Lewis v. Sawyer

• Lewis Refrigeration Company = seller of a freezer = "Lewis" = plaintiff
• Sawyer Fruit, Vegetable and Cold Storage Company = "Sawyer" = defendant = buyer
• Lewis sold Sawyer a commercial freezer. The contract had a warranty.
• The contract excluded consequential damages.
• The 2 parties agreed for the contract to be governed by the contract law of the state of Washington.
• The freezer mal-functioned.
• Lewis provided no assistance.

Lewis sued Sawyer for the outstanding balance for the freezer.

A jury awarded Sawyer $25,000 in lost profits & over $27,000 related to Freon cost.

If an exclusive remedy would fail its essential purpose, should the exclusive remedy be enforced?

No. If an exclusive remedy would fail its essential purpose, the exclusive remedy shouldn't be enforced, & consequential damages should be awarded, unless they have been validly limited by merchant parties.

The jury's award for consequential damages may not stand.

A new trial isn't allowed.

Affirmed in party to allow incidental damages for Freon, but reverse consequential damages award

• (Lewis refused the rescind the contract for the mal-functioning freezer)
• + (Sawyer could've filed suit for rescission)
• = (The remedy didn't fail its essential purpose)

Judge Newblatt: Because the contract forbade consequential damages, the court should have only permitted consequential damages if that clause was un-conscionable.

• Rescission of the contract would have meant
  • returning the freezer to Lewis (seller) &
  • business loss for Sawyer>