself out by occupation as having particular knowledge or skill of the goods. The implied warranty of fitness for a particular purpose may be imputed to a transaction between any seller and purchaser. Second, in claims for a breach of the implied warranty of merchantability, a seller’s reliance on a merchant’s expertise or judgment is presumed, whereas in claims for a breach of the implied warranty of fitness for a particular purpose, the plaintiff must demonstrate actual reliance on the seller’s judgment to furnish suitable goods. Finally, a key distinction lies in the buyer’s intended use of the goods. The implied warranty of merchantability only provides a guaranty that the buyer may use the goods as they are fundamentally and objectively intended to be used. The implied warranty of fitness for a particular purpose, on the other hand, warrants that the goods will be satisfactory for the buyer’s expressed, particular intended use.

As a final note, the court observed that claims for breaches of these implied warranties are not mutually exclusive—a seller may be liable for breaches of both warranties for a single transaction, although the buyer may not recover duplicative damages. Golden’s implied warranty claims were both allowed to proceed to a jury, as the warranty of merchantability related to the durability and color constancy characteristics of the veneers, whereas the warranty of fitness for a particular purpose related only to the ability of the veneers to retain their brilliant white luster.

As of the date of publication, Golden’s claims remain pending in the Sedgwick County District Court.