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State v. United States Steel Corp.6/24/1996
649 (Okla. 1990). Explaining why economic damages should not be recoverable in a products liability action, the Waggoner court first delineated the distinction between the type of damage sought to be remedied by products liability and the type of damage sought to be remedied by the UCC:
A product can cause personal injury , property damage, and economic loss. Recovery, under the doctrine of manufacturers' products liability, is allowed for personal injury, . . . and damage to property other than damage to the product itself. . . . This Court has yet to address the question of whether manufacturers' products liability applies to purely economic damages resulting from product deterioration. The question is one of the proper relationship between the Uniform Commercial Code (UCC) and manufacturers' products liability.
An action in manufacturers' products liability is primarily tortious in nature. Its rationale is founded upon public interest in human safety. . . . This liability is independent of UCC warranty provisions because recovery under manufacturers' products liability arises from a duty to the public rather than from a contractual relationship. Thus, the parties to a sales contract may not limit a manufacturer's liability for personal injury caused by a product defect.
Recovery under warranty provisions, however, applies to losses flowing from the sales contract. Comment 4 to section 2-313 of the UCC notes that "the whole purpose of the law of warranty is to determine what it is that the seller has in essence agreed to sell." Section 2-314 provides that "unless excluded or modified (Section 2-316), a warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind." . . .
As to damages recoverable in a warranty action, section 2-714 of the UCC provides in part:
(2) The measure of damages for breach of warranty is the difference at the time and place of acceptance between the value of the goods accepted and the value they would have had if they had been as warranted, unless special circumstances show proximate damages of a different amount.
(3) In a proper case any incidental and consequential damages under the next section may also be recovered.
Consequential damages are defined is section 2-715(2)(b) to include "injury to person or property resulting from any breach of warranty."
Id. at 652 (citations, internal quotation marks, and footnotes omitted) .
Analyzing why, in the case of damage only to the product itself, remedies in products liability and contract should not overlap, the Waggoner court stated:
As to personal injury or injury to other property, manufacturers' products liability and the UCC warranty provisions provide parallel remedies. But as to damage only to the product itself, the two remedies dramatically diverge.
This Court has long held that manufacturers' products liability should be distinguished from contractual liability. "While the UCC does envision allowing recovery for personal injury and for property damage arising out of defectively manufactured articles, such recovery arises out of contractual relationships, express or implied. . . ." This contractual relationship, the sales contract, is also the basis for the recovery of a buyer's economic losses.
In contrast, "the economic expectations of parties have not traditionally been protected by the law concerning unintentional torts." These expectations have been safeguarded by commercial law principles. Therefore, economic damages are more logically related to the UCC than to manufacturers' produ
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