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M.A. Mortenson Co. v. Timberline Software Corp. - 140 Wash. 2d 568, 998 P.2d 305 (2000)

Rule:

Limitations on consequential damages are generally valid under the Uniform Commercial Code unless they are unconscionable. Wash. Rev. Code § 62A.2-719(3). Whether a limitation on consequential damages is unconscionable is a question of law. Wash. Rev. Code § 62A.2- 302(1). Exclusionary clauses in purely commercial transactions are prima facie conscionable and the burden of establishing unconscionability is on the party attacking it. If there is no threshold showing of unconscionability, the issue may be determined on summary judgment. Washington recognizes two types of unconscionability--substantive and procedural.

Facts:

Petitioner construction contractor purchased respondent's software program to prepare construction bids. After petitioner used respondent's program to prepare a construction bid and discovered the bid was $1.95 million less than it should have been, petitioner sued respondent for breach of warranties alleging the software was defective. The trial court granted respondent's motion for summary judgment. The case was appealed.

Issue:

Was summary judgment in favor of the respondent proper?

Answer:

Yes

Conclusion:

The court of appeals affirmed the order of summary judgment, holding (1) the purchase order between the parties was not an integrated contract; (2) the licensing agreement set forth in the software packaging and instruction manuals was part of the parties contract; and (3) the provision limiting petitioner's damages to recovery of the purchase price was not unconscionable. On review, the court affirmed the decision of the court of appeals. The court held inter alia respondent's limitations of remedies clause was neither substantially nor procedurally unconscionable.

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