A proposed deal which in commercial understanding has in fact been closed is recognized as a contract. Therefore, any additional matter contained in the writing intended to close the deal falls within Idaho Code § 28-2-207(2) and must be regarded as a proposal for an added term.
Appellant electric company filed an action against appellee electrical equipment manufacturer alleging that appellee was liable for damages that resulted from a fire caused by appellee's defective voltage regulator. Appellee alleged that its liability was limited to the cost of the part under the parties' sales contract. The district court granted summary judgment to appellee. The court affirmed.
Were limitations of liability in a manufacturer's sales form part of the contract between the parties?
The court held that the clause that limited appellee's liability, which was on the back of its price quotation, was part of the parties' contract. The court rejected appellant's claim that its order form was not an acceptance of the contract because it stated terms inconsistent with appellee's clause. Pursuant to U.C.C. §2-207(1), additional terms in appellant's acceptance did not act as a counter offer unless its acceptance was clearly conditioned upon appellee's assent to the new terms. The court held that the phrase on appellant's form that it "superseded all previous agreements" did not constitute such a statement. Lastly, the court held that the parties were business entities of relatively equal strength, thus the disclaimer was an effective defense against a strict liability claim.