Business Law 9th Edition by Henry Cheeseman

Exercise 1

Implied Warranty of Merchantability
"Plaintiff introduced a Ford marketing manual that predicted many buyers would be attracted to the Bronco because utility vehicles were suitable to 'contemporary lifestyles' and were 'considered fashionable' in some suburban areas."
-Titone, Judge
Nancy Denny purchased a Bronco, a sport-utility vehicle (SUV) that was manufactured by Ford Motor Company. Denny testified that she purchased the Bronco for use on paved city and suburban streets and not for off-road use. When Denny was driving the vehicle on a paved road, she slammed on the brakes in an effort to avoid a deer that had walked directly into her SUV's path. The Bronco rolled over, and Denny was severely injured. Denny sued Ford Motor Company to recover damages for breach of the implied warranty of merchantability.
Denny alleged that the Bronco presented a significantly higher risk of occurrence of rollover accidents than did ordinary passenger vehicles. Denny introduced evidence at trial that showed the Bronco had a low stability index because of its high center of gravity, narrow tracks, shorter wheelbase, and the design of its suspension system.
Ford countered that the Bronco was intended as an off-road vehicle and was not designed to be used as a conventional passenger automobile on paved streets. However, the plaintiff introduced a Ford marketing manual that predicted that many buyers would be attracted to the Bronco because utility vehicles were suitable to "contemporary lifestyles" and were "considered fashionable" in some suburban areas. According to this manual, the sales presentation of the Bronco should take into account the vehicle's "suitability for commuting and for suburban and city driving."
The trial court found that Ford had violated the implied warranty of merchantability and awarded Denny $1.2 million. The court of appeals upheld this verdict. Denny v. Fore Motor Company , 87 N.Y.2d 248, 662 N.E.2d 730, 639 N.Y.S.2d 250, 1995 N.Y Lexis 4445 (Court of Appeals of New York)
Why does the law recognize implied warranties? What public purpose is served by doing so? Did Ford act ethically in asserting the "off-road vehicle" defense?