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Friday, September 26, 2008

NY Appellate Court: End User Has No Case Against Manufacturer

Cash_registerHere's the summary of a recent case out of New York's Second Department involving claims by an end user (grocery store operator) against the manufacturer of cash register software:

On this appeal, we are asked to consider whether a dissatisfied end user of a computer system may maintain a cause of action against the system's manufacturer sounding in breach of contract where the end user did not purchase the system from the manufacturer, but from an authorized dealer. We also consider whether, in the absence of privity between the end user and the manufacturer, the end user may nonetheless maintain a cause of action against the manufacturer to recover damages for breach of implied warranties, or breach of express warranties contained in the manufacturer's brochure, a written price quote, an on-line digital licensing agreement, and a seller's distribution agreement. We hold that, in the absence of privity, the end user has no cause of action against the manufacturer sounding in breach of contract or breach of implied warranty. We conclude, however, that the end user has a cause of action against the manufacturer to recover damages for breach of express warranties contained in the brochure, the price quote, and the seller's distribution agreement. Since the end user here did not personally accept, agree to, or rely upon the terms of the on-line digital licensing agreement, she has no cause of action against the manufacturer to recover damages for breach of the express warranties contained therein. For the same reason, the manufacturer may not invoke the provisions of the digital licensing agreement to limit or restrict the express warranties contained in the brochure, the price quote, or the seller's distribution agreement.

Jesmer v. Retail Magic, Inc., __ A.D.3d ___ (2d Dep't Sept. 9, 2008).

[Meredith R. Miller]

http://lawprofessors.typepad.com/contractsprof_blog/2008/09/ny-appellate-co.html

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