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Ionics, Inc. v. Elmwood Sensors - 896 F. Supp. 66

Rule:

Both Mass. Gen. Laws ch. 106, § 2-207 and R.I. Gen. Laws § 6A-2-207 have adopted the same provision of the Uniform Commercial Code. Thus, each statute provides: (1) A definite and seasonable expression of acceptance or a written confirmation which is sent within a reasonable time operates as an acceptance even though it states terms additional to or different from those offered or agreed upon, unless acceptance is expressly made conditional on assent to the additional or different terms. (2) The additional terms are to be construed as proposals for addition to the contract. Between merchants such terms become part of the contract unless: (a) the offer expressly limits acceptance to the terms of the offer; (b) they materially alter it; or (c) notification of objection to them has already been given or is given within a reasonable time after notice of them is received. (3) Conduct by both parties which recognizes the existence of a contract is sufficient to establish a contract for sale although the writings of the parties do not otherwise establish a contract. In such case the terms of the particular contract consist of those terms on which the writings of the parties agree, together with any supplementary terms incorporated under any other provisions of this chapter.

Facts:

Plaintiff Ionics Inc. manufactures hot and cold water dispensers; Defendant Elmwood Sensors manufactures thermostats. During 1990 and 1991, Ionics purchased approximately 16,000 thermostats from Elmwood and installed them as component parts in water dispensers that were subsequently leased to third parties. Soon after they were placed in use, several Ionics water dispensers caused fires which, Ionics alleges, resulted from defects in Elmwood's sensors. After Elmwood rejected Ionics' claim for damages, Plaintiff Ionics brought a breach of contract and warranty action against Defendant Elmwood, alleging that thermostats that it had purchased from Elmwood were defective. Defendant Elmwood moved for summary judgment, claiming that even if it was found that its thermostats caused the fires, its liability to the buyer was limited by terms contained in an acknowledgment form that was included in every shipment of thermostats to Ionics.

Issue:

Does the acknowledgment form in the product shipment govern the terms and warranties of the agreement between the parties?

Answer:

No.

Conclusion:

The court denied Elmwood's motion for partial summary judgment in the breach of contract and warranty action brought against it by Ionics, the buyer. The court, after reviewing both the acknowledgment form and the purchase order, concluded that they were mirror opposites with respect to warranties and limitation of liability. Under Massachusetts Law, in cases where some terms of the parties' writings are in conflict, only those terms on which the writings were in agreement applied.

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