Case Study

Case Study

TRANSAMERICA OIL CORPORATION, Plaintiff-Appellee, v. LYNES, INC. and Baker International Corporation, Defendants-Appellants

No. 81-1505

UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT

723 F.2d 758; 1983 U.S. App. LEXIS 14288; 37 U.C.C. Rep. Serv. (Callaghan) 1076

December 21, 1983

by

Timothy Troyer

PROC 5810

June 15, 2010

Procedural History:

Transamerica, who conducts oil and gas drilling, approached Lynes about their advertisement regarding an injection packer and subsequently purchased several of them only later to determine that they did not perform properly. The plaintiff, Transamerica, took the defendant, Lynes INC, to court for monetary damages arguing that Lynes executed a breach of the express warranty and liability regarding their product. Consequently, the United States District Court for the District of Kansas awarded damages to Transamerica resulting in an appeal from Lynes. Lynes refuted the claim citing the state of Kansas’ statute of limitations concerning product liability and that the plaintiff expressly agreed to the limited liability of the product. The trial culminated in the jury awarding the plaintiff $196,577.62, much more than the purchase price of the packers.

Facts:

Brown, the President of Transamerica, displayed interest in using the packers as a permanent solution for well holes.

Defendants' advertisements stated that the production injection packer was designed for permanent use in open holes.

Under Kansas law, advertising may form a part of an express warranty

Brown spoke to a Lynes sales representative who then sent Brown additional advertisements and literature that articulated that the packer was suitable for use as a permanent completion device in open well holes..

Plaintiff purchased ten production injection packers in six shipments from defendants which at least five had invoices which included language on the reverse side disclaiming any express or implied warranties other than that the...