1. In determining the validity of a legislative declaration that
a contract is contrary to public policy, regard is to be had to the
general rule that competent persons shall have the utmost liberty
of contracting and that it is only where enforcement conflicts with
dominant public interests that one who has had the benefit of
performance by the other party to a contract will be permitted to
avoid his own promise. P. 287 U. S.
2. Upon the sale of a machine for cutting and threshing the
buyer's grain in a single operation, there is an implied warranty
under the Uniform Sales Act, adopted in North Dakota, that the
machine is reasonably fit for that purpose. P. 287 U. S.
3. A North Dakota statute provides that the purchaser of
harvesting or threshing machinery for his own use shall have a
reasonable time after delivery for inspecting and testing it, and
that, if it does not prove to be reasonably fit for the purposes
for which it was purchased, he may rescind. It further declares any
agreement contrary to its provisions to be against public policy
and void, thus preventing waiver of the warranty of fitness. In a
case involving the sale of a harvesting and threshing machine it is
in view of conditions in the state to which the
statute was addressed, that it does not violate the due process or
the equal protection clause of the Fourteenth Amendment. Pp.
287 U. S.
62 N.D. 143, 241 N.W. 722, affirmed.
Appeal from a judgment affirming a judgment against the thresher
company, entered upon demurrer to it answer, in a suit against it
to cancel promissory notes following the rescission of a contract
Page 287 U. S. 286
MR. JUSTICE BUTLER delivered the opinion of the Court.
By this appeal, we are called on to decide whether, as construed
below a statute of North Dakota, c. 238, Laws
Page 287 U. S. 287
1919, is repugnant to the due process or equal protection clause
of the Fourteenth Amendment. It declares:
"Sec. 1. Reasonable Time to Discover Defects. Any person, firm,
or corporation purchasing any gas or oil burning tractor, gas or
steam engine, harvesting or threshing machinery for their own use
shall have a reasonable time after delivery for the inspection and
testing of the same, and if it does not prove to be reasonably fit
for the purpose for which it was purchased, the purchaser may
rescind the sale by giving notice within a reasonable time after
delivery to the parties from whom any such machinery was purchased,
or the agent who negotiated the sale or made delivery of such
personal property or his successor, and placing same at the
disposal of the seller."
"Sec. 2. Provisions Contrary to Preceding Section Void. Any
provision in any written order or contract of sale, or other
contract which is contrary to any of the provisions of this Act, is
hereby declared to be against public policy and void."
The complaint of appellee, plaintiff below, shows the following
facts: August 13, 1928, defendant, in consideration of $1,360 to be
paid by plaintiff according to his three promissory notes given
therefor, sold and delivered to the latter a harvester-combine to
be used for the cutting and threshing in a single operation of
grain raised by him. Plaintiff undertook by means of the machine so
to cut and thresh his crop, but, upon a fair trial and test, he
found that it was defective, and could not be used or made fit to
operate for the purpose. September 5, he rescinded the sale in the
manner prescribed by the statute. His notes remained wholly unpaid.
He prayed judgment that defendant return them to him for
cancellation. The answer, asserting that the statute is repugnant
to the due process and equal protection clauses, does not deny the
complaint, but avers that plaintiff gave defendant a written order
by which he waived all warranties, express,
Page 287 U. S. 288
implied, or statutory, and unconditionally promised to pay the
price represented by the notes. Plaintiff demurred. The trial court
sustained the demurrer, and, defendant having elected to stand on
its answer, gave plaintiff judgment in accordance with the prayer
of the complaint. The Supreme Court affirmed. 62 N.D. 143, 241 N.W.
On the facts alleged in the complaint, § 15(1) of the Uniform
Sales Act, Laws 1917, c. 202, implied a warranty by defendant that
the machine was reasonably fit in a single operation to cut and
thresh plaintiff's grain. Allis-Chalmers Mfg. Co. v.
57 N.D. 295, 299, 221 N.W. 75. But it left plaintiff
free to waive such warranty and to purchase on the terms referred
to in the answer. Section 71. Minneapolis Threshing Mach. Co.
54 N.D. 559, 569, 209 N.W. 996.
The question is whether the challenged enactment of 1919 may
prohibit such waivers as contrary to public policy and void, and so
limit the right of seller and purchaser to contract. While that
right is a part of the liberty protected by the due process clause,
it is subject to such restraints as the state in the exertion of
its police power reasonably may put upon it. But freedom of
contract is the general rule, and restraint the exception. The
exercise of legislative authority to abridge it can be justified
only by the existence of exceptional circumstances. Adkins v.
Children's Hospital, 261 U. S. 525
261 U. S.
-546, and cases cited. In determining the validity of
a legislative declaration that a contract is contrary to public
policy, regard is to be had to the general rule that competent
persons shall have the utmost liberty of contracting, and that it
is only where enforcement conflicts with dominant public interests
that one who has had the benefit of performance by the other party
to a contract will be permitted to avoid his own promise. Cf.
