Sierra Diesel Injection Serv., Inc. v. Burroughs Corp.

874 F.2d 653 (9th Cir. 1989)

 

RULE:

Whether several documents are integrated to form one contract is a factual question, and the presence of a merger clause while often taken as a strong sign of the parties' intent, is not conclusive in all cases. 

FACTS:

A family business purchased computers from a corporation that did not perform functions that the corporation represented in a letter they would perform, and the family business sued the corporation for appellant. The trial court found in favor of the family business. On appeal, the corporation asserted that the presence of merger clauses in the contracts should determine that the contracts were integrated and that the warranty disclaimers effectively freed it from liability for representations made in the letter. 

ISSUE:

Were the contracts fully integrated?

ANSWER:

No

CONCLUSION:

The court held that the contracts were not fully integrated because the agreement between the parties involved several different kinds of writings, and therefore the warranty disclaimer clauses in the contracts were ineffective to waive the express warranties contained in the letter. The court also held that because appellee was not familiar with either computers or contracts, and because the warranty disclaimers were printed on the backs of the contracts, the disclaimers were not conspicuous under Nevada law.

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