illegal and misleading provisions such as this one, it would be inappropriate to grant summary judgment on the basis of its existence without full inquiry concerning whether or not those protected by the statute involved were injured and if so what recompense was provided. See generally Note, Misrepresentation of Law, 32 Colum L Rev 1018 (1932); Kulkin, On the Knowing Inclusion of Unenforceable Contract and Lease Terms, 56 U Cinc L Rev No 3 at 845 (1988); see also Ryon v. John Wanamaker, 116 Misc. 91, 190 N.Y.S. 250 (Sup Ct 1921), aff'd 202 A.D. 848, 194 N.Y.S. 977 (1922), aff'd 235 N.Y. 545, 139 N.E. 728 (1923); Special Committee on Consumer Affairs, Consumer Products Warranty Fulfillment, NYLJ Nov 28, 1980 at 1..
The warranty of merchantability is a cornerstone of commercial law in dealings between merchants as well as with consumers, and hence cannot be disclaimed unless the disclaimer is both clear and conspicuous and agreed to by the customer. See Prosser, The Implied Warranty of Merchantable Quality, 27 Minn L Rev No 2 at 117 (1943). A disclaimer of warranty coverage is consequently ineffective to avoid the implied warranty of merchantability created by Uniform Commercial Code 2-314 unless the disclaimer specifically mentions "merchantability." Uniform Commercial Code 2-136(2). Seiscor's disclaimer did not do so. See Zicari v. Joseph Harris Co, 33 A.D.2d 17, 304 N.Y.S.2d 918, 924 (4th Dept 1969).
The warranty at issue states that "SPECIFICALLY EXCLUDED" are "any consequential damage resulting directly or indirectly from the use of the products." This would appear to embrace, for example, damages caused by a telephone call placed but received by an unintended party. Consequential damages resulting from inability to use or sell the product are not mentioned, but defendants appear to construe the warranty as excluding them despite this.
An interpretation limiting a warranty contrary to the plain meaning of the text, thus unduly favoring the position of a sophisticated party preparing a standard form document, would be inappropriate. See generally Rau v. Cavenaugh, 500 F. Supp. 204 (DSC 1980); N.Y. Gen. Obligations Law § 5-702; Practising Law Institute, Drafting Documents in Plain Language (1981); see also Rakoff, Contracts of Adhesion, 96 Harv L Rev 1173 (1983).
Defendants claim accord and satisfaction with respect to a "Product Improvement Agreement" signed by plaintiff Trident Technologies, Inc. and Seiscor, embracing repair or replacement of existing components with improved reliability. The information before the court is insufficient to determine with reliability whether or not that agreement was intended to replace other obligations and whether or not it was breached and hence claims under it or preceding agreements may be pursued.
Given the rulings made in this memorandum order, the parties may wish to revisit the option of settlement of these cases prior to incurring further legal expense. If direct negotiations are unsuccessful, resort to the mediation services of the court or assistance in developing other means of settlement may be requested.
Dated: White Plains, New York
April 26, 1994
/s/ Gerard L. Goettel, USDJ in the absence of
VINCENT L. BRODERICK, U.S.D.J.