Idaho
Power sent an inquiry to Westinghouse about buying a voltage
regulator.Westinghouse sent
back a quote with some terms and conditions on the back, including a limitation
of liability.Idaho Power sent a purchase order
for the regulator with language saying that acceptance of the order trumped
all previous agreements (including the limited liability provision in
Westinghouse's quote).
Idaho
Power installed the regulator, and it caught fire destroying some other
machinery.Westinghouse
replaced the regulator, but refused to pay for the damaged machinery.Idaho Power sued Westinghouse for
damages, based on breach of contract and negligence.
The
Trial Court awarded summary judgment to Westinghouse based on the
liability limitations on their form.Idaho Power appealed.
Appellate
Court affirmed.
Appellate
Court found that Idaho Power's response to the quote was an acceptance
even though additional terms were added.
Appellate
Court also concluded that this acceptance was not conditional on any new
or different terms.Idaho
Power did not come right out and say that they weren't accepting unless
Westinghouse agreed to supersede all previous agreements.
Appellate
Court considered whether Westinghouse's disclaimer was part of the
contract.The Court found
that Idaho Power failed to contest Westinghouse's disclaimer, and thus
the disclaimer gets into the contract under UCC § 2-207(2).
UCC
§ 2-207 says that in
commercial transactions, the common law mirror image rule
will not be used.Instead,
a deviant acceptance is still
treated as an acceptance as long as it is not expressly conditional on
new and different terms. If you go ahead with the deal, the original
contract is valid.If you
want your own terms, you have to expressly reject the original contract
and refuse to accept the goods until they accept your terms.
According
to UCC 2-207(2), if there is a
dispute, the terms of the acceptance are the ones that will be applied,
unless:
The
offer expressly limits acceptance to the original terms
The
new terms materially alter the
deal
Notification
of objection to the new terms is given
