Ionics, Inc. v. Elmwood Sensors, Inc.

110 F.3d 184 (1st Cir. 1997)

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Nature of the Case

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Facts

Elmwood (D) manufactures thermostats. Ionics (P) makes hot and cold water dispensers. P purchased thermostats from D for its water dispensers. Each time P purchased from D, it sent a purchase order that contained small type with various conditions. The terms of that order under dispute are 19 and 20 as listed in the casebook. Those conditions pertained to remedies and acceptance of the order. When P placed its first order, it also sent a letter that explained how important its terms and conditions were and that if D took any exception to them, D must clearly express such exceptions in writing and if not, P would then assume that there was agreement with its terms. With each order acknowledgment, D also sent its own form stating that only its terms and conditions were to apply unless rejected in writing within 10 days and that form also referred to the nature of its letter as a counteroffer. On the reverse side of D’s form were terms and conditions including warranty information. That warranty negated the implied warranty of merchantability and no other express or implied warranties other than those listed. It also stated that D would not be liable for any consequential or incidental damages and that the express and exclusive remedy was the repair of any defective goods or the granting of a reasonable allowance. P sued D for a breach of contract alleging that the thermostats caused fires. D moved for partial summary judgment, and that was denied. A question of law was certified to the Massachusetts Supreme Court.