My __________ is broken! Now what?
No doubt you've been there. We all have. Your (insert piece of equipment necessary to maintain your operation here) is broken. All production in the brewery comes to a halt. Kegs can't be filled. Cans can't be distributed. (That brief can't be filed.) Customers are getting thirsty and you can't meet the demand. How can you preserve a potential claim while getting things back in order? We offer a few tips for your consideration during this time of frustration:
- After making contact with the vendor or manufacturer of the equipment, dig out your warranty and sales documents. There may be language on the sales documents which describes the mechanism of making a claim. If so, follow it because it is part of the contract you have with the vendor. If you don't follow the procedure, the vendor may have a valid defense.
- Read the limiting language on the warranty, if any. Some sales documents disclaim implied warranties. Even though these documents may contain disclaimers, limitations on implied warranties have to follow certain "rules" to be valid. Ohio law (and the law of most states adopting some form of the Uniform Commercial Code) is "designed principally to deal with those frequent clauses in sales contracts which seek to exclude "all warranties, express or implied." It seeks to protect a buyer from unexpected and unbargained language of disclaimer by denying effect to such language when inconsistent with language of express warranty and permitting the exclusion of implied warranties only by conspicuous language or other circumstances which protect the buyer from surprise." (Official Comment to Ohio R.C. 1302.29)
- Consequential damages to a breach of warranty may be available but not in all cases. It depends upon the language in the warranty and whether express/direct warranties were made. If the seller tells you "This canning line will last you for 3 years," that is an express warranty. In this situation, you may be permitted to recover consequential losses despite the conflicting warranty limitation in the contract.
- Document, invite, preserve. If you anticipate you may need to make a claim, but you have to move forward, you must document in writing (email is OK) all of your dealings with the vendor and others you deal with to remedy the problem. You are probably required to give the vendor a reasonable shot at fixing it, and most will try very hard. It's best to document all of these communications and keep a file. Photos or videos documenting the issue are a must. If you have to move on, before doing so, invite the vendor to inspect by a date certain. If they fail to appear to inspect and document the issue, you can probably move forward with a remedy. If you don't invite the vendor to inspect, or don't give them a reasonable opportunity to do so, you will jeopardize your claim and the vendor can claim what lawyers call "spoliation." Essentially, you destroy the vendor's ability to defend itself, and courts will most likely hold that against you.
- Calculate all of your losses and document as well with receipts or invoices. Once you've remedied the problem, prepare a demand package in a timely manner to the vendor if you want to be compensated. Letting it linger will harm your claim. Memories fade. Witnesses move. People lose interest. It's best to make the claim while its still fresh.
- As always, if you are hitting a wall with the other side, call your friendly neighborhood brewery/distillery lawyer!
Cheers and be careful out there!
Kevin