Tuesday, December 3, 2013

Royal Business Machines, Inc. v. Lorraine Corp. case brief

Royal Business Machines, Inc. v. Lorraine Corp. case brief summary
633 F.2d 34 (1980)

Appellant seller challenged the order of the United States District Court for the Southern District of Indiana, which entered judgment in favor of appellee buyer in the buyer's action claiming breach of express and implied warranties and fraud.

The case arose from commercial transactions over a period of 18 months between appellant seller and appellee buyer in which buyer purchased paper copying machines from seller. The buyer filed suit claiming breach of warranties and fraud, and the seller filed his own action to enforce the financing agreements. The seller appealed the district court's order entering judgment for the buyer, including the award of punitive damages and attorney fees, and the court reversed.


  • The court held that most of the seller's statements did not create express warranties and were mere statements of opinion or puffery. 
  • As to the seller's representations that did qualify as express warranties, the court found that the district court failed to make the further finding that they became a part of the basis of the bargain. 
  • The court ruled that the findings of fraud and implied warranties were not supported by substantial evidence, and the district court erred in determining that the buyer made a timely revocation of acceptance of some of the merchandise. 
  • As the court reversed the judgment for the buyer, it negated the award of damages and attorney fees.

The court reversed the judgment for the buyer in his action against the seller for breach of warranties and fraud.

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