Kearney & Trecker Corp. v. Master Engraving Co.
Supreme Court of New Jersey
527 A.2d 429 (1987)
Master Engraving Company (plaintiff) bought a complex, computer-controlled Milwaukee-Matic 180 machine tool from manufacturer Kearney & Trecker Corporation (defendant) for $167,000, under a contract that included both a repair-and-replacement warranty and a separate clause excluding consequential damages. The machine malfunctioned and never performed as warranted, and Master sued for breach, seeking lost profits as consequential damages. The trial court instructed the jury that Master could recover consequential damages if K&T failed to repair the machine as warranted, and the jury awarded Master $57,000, which the trial court affirmed.
Whether, when a contract contains both an exclusion of consequential damages and express limited contractual remedies, UCC § 2-719 requires invalidating the exclusion of consequential damages solely because the limited remedies failed of their essential purpose.