Wilson Trading Corporation v. David Ferguson, Ltd.

Wilson Trading Corporation (plaintiff) sold yarn to David Ferguson, Ltd. (defendant). The contract's paragraph two barred any claim about the yarn's quality or shade after it was knitted or processed, or more than ten days after receipt; paragraph four warranted only that the yarn was good and merchantable. Ferguson accepted delivery, knitted the yarn into sweaters, washed them, and only then discovered color variations that it said made the yarn unmerchantable. Ferguson refused to pay, and Wilson sued for the price, invoking paragraph two's time limit. Ferguson argued the limit was unreasonable because the defect could not be found until after processing. Lower courts granted summary judgment to Wilson; Ferguson appealed.

Whether, under the UCC, the general remedy provisions may apply when circumstances cause a limited remedy for breach of warranty to fail in its essential purpose.