Steele v. Drummond, 275 U. S. 199
275 U. S. 205
Twin City Pipe Line Co. v. Harding Glass Co., 283 U.
, 283 U. S.
Page 287 U. S. 289
The object sought to be attained by the statute under
consideration is to protect farmers in an agricultural state
against losses from investments in important machines that are not
fit for the purposes for which they are purchased, and to guard
against crop losses likely to result from reliance upon such
machines. It applies only to sales made to purchasers requiring for
their own use the relatively complicated and costly implements
referred to in § 1. These are used on farms producing grain, and
the raising of such crops is North Dakota's principal industry.
Enormous quantities of farm machinery are required in that state,
and expenditures therefor constitute a large part of the total
investment in farm land and equipment. Most, if not all, of the
tractors, engines, harvesters, and threshers referred to are made
outside North Dakota by a few manufacturers who, through their
agents or dealers, sell them directly to farmers. Forms of sales
contracts generally used are prepared by sellers, and, as pointed
out in the opinion of the state supreme court, the tendency has
been to restrict the rights of purchasers and to lessen the
liability of sellers. Such machines can properly be tested only
during seasons in which they are used, and, especially in the case
of harvester and thresher combines, these periods are short. The
machine sold to plaintiff is a gas and oil-burning harvester and
thresher combine. Machines designed for such purposes are
necessarily complex, and, even under favorable conditions, their
effective use requires skill, experience, and resourcefulness on
the part of operators. In determining whether they are reasonably
suitable and fit for the purposes intended, there is involved a
consideration of the kind and condition of the crops to be
harvested, the periods during which they remain recoverable after
becoming sufficiently ripe and dry to be contemporaneously cut and
threshed, the amount and kind of weeds and other foreign vegetation
growing with the grain, the topography of the fields, and the
Page 287 U. S. 290
dew, and humidity. Such combines have not been long known or
much used in the grain-raising Northwest, and undoubtedly there are
ample grounds for a legislative finding that the farmers of North
Dakota as a class are not sufficiently familiar with them to be
able, without actual test, to form an intelligent opinion as to
their fitness to cut and thresh in a single operation or whether
they safely may be regarded as dependable for use on their farms.
If they were relied on generally in that state and should fail in
the fields, the resulting losses would be of such magnitude and
public concern as to warrant the adoption of measures calculated to
guard against them.
The regulation imposed seems well calculated to effect the
purposes sought to be attained. The evils aimed at do not
necessarily result from misrepresentation or any fraud on the part
of sellers, and at least one of the purposes of the legislation is
to lessen losses resulting from purchasers' lack of capacity,
without opportunity for inspection and trial, to decide whether the
machines are suitable. The statute prevents waiver of the warranty
of fitness implied by the state law. Such warranties tend to
restrain manufacturers from selling unfit or defective machines,
and also from selling any -- even those of appropriate design and
construction for operation in some regions -- for use in places or
under conditions not permitting effective service. And the right of
inspection, test, and rescission that the statute assures to
purchasers enables them, free from peril of serious mistakes,
deliberately to consider whether such machines are reasonably
suitable or fit for the purposes for which they want to use them.
There is nothing in this case to suggest that, under the guise of
permissible regulation, the state unreasonably deprives sellers of
such machines of their right freely to contract, or that in its
practical operation, the statute arbitrarily burdens their
business. Burns Baking Co. v. Bryan, 264 U.
; Weaver v. Palmer Bros.
Page 287 U. S. 291
U.S. 402. The state, in order to ameliorate the evils found
incident to waivers of implied warranties of fitness, merely
declares that such agreements in respect of the sale of the
designated machines are contrary to public policy, and holds the
parties to the just and reasonable rule prescribed by § 15(1) of
the Sales Act. Upon the question of due process, more need not be
The character of the machines, the need of tests to determine
their fitness, the serious losses that ensue if, in actual use,
they prove unfit, and the other considerations alluded to plainly
warrant the classification and special regulation of sales
prescribed by the statute.
We find no substantial support for the contention that the
statute complained of violates the due process or equal protection
clause of the Fourteenth Amendment. Frisbie v. United
states, 157 U. S. 160
157 U. S. 165
Orient Insurance Co. v. Daggs, 172 U.
, 172 U. S. 563
et seq.; Patterson v. Bark Eudora, 190 U.
, 190 U. S. 173
Whitfield v. Aetna Life Ins. Co., 205 U.
, 205 U. S. 495
Chicago, B. & Quincy R. Co. v. McGuire, 219 U.
, 219 U. S. 564
et seq.; National Union Fire Ins. Co. v. Wanberg,
260 U. S. 71
MR. JUSTICE STONE and MR. JUSTICE CARDOZO concur in the