Opinion by: Phil Hardberger, Chief Justice
Concurring Opinion by: Paul W. Green, Justice
Dissenting Opinion by: Sarah B. Duncan, Justice (joined by Justice Karen Angelini)
Sitting: Phil Hardberger, Chief Justice
Tom Rickhoff, Justice
Alma L. López, Justice
Catherine Stone, Justice
Paul W. Green, Justice
Sarah B. Duncan, Justice
Karen Angelini, Justice
Delivered and Filed: March 31, 2000
The question is whether a consumer may contract away the implied warranties of habitability and good and workmanlike performance in the construction of a new home. The majority says such warranties cannot be waived or disclaimed, relying on Melody Home Mfg. Co. v. Barnes, 741 S.W.2d 349 (Tex. 1987). I must reluctantly concur.
The identical question was presented to the supreme court in G-W-L, Inc. v. Robichaux, 643 S.W.2d 392 (Tex. 1982). In that case, the court unanimously held that the implied warranty of fitness created by Humber v. Morton, 426 S.W.2d 554 (Tex. 1968) could be disclaimed by agreement. See Robichaux, 643 S.W.2d at 393. The court split, however, over the quality of language that must be used to create an effective waiver. The majority held the language must only be "clear and free from doubt." Id. The dissent argued that "the better rule is the waiver must be in clear and unequivocal language specifically naming the warranty that is being disclaimed." Id. at 394 (Spears, dissenting) (emphasis in original). In this case, the purchasers agreed to accept the homeowner's warranty "in lieu of all other warranties, whatsoever, whether expressed or implied by law, and including but not limited to the implied warranties of good workmanlike construction and habitability." (emphasis supplied). This language satisfies even the more rigorous test advocated by the dissent in Robichaux.
Five years after deciding Robichaux, the supreme court for the first time recognized an implied warranty for services related to the repair or modification of existing tangible goods or property. See Melody Home, 741 S.W.2d at 354. The court then went further and held that this implied warranty could not be waived. Id. at 355.(1) Moreover, and of particular importance in this case, the court suggested that Robichaux was inconsistent with its holding. Id. ("To the extent that it conflicts with this opinion, we overrule [Robichaux].").
Thus, on the basis of the rationale expressed in Melody Home, the majority disregards Robichaux and holds that the Humber implied warranty for new home construction may not be waived. Although I believe this is what the supreme court intended in Melody Home, I believe the court was wrong to extend the non-waiver holding to implied warranties in new homes. However, because I am bound to follow supreme court precedent, I must concur in the result.
* * *I write separately because I believe Melody Home should be reconsidered, at least with respect to its holding that new home implied warranties cannot be negotiated away by the parties. The reason given for the anti-waiver holding in Melody Home was the supreme court's concern that parties in unequal bargaining positions might be forced into accepting warranty disclaimers on a "take it or leave it" basis. See Melody Home, 741 S.W.2d at 355. That may be a legitimate concern where the service provider is in a superior bargaining position to the consumer. In Melody Home, for example, the consumer was essentially in a captive position-he purchased what was represented as a habitable mobile home and, when there were problems, he expected the manufacturer to repair the defects in a good and workmanlike manner. Although there was no disclaimer of warranty in that case, the supreme court nonetheless determined that any attempted disclaimer would have been unenforceable because the consumer, without any effective means to negotiate with the manufacturer, would have had little choice but to accept the terms of the repair service provided. Id.
But where the parties are in an equal bargaining position, there is no legitimate reason why the parties should not be allowed to freely negotiate the existence or the scope of the warranties of habitability and good and workmanlike performance. As noted above, this principle was not even questioned by the court in Robichaux. 643 S.W.2d at 393. In Robichaux, a new-home purchaser sued the seller-builder for alleged defects in the house. The purchaser had agreed to waive the implied warranties in the sales contract, but he argued that the waiver language was inadequate to be effective. The supreme court held the waiver language in the contract was enforceable, reiterating the long-held rule that "[t]he parties to a contract have an obligation to protect themselves by reading what they sign." Id. The implication is that the court considered the parties to have been on an equal footing in their ability to negotiate the terms of their home purchase contract.
Every day throughout the state, home buyers negotiate with home sellers over the terms of the transaction. As it happens, some consumers are better negotiators than others. But they all share the position of greatest strength in the transaction-the ability to walk away from a deal they do not like. Unlike the mobile home owner in Melody Home who was, as a practical matter, forced to look to the manufacturer to repair defects in his home, a prospective new-home purchaser is not forced by circumstances or any other reason to buy a home under a contract that waives the implied warranties. To the extent the majority considers such a transaction to be a contract of adhesion, I must respectfully disagree.
Melody Home, in the course of making a good point, went much too far by broadly condemning any attempt by the parties to a new-home sale to freely negotiate an agreement that substitutes contractual warranty provisions for the legally implied warranty. The better and more practical solution seems to be that which was expressed by the supreme court in Robichaux-simply make sure that the disclaimer of implied warranties is made known to the consumer in language that is "clear and free from doubt," or "clear and unequivocal," or however the court chooses to express the degree of notice that must be given to the consumer.
Centex Homes argues, quite rightly, that Robichaux should control this case. And while I may agree with the reasons given, the fact remains that Robichaux was overruled by Melody Home. Accordingly, I am constrained to follow what I believe is an ill-considered extension of the Melody Home non-waiver holding to new home sales. Perhaps this case will provide a means for the supreme court to reexamine the scope of Melody Home and, hopefully, reestablish the more reasonable approach to the issue articulated in Robichaux.
PAUL W. GREEN
Justice
PUBLISH
1. Parenthetically, it should be noted that the anti-waiver holding of Melody Home has nothing to do with the facts of that case and is only dicta. No attempted waiver of implied warranties was involved. Moreover, the question of whether a consumer could waive an implied warranty of habitability or good and workmanlike repair was never raised by the parties. See 741 S.W.2d at 356 n 1 (Gonzalez, concurring). The issue before the court was purely whether the homebuilder/repairer had breached the Humber implied warranty of habitability, and whether a service provider was liable for breach of an implied warranty to render repair services in a good and workmanlike manner. Id. Notwithstanding that the anti-waiver holding is dicta, it is difficult to ignore the fact that the court specifically overruled Robichaux. Id. at 355.