Sellers in Auction Sale Cannot Disclaim Core Description of the Product Offered for Sale

In La Trace v. Webster, 17 So. 3d 1210 (Ala. Civ. App. 2008), the Alabama Court of Civil Appeals stated that the core description of a product offered for auction sale creates an express warranty provision.  The products must therefore conform to the core description.  

The Court of Appeals referred to the federal district court’s findings in Balog v. Center Art Gallery-Hawaii, Inc., 745 F. Supp. 1556, 1563-64 (D. Haw. 1990). Id. at 1218. In Balog, the court held that a seller's statement that a piece of artwork was produced by Salvador Dali was a "core description" that was "nondisclaimable" under the UCC. Id. The Balog court explained: 

"'The foundation of every express warranty provision is the core description. See U.C.C. § 2-313, Comments 1 and 4. 'A 1990 Toyota,' 'a pair of shoes,' or 'a Monet' are all examples of core descriptions. The core description, at base, provides a reference point for the level of performance to which the seller's performance must conform. And, because it is assumed under the Code that the object of every sale regulated by the Code is describable, the core description is nondisclaimable by a seller, being the basic foundation upon which every sales contract is made. Cf., Bill Spreen Toyota, Inc. v. Jenquin, 163 Ga. App. 855, 294 S.E.2d 533 (1982) (disclaimer of warranties ineffective to prevent action for fraud when car purchased was not a Toyota as expressly warranted, but was one-half of such a car welded to one-half of another unidentified vehicle).’" 

Id. at 1219. 

In La Trace, the Plaintiff purchaser, La Trace attended an auction and purchased a number of items from the defendants ("Defendants"). Plaintiff claimed that he was attracted by the auction company’s brochure. Id. at 1212. Five lamps that Plaintiff purchased were identified at the auction as "Tiffany" lamps and one lamp shade was also identified at the auction as a "Tiffany" product. Id. Later the Plaintiff came to know that the lamps were not authentic Tiffany products. Id. at 1212-13.  Consequently, the Plaintiff filed suit against Defendants alleging fraudulent suppression, fraudulent misrepresentation, breach of warranty, breach of contract, negligence, wantonness, and a violation of § 8-14-23, Ala. Code 1975. Id. at 1213. 

The auctioneers argued that all of the claims except § 8-14-23 claim were barred by various disclaimers, warnings, and provisions to which the purchaser had explicitly agreed. Id.  

The appellate court observed that the sales at auction and the creation and disclaimer of warranties in the sale of goods are governed by the UCC. Id. at 1216. See §§ 7-2-328, 7-2-313, and 7-2-316, Ala. Code 1975; Travis v. Washington Horse Breeders Ass'n, Inc., 111 Wash. 2d 396 (1988). In Travis, the Supreme Court of Washington held that a statement made at auction that a horse was "healthy and fit for racing and breeding purposes" was an express warranty that was not negated by disclaimers of warranty contained in the "Conditions of Sale" of the auction catalogue. Id. ( citing Travis at 404).  

The appellate court observed that Alabama courts have held that statements by a seller that are mere sales talk or "puffery" do not give rise to express warranties. Id. at 1217 See Gable v. Boles, 718 So. 2d 68 (Ala. Civ. App. 1998). The court pointed out examples of puffery statements and said that such statements include statements describing an item as "in good shape," Scoggin v. Listerhill Employees Credit Union, 658 So. 2d 376, 377 (Ala. 1995), or "in good condition," Pell City Wood, Inc. v. Forke Bros. Auctioneers, Inc., 474 So. 2d 694, 695 (Ala. 1985).  

However, the Court noted that, as provided in § 7-2-313, representations of fact do give rise to express warranties. Gable, 718 So. 2d at 70. The Alabama Civil Court of Appeals has held that a statement by a seller of a boat to the effect that the boat was "winterized" was a statement of fact. Id.  Similarly, this court has held that a statement by a seller of a trailer that the trailer was a 2000 model-year trailer was a statement of fact. Terrell v. R & A Mfg. Partners, Ltd., 835 So. 2d 216, 227 (Ala. Civ. App. 2002).

The appellate court further noted that, part of the Official Comment to § 7-2-313, appears to contradict the Defendants' argument:
“No specific intention to make a warranty is necessary if any of these factors is made part of the basis of the bargain. In actual practice affirmations of fact made by the seller about the goods during a bargain are regarded as part of the description of those goods; hence no particular reliance on such statements need be shown in order to weave them into the fabric of the agreement. Rather, any fact which is to take such affirmations, once made, out of the agreement requires clear affirmative proof. The issue normally is one of fact.

"4. In view of the principle that the whole purpose of the law of warranty is to determine what it is that the seller has in essence agreed to sell, the policy is adopted of those cases which refuse except in unusual circumstances to recognize a material deletion of the seller's obligation. Thus, a contract is normally a contract for a sale of something describable and described. A clause generally disclaiming 'all warranties, express or implied' cannot reduce the seller's obligation with respect to such description and therefore cannot be given literal effect under Section 7-2-316."

Id.

Therefore, in light of §§ 7-2-313 and 7-2-316, the appellate court concluded that Defendant’s allegations regarding the statements made at the auction are sufficient to support his claim that express warranties arose from the Websters' description of the lamps as Tiffany products. Id. 

Defendants in this case did not dispute that the description of the lamps as "Tiffany" products was an affirmation of fact or a "description of the goods." Id.   However, the Defendants claim that the description of the lamps as "Tiffany" products did not become part of the basis of the bargain because the plaintiff signed the conditions of auction before any potential express warranties could be made, effectively rendering such warranties inoperative. Id.  

The appellate court found that the foundation of every express warranty provision is the core description. Id. Defendants do not dispute that they characterized the lamps/lamp shades as “Tiffany” during auction.  Further, the product descriptions were not accompanied by any qualifying statements doubting the authenticity of the lamps. Id. at 1218. 

Therefore, the Court found that because it is assumed under the Code that the object of every sale regulated by the Code is describable, the core description is nondisclaimable by a seller, being the basic foundation upon which every sales contract is made. Id. at 1219.  The foundation of every express warranty provision is the core description. Id.