explaining that “tort principles are better suited to resolve claims for personal injuries or damage to other property[,] ... [cjontract principles more *310 readily respond to claims for economic loss caused by damage to the product itself’ (citations omitted)
How later courts described this case
- explaining that “tort principles are better suited to resolve claims for personal injuries or damage to other property[,] ... [cjontract principles more *310 readily respond to claims for economic loss caused by damage to the product itself’ (citations omitted)
- explaining that "in this case we do not resolve the issue whether tort or contract law applies to a product that poses a risk of causing personal injuries or property damage but has caused only economic loss to the product itself”
- holding that statute of limitations for breach of express warranty is four years
- applying state law, not maritime law, but adopting East River’s holding in instances when a product injures only itself, concluding that East River precludes tort recovery even in consumer transactions, but finding that the law of that state generally allows plaintiffs to recover economic loss under warranty theories without privity restrictions
Written by the judges who cited it.
The opinion
HANDLER, J.,
concurring.
In this case, the Court holds that a consumer, who has purchased a product, cannot rely on a common-law cause of action sounding in strict-products liability and negligence to recover damages solely for the economic loss resulting from a defect that *644 destroys the worth of the product. Instead, the majority determines that the consumer’s exclusive remedy consists of the express warranties contained in the Uniform Commercial Code (“U.C.C.”). I am not troubled with that disposition because I am convinced that in a case such as this, the consumer is not at a genuine commercial disadvantage and is the kind of consumer who falls within the ambit of the U.C.C. The consumer here is a purchaser of an expensive luxury boat whose bargaining power is substantially equivalent to that of the seller. Furthermore, because the majority has not foreclosed tort recovery for purely economic loss in instances where the parties may be economic captives with unequal bargaining power, I am able to join in the result. See Ante at 638-639, 695 A.2d at 272-273 (“[W]e do not reach the issue of the preclusion of a strict-liability claim when the parties of unequal bargaining power, the product is a necessity, no alternative source for the product is readily available, and the purchaser cannot reasonably insure against consequential damages.”).
In Spring Motors Distributors v. Ford Motor Co., 98 N.J. 555, 596-97 , 489 A.2d 660 (1985) (Handler, J., concurring), I expressed the view that the U.C.C. did not foreclose a tort remedy for economic loss incurred by a non-commercial consumer. That category of consumer, as I viewed it, encompassed a class of purchasers who frequently would not have equal bargaining power. I believed that comparative bargaining power was the most critical factor in determining whether the U.C.C. was the exclusive remedy and that the U.C.C. did not bar other avenues of relief to consumers with substantial bargaining disadvantages. Under the U.C.C., recovery is restricted to limited claimants who meet the stringent requirements of the U.C.C. warranty provisions. Moreover, warranty disclaimers often bar recovery altogether. 1 Such a *645 result is acceptable only where the parties to the contract have equivalent bargaining power and meaningful alternatives. See Williams v. Walker-Thomas Furniture Co., 350 F.2d 445, 449 (D.C.Cir.1965) (“[W]hen a party of little bargaining power, and hence little real choice, signs a commercially unreasonable contract with little or no knowledge of its terms, it is hardly likely that his consent ... was ever given to all the terms.”)
Comparative bargaining power cannot be determined merely by labeling a consumer either “commercial” or “non-commercial.” As the facts of this case reveal, some non-commercial purchasers will enjoy equal bargaining power. Similarly, some commercial purchasers in no sense enjoy equal bargaining power or the opportunity to secure adequate protections in the bargaining process. See Spring Motors, supra, 98 N.J. at 592 , 489 A.2d 660 (Handler, J., concurring) (“It would not be correct to consider the U.C.C. remedy to be exclusively applicable to a purchaser’s claim simply because the transaction can be viewed as ‘commercial’ ... or because the ultimate purchaser is in business____ [T]he ultimate purchaser of a vehicle could be a travelling salesperson or a small-scale trucker, or a carpenter, plumber, electrician, or landscape gardener.”) Whether the U.C.C. should be the exclusive remedy for economic loss in a particular case can be determined only by consideration of all the circumstances surrounding the transaction. In many cases, a gross inequality of bargaining power will supplant the exclusivity of the U.C.C. remedy.
In sum, I am confident that the Court’s decision does not preclude tort remedies for economic loss in such circumstances. I thus concur in its judgment.
Justice STEIN joins in this opinion.
*646 HANDLER and STEIN, JJ., concur in result.
For reversal and reinstatement — Chief Justice PORITZ, and Justices HANDLER, POLLOCK, O’HERN, GARIBALDI, STEIN and COLEMAN — 7.
For affirmance — None.
The majority is satisfied with the limited U.C.C. remedy because “[ajlthough a manufacturer may be in a better position to absorb the risk of loss from physical injury or property damage, a purchaser may be better situated to absorb the ‘risk of economic loss caused by the purchase of a defective product.' " Ante *645 at 628, 695 A.2d at 268 (citations omitted). That is not always the case. One can imagine myriad instances where the purchaser of an expensive necessity, such as a refrigerator or an oven, could be devastated by the product's defectiveness.