Burbic Contracting Co., Inc. v. Cement Asbestos Prod. Co.
Burbic Contracting Co., Inc. v. Cement Asbestos Prod. Co.
Opinion
Cement Asbestos Products Company (CAPCO), a manufacturer and supplier of pipe, brought suit against Burbic Contracting Company for the price of materials sold to it under an oral agreement. Burbic, in its answer, asserted that the pipes were defective and developed leaks and counterclaimed against CAPCO. CAPCO claimed that the pipe in question was not defective and that the leaks were caused by the improper installation of the pipes by Burbic's employees. As Burbic's surety for a portion of CAPCO's claim against Burbic, Hartford Accident and Indemnity Company was also named as a defendant. Robintech, the manufacturer of the pipe, was joined as a third party defendant.
CAPCO and Burbic made an oral agreement for the sale and purchase of a specified amount of polyvinyl chloride pipe. CAPCO shipped the pipe in several installments. Prior to the initial shipment of the pipe, CAPCO sent a printed acknowledgment form to Burbic. Each shipment also included an invoice on CAPCO's form. The acknowledgment form contained the following contractual limitation of remedies on the reverse side of the form:
4. WARRANTY: Seller makes no warranties either expressed, implied, or statutory in regard to products or materials sold hereunder by Seller, except, however, if within 90 days from the date of delivery any place is judged by Seller to be defective in material or workmanship, Seller may repair or replace it, but the full measure of Seller's liability shall be the purchase price paid to Seller for said piece. In no event shall Seller be liable for labor or consequential damages.
The front of the form stated: "ALL SALES SUBJECT TO CONDITIONS OUTLINED ON REVERSE SIDE OF THIS ORDER FORM."
The trial court found that the limitation of remedies was not a material addition to the contract within the meaning of Code 1975, §
Burbic and Hartford assert that the trial court erred in applying the limitations of remedies clause in the present case. The appellants attack the clause on several grounds. First, the appellants contend that the clause is a material alteration of the contract under Code 1975, §
Burbic and Hartford also assert that the trial court erred in failing to admit evidence of subsequent modification of the pipe and evidence of similar claims against CAPCO or Robintech.
Burbic and Hartford attempted to introduce the testimony of another buyer of Robintech's pipe concerning the buyer's complaints and troubles with the pipe. In Meadows v. Coca-ColaBottling, Inc.,
The appellants also contend that the trial court erred in refusing to permit testimony concerning the subsequent modification of the pipe to establish CAPCO's and Robintech's breach of warranty. As the appellants admit, the general rule in Alabama and other states is that evidence of repairs or modifications made by a defendant after the alleged injury occurs is not admissible to show the defendant's antecedent negligence. Montgomery v. Quinn,
"Questions as to the relevancy of testimony is a matter ordinarily within the discretion of the trial court, and unless such discretion has been grossly abused, it will not be considered error on appeal." Costarides v. Miller,
Section
(2) The additional terms are to be construed as proposals for addition to the contract. Between merchants such terms become part of the contract unless:
(a) The offer expressly limits acceptance to the terms of the offer;
(b) They materially alter it; or
(c) Notification of objection to them has already been given or is given within a reasonable time after notice of them is received.
As noted by several courts, Section 2-207 of the Uniform Commercial Code was not drafted with great clarity and courts often have great difficulty determining its meaning. See Dortonv. Collins Aikman Corp.,
The question before this Court is whether a contractual limitation of remedies is a material alteration of the contract between CAPCO and Burbic. The courts are split on this issue.Compare Roto-Lith, Ltd. v. F.P. Bartlett Co.,
In Roto-Lith, Ltd. v. F.P. Bartlett Co. and Boese-HilburnCo. v. Dean Machinery Co., the additional term was a warrantydisclaimer. Both courts held that a warranty disclaimer per se is a material alteration of the contract and thus acceptance of the contract is expressly conditional on assent to the additional term. Both cases are unclear, partially because the courts confuse the issue of whether the additional term prevents the formation of a contract under § 2-207 (1) of the UCC with the issue under 2-207 (2) of whether the term becomes a part of an existing contract. These courts and the appellants rely heavily on comment 4 to § 2-207, which provides that "a clause negating such standard warranties as that of merchantibility or fitness for a particular purpose" materially alters a contract. While this comment may clearly be applicable to a warranty disclaimer, a limitation of remedies is distinguishable. A buyer who is unlikely to be agreeable to a clause negating even the most basic warranties may not *Page 5 object to a reasonable limitation of remedies.
Comment 5 to § 2-207 gives examples of clauses that do not materially alter a contract. Those examples include "a clause limiting the right of rejection for defects which fall within the customary trade tolerances for acceptance with adjustment or otherwise limiting the remedy in a reasonable manner (see Section
The trial judge in his order stated that the contractual limitation of remedies was not a material addition to the contract. The findings of fact of a trial judge, sitting without a jury, will not be reversed unless the result is clearly erroneous or manifestly unjust. There is clear evidence to support the finding that the clause in CAPCO's form limits Burbic's remedy in a reasonable manner, and thus does not materially alter the contract. Code 1975, §
Appellant also attacks the limitation of remedies clause on the ground that the limitation fails in its essential purpose. Code 1975, §
(1) Subject to the provisions of subsections (2) and (3) of this section and of section
7-2-718 on liquidation and limitation of damages:(a) The agreement may provide for remedies in addition to or in substitution for those provided in this article and may limit or alter the measure of damages recoverable under this article, as by limiting the buyer's remedies to return of the goods and repayment of the price or to repair and replacement of nonconforming goods or parts; and
(b) Resort to a remedy as provided is optional unless the remedy is expressly agreed to be exclusive, in which case it is the sole remedy.
(2) Where circumstances cause an exclusive or limited remedy to fail of its essential purpose, remedy may be had as provided in this title.
It should be noted that §
The factfinder must find that a limitation of remedies clause fails in its essential purpose or is unconscionable before it can award damages other than as provided in the limitation. A limitation of remedies to repair or replace goods fails in its essential purpose if the seller does not provide goods which conform to the contract within a reasonable time. PolyconIndustries, Inc. v. Hercules, Inc.,
Burbic also claims that the limitation of remedies is unconscionable. Burbic did not raise this issue at the trial level, and thus is precluded from belatedly asserting the issue for the first time on appeal. Hutchins v. Shepard,
The other contentions of the appellants are without merit. The findings of fact and of law of the trial court are affirmed.
AFFIRMED.
JONES2, EMBRY and ADAMS, JJ., concur.
TORBERT, C.J., concurs in the result.
Reference
- Full Case Name
- Burbic Contracting Co., Inc. v. Cement Asbestos Products Company, a Corp., Hartford Accident and Indemnity Company, a Corp., and Robintech Incorporated, a Corp. Hartford Accident and Indemnity Company, a Corp. v. Cement Asbestos Products Company, a Corp.
- Cited By
- 14 cases
- Status
- Published