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Universal Drilling Co. v. Camay Drilling Co.

737 F.2d 869 (1984)

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Universal Drilling Co. v. Camay Drilling Co.

United States Court of Appeals for the Tenth Circuit
737 F.2d 869 (1984)

  • Written by Tammy Boggs, JD

Facts

Universal Drilling Co. (the buyer) (plaintiff) and Camay Drilling Co. (the seller) (defendant) were represented in contract negotiations by sophisticated, experienced businesspeople, highly knowledgeable in the areas of oil and gas exploration and oil drilling. With equal bargaining positions, the parties entered a $2.925 million sales contract for two used drilling rigs. The contract defined the property to be sold as (1) the Marthens Rig and (2) Rig 10. The contract contained a disclaimer clause, which stated that the assets were sold in an “as-is” condition, without any warranty of operability or fitness. Another contract provision stated that the written agreement represented the complete agreement of the parties. After delivery, the buyer complained that the two rigs did not conform to their description, e.g., lacked certain features or functions. An appraisal valued the rigs as received at over $3 million. The buyer sued the seller alleging breach of express warranty insofar as the goods received were not as described in the contract. Following the Uniform Commercial Code (UCC), the trial court ruled in favor of the seller. The buyer appealed, arguing that the seller could not disclaim an express warranty to provide goods that conformed to their description (express warranty by description).

Rule of Law

Issue

Holding and Reasoning (McKay, J.)

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