Schroeder v. Fageol Motors

Schroeder (plaintiff) bought a used truck from Fageol (defendant) for his business, still covered by the original owner's-book warranty, but Fageol never reviewed the owner book or explained the warranty terms and its normal-sized-print exclusionary clause barring consequential damages to Schroeder. The truck's engine exploded months later and never worked properly afterward despite repeated repair attempts by Fageol and Cummins Engine (defendant). Schroeder sued for breach of warranty; the trial court, relying on Berg v. Stromme's requirement that warranty disclaimers be negotiated and conspicuously particularized, held the exclusionary clause did not protect Fageol from consequential damages, and the court of appeals affirmed.