District Court Evaluates Express Warranty of "Airworthiness": Texas Court Determines That "Airworthy" Is an Unambiguous Term That Controls Over More General Disclaimers of Warranties

By Marc L. Antonecchia 
 
HIGHLIGHTS:
The "as is" clause does not negate the express warranty of an "airworthy" aircraft.
The terms "airworthy" and "certificate of airworthiness" are technical terms capable of only one reasonable interpretation – compliance with FAA's technical and legal requirements.

In Luig v. North Bay Enterprises, Inc., a Texas District Court recently considered a seller's obligation to deliver an "airworthy" aircraft in the context of an aircraft purchase agreement that also contained an "as is" clause.   The contract involved the sale of a 50-year-old Bell helicopter that had undergone several changes, including the removal of the turbocharger engine. After the buyer conducted a pre-purchase inspection and indicated several items to be repaired, the seller delivered the aircraft to the buyer with the requested repairs completed.

Subsequent to delivery, the seller commenced suit seeking a declaratory judgment that it delivered the aircraft in accordance with the contract. The buyer asserted a counterclaim seeking damages for breach of contract on the basis that the aircraft failed to meet the contractual delivery condition because it was not "airworthy." Following discovery, the parties cross-moved for summary judgment. The cross-motions required analysis of two material contract terms.

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Luig v. North Bay Enterprises, Inc. - Document 41
Court Description: MEMORANDUM OPINION AND ORDER: Having considered the Defendant's Motion for Summary Judgment (ECF No. 27), related briefing, record, and applicable law, the Court finds that Defendant's Motion for Summary Judgment should be and is hereby DENIED. The Court further finds that Plaintiff's request for a declaration of the parties' rights and obligations under their contract is hereby GRANTED in part. All issues presented by the parties pleadings having been resolved, the Court will issue a Final Judgment. (Ordered by Judge Reed C O'Connor on 10/27/2014) (plp)

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