Belden, Inc., and Belden Wire & Cable Company (collectively Belden) * * * manufactures wire, and [American
Question:
Belden, Inc., and Belden Wire & Cable Company (collectively ‘‘Belden’’) * * * manufactures wire, and [American Electronic Components, Inc ] AEC manufactures automobile sensors. Since 1989, AEC, in repeated transactions, has purchased wire from Belden to use in its sensors.
In 1996 and 1997, Belden sought to comply with AEC’s quality control program and provided detailed information to AEC regarding the materials it used to manufacture its wire. In its assurances, Belden indicated that it would use insulation from Quantum Chemical Corp. (‘‘Quantum’’). In June 2003, however, Belden began using insulation supplied by Dow Chemical Company (‘‘Dow’’). The Dow insulation had different physical properties than the insulation provided by Quantum.
In October 2003, Belden sold AEC wire manufactured with the Dow insulation. AEC used this wire to make its sensors, and the insulation ultimately cracked. Chrysler had installed AEC’s sensors