Plaintiff appeals pursuant to G.S. 7A-30(2) from a decision of a divided panel of the Court of Appeals affirming the dismissal of his claim pursuant to G.S. 1A-1, Rule 12(b)(6) by Judge Herring on 14 March 1978 in Bladen Superior Court. The decision below is reported at
Exum, Justice. Justices Brock and Carlton did not participate in the consideration or decision of this case.
This is an action to recover damages allegedly incurred by plaintiff-purchaser as a result of defendant-manufacturer's breach of an express warranty of a tractor. The sole question presented is whether the absence of contractual privity between the parties in the sale of the tractor bars the claim. We hold that it does not.
Plaintiff alleges that in November, 1975, he purchased a new farm tractor and attachments from Sessions Farm Machinery, Inc., an authorized dealer of defendant-manufacturer. An owner's manual issued by defendant and delivered to plaintiff with the
new tractor expressly warranted to the new owner that each tractor sold by defendant's authorized dealers would be free from defects in material and workmanship.*fn1 Plaintiff alleges that the tractor began "breaking down" when put to farm use immediately after delivery; that various parts of the tractor were defective, inoperative, or missing; that the defective parts were duly returned to defendant's Tarboro factory for repairs or replacement; and that defendant failed or refused to repair or replace the parts. Plaintiff prays for $100,000 damages allegedly attributable to various economic losses occasioned by breach of the warranty. Defendant filed answer setting up various defenses including a so-called "disclaimer" contained in the warranty and incorporated in the complaint.*fn2 Simultaneously he moved to dismiss for failure of the complaint to state a claim upon which relief could be granted. The motion was grounded entirely upon the complaint's failure "to allege facts to establish privity of contract between the plaintiff and the defendant manufacturer." The trial court allowed the motion on this ground alone.*fn3 The Court of Appeals affirmed, Judge Parker dissenting. We reverse.
For the purposes of this appeal the parties have stipulated that "There was not privity of contract between the plaintiff and defendant." A majority of the Court of Appeals agreed with the trial court that the absence of privity barred the claim. Finding
the requirement of privity in warranty actions such as this one too well established in the decisions of this Court to be ignored or overruled, the Court of Appeals concluded that "our law requires that only a person in privity with the warrantor may recover on the warranty for mechanical devices." We disagree. We find reason and authority to support our holding that privity in the sale of goods is not necessary to a purchaser's action on an express warranty relating to the goods.
The oft-cited general principle of the privity requirement is given in Service Co. v. Sales Co., 261 N.C. 660, 668, 136 S.E.2d 56, 62 (1964), as follows:
"A warranty is an element in a contract of sale and, whether express or implied, is contractual in nature. Only a person in privity with the warrantor may recover on the warranty; the warranty extends only to the parties to the contract of sale. Murray v. Aircraft Corp., 259 N.C. 638, 131 S.E.2d 367; Prince v. Smith, 254 N.C. 768, 119 S.E.2d 923; Wyatt v. Equipment Co., 253 N.C. 355, 117 S.E.2d 21."
The apparent simplicity of this principle belies its difficult history.
Although warranty's more recent guise is contract, its heritage began in tort. Aggrieved purchasers of an earlier age were afforded relief through an action on the case in the nature of deceit, a forerunner of the modern tort of misrepresentation. Toward the latter part of the 18th Century pleading procedures wedded the action with that of assumpsit, producing the "curious hybrid" of warranty, "born of the illicit intercourse of tort and contract, unique in the law." Prosser, Handbook of the Law of Trots, p. 634 (4th Ed. 1971). See also Terry v. Bottling Co., 263 N.C. 1, 9, 138 S.E.2d 753, 758 (1964) (Sharp, J., later C.J., concurring); Ames, The History of Assumpsit, 2 Harv. L. Rev. 1 (1888). That a buyer of a defective product had a cause of action " quasi ex contractu," and could choose between a suit on a contract of warranty or a ...