Diamond Fruit Growers, Inc. v. Krack Corp.

794 F.2d 1440 (9th Cir. 1986)



Or. Rev. Stat. § 72.2070(1) is subject to a proviso. If a definite and seasonable expression of acceptance expressly conditions acceptance on the offeror's assent to additional or different terms contained therein, the parties' differing forms do not result in a contract unless the offeror assents to the additional terms. If the offeror assents, the parties have a contract and the additional terms are a part of that contract. If, however, the offeror does not assent, but the parties proceed with the transaction as if they have a contract, their performance results in formation of a contract. Or. Rev. Stat. § 72.2070(3). In that case, the terms of the contract are those on which the parties' forms agree plus any terms supplied by the Uniform Commercial Code. 


Defendant manufactured cooling units that contained steel tubing that it purchased from defendant supplier. The suppliers' acknowledgement form disclaimed all liability for consequential damages and limited its liability for defects in the tubing. Defendant sold a cooling unit to plaintiff that began leaking ammonia from a cooling coil made of steel tubing. Plaintiff sued defendant which in turn sued its supplier. The trial court held in favor of defendant manufacturer. On appeal, the court affirmed the judgment of the trial court.


Did defendant supplier's disclaimer of liability became part of the contract between these parties?




Defendant manufacturer's conduct did not indicate unequivocally that it intended to assent to the terms of the supplier's disclaimer when it continued to accept and pay for tubing once the supplier indicated that it was willing to sell tubing only if its warranty and liability terms were part of the contract and, therefore, did not amount to the assent contemplated by Or. Rev. Stat. § 72.2070. If supplier does not want to be bound unless the buyer manufacturer assents to its terms, it can protect itself by not shipping until it obtains that assent. 

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