Sales and Leases - A Problem-based Approach, 2016a

If contractual privity is not necessary to maintain an action for breach of an
implied warranty of fitness [UCC § 2-315], how is it possible for a remote seller
to have reason to know any particular purpose for which its goods are required by
an unknown ultimate buyer? What is the time of contracting under [UCC § 2-315]
between a remote manufacturer and an ultimate purchaser? How does a buyer rely
upon the skill or judgment of a seller it has never met or had any dealing with and
maybe doesn't even know the existence of? The problems do not end with [UCC
§ 2-315], they only begin. For example, how is a remote manufacturer to afford
itself of the ability to exclude or modify warranties under [UCC § 2-316], when
the remote manufacturer does not know to whom it must exclude or modify its
warranties? In turn, how is an ultimate purchaser, pursuant to [UCC § 2-
607(3)(a)], to give notice of defect to a remote manufacturer whom it does not
know? Further, how is [UCC § 2-719] authorizing contractual modification or
limitation of remedy to operate between parties who have not dealt directly with
each other? Specifically, how is a remote manufacturer to avail itself of [UCC
§ 2-719(3)] which permits limitation or exclusion of consequential damage
liability? An across-the-board extension of implied warranties to non-privity
manufacturers or sellers, without regard to the nature of either the involved
product or the type of damage sought, would spawn numerous problems in the
operation of Article 2 of the Uniform Commercial Code.
4. Some courts allow breach of implied warranty claims to be pursued against
manufacturers or other remote sellers regardless of the type of injury involved. The
reasoning behind this approach is explained by the court in Israel Phoenix Assurance Co.
v. SMS Sutton, Inc., 787 F. Supp. 102, 103-04 (W.D. Pa. 1992), as follows:
Pennsylvania law on the issue of whether privity of contract is required in order to
state a claim for breach of warranty has developed over the years. Because breach
of warranty claims often parallel strict liability claims, and are used to recover the
same damages as strict products liability claims, the development of this area of
the law has reflected the development of strict products liability law. This
development came to a head, resulting in the abolition of a privity requirement in
breach of warranty claims asserted against manufacturers or suppliers by those
farther down the chain of distribution, in 1968 in Kassab v. Central Soya, 432 Pa.
217, 246 A.2d 848 (1968), overruled on other grounds, AM/PM Franchise Assoc.
v. Atlantic Richfield Co., 526 Pa. 110, 584 A.2d 915 (1990)[.]
Of course, the damages claimed in Kassab, were for damage to the plaintiffs'
cows, which constituted their personal property. Following Kassab, there
remained a question as to whether the Pennsylvania Supreme Court intended to
abolish the privity requirement only in cases involving personal injury or property
damage as opposed to economic loss. The question arose because of the Kassab
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