Bethlehem Steel Corp. v. Chicago Eastern Corp.
United States Court of Appeals for the Seventh Circuit
863 F.2d 508 (1988)
Chicago Eastern (defendant) ordered steel from Bethlehem Steel (plaintiff) but never paid, prompting Bethlehem to sue for breach of contract. Chicago Eastern counterclaimed that the steel breached the implied warranty of merchantability, presenting expert testimony that the steel's unusually high nitrogen content made it brittle, prone to cracking, and unsuitable specifically for use as wall sheets in grain-storage tanks — even though the steel otherwise met the contract's technical specifications. The trial court held this was not enough to prove a breach of merchantability and dismissed the counterclaim; Chicago Eastern appealed.
Whether proving a breach of the implied warranty of merchantability under the UCC requires evidence regarding the good's ordinary, general use rather than only its unsuitability for the buyer's specific intended use.