Belden Inc. v. American Electronic Components, Inc.

885 N.E.2d 751 (Ind. Ct. App. 2008)

 

RULE:

The repeated sending of a writing which contains certain standard terms, without any action with respect to the issues addressed by those terms, cannot constitute a course of dealing which would incorporate a term of the writing otherwise excluded under Uniform Commercial Code § 2-207.

FACTS:

Belden made wires, which it sold to AEC. AEC used those wires to create automobile sensors, which were put into Chrysler vehicles. Belden had originally certified that it was using Quantum as a supplier of insulation for the wires it made. Belden later switched to a different insulation supplier, and the insulation was defective, requiring Chrysler to recall and fix vehicles it had sold. AEC sued Belden for damages, but Belden claimed its contract with AEC limited the amount of damages that AEC could collect and that it did not provide an express warranty for its products. The trial court granted AEC’s motion for partial summary judgement, and Belden appealed. The appellate court affirmed the trial court’s decision.

ISSUE:

Does a boiler plate contract term become a part of a contract when it is used over many course of dealings, even if the other party never assents to the term?

ANSWER:

No.

CONCLUSION:

Uniform Commercial Code § 2-207(3) applies when terms of a contract are not assented to, but the parties, by their actions, create a contract. Here, the parties had sufficient business together to establish a contract under § 2-207(3). Therefore, the additional and different terms in the written contracts, such as Belden’s limitation on damages, did not become a part of the contract. Additionally, the parties' course of dealing established that Belden made an express warranty regarding its compliance with the quality control standards. Belden breached that warranty when it used insulation from a different supplier that did not meet the quality standards.

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