Strand v. Librascope, Inc., 197 F. Supp. 743 (E.D. Mich. 1961) (full-text).
Factual Background Edit
Plaintiff ordered two hundred computer read/record heads of a specific design from the manufacturer, Librascope. For the type of computer that plaintiff was building, heads with a very low noise level were required. While Librascope's particular design produced a head which was very advanced in some respects, the noise level remained high. Assured by the defendant that the computer head was satisfactory in all respects, plaintiff commenced building the computer, as well as testing the new heads. When the heads continually recorded a high noise level, he assumed that the malfunction was in his equipment.
During the testing by plaintiff, defendant continued to modify its heads, and finally developed a model with a tolerable noise level. By this time, however, plaintiff had already received all two hundred of the older, unsatisfactory heads pursuant to his order. He asked the defendant if he could replace the heads with the newer model. While the defendant did not acknowledge that any of the original heads were defective, it did offer the plaintiff the newer model at a substantial reduction in price.
After further negotiations, the defendant claimed that there was no justification for plaintiffs demand and revoked its offer to sell plaintiff the new heads at reduced price. Plaintiff then brought suit for breach of warranties and fraud. The two main issues at trial were (1) whether the original two hundred heads were defective, and (2) ff there was fraud and deceit.
Trial Court Proceedings Edit
On the first issue, the defendant brought a computer into the courtroom to demonstrate the reliability of its original heads. The court did not rule on the admissibility of the demonstration, but did conclude that the demonstration was not a valid test of the heads. The reason for this decision was that the demonstration involved the use of defendant's own computer — a model far less complex than the one that plaintiff was building. The defendant's model used only three heads, while plaintiff’s required sixty. Expert testimony revealed that defendant's model would have to work continuously for many days to show that the heads would work satisfactorily in plaintiff’s model for even a few minutes.
The court concluded that the demonstration was insufficient evidence, and that an examination of the entire transaction between the parties demonstrated that the heads were defective in their design and construction, since they were not suitable for plaintiff’s intended use.
The court also found that while Strand had extensive knowledge of computers in general, the defendant had special expertise with regard to the special hardware that it supplied and, therefore, Strand was justified in relying on the representations made by the defendant concerning those computer components. As a result, the court found fraud, and judgment was entered for plaintiff.
- ↑ 197 F. Supp. at 752-53.