Cengage Advantage Books: Law for Business 18th Edition by John Ashcroft ,Janet Ashcroft

Exercise 3

Rodney Hale, who did business as RH Equipment, told Brad Lawson that he did not really know much about a tractor he had for sale except that it leaked oil and fuel. Lawson decided to buy the tractor and gave Hale $500 on the $8,500 purchase price. When Lawson returned to pay the remainder and pick up the tractor, he again asked Hale whether there was anything wrong with the tractor. Hale said it leaked oil and fuel. Lawson was given an invoice that said, "AS IS." Lawson signed the invoice and returned it to Hale. He drove the tractor to another implement dealer and found that oil was running out underneath the engine. The engine was cracked and had been welded. A few months before, someone else had purchased the tractor from Hale and after discovering the cracked engine had returned it when Hale said he could not satisfactorily fix it. Lawson sued, alleging that Hale had violated the warranty of merchantability. Had he? [Lawson v. Hale, 902 N.E.2d 267 (Ind. Ct. App.)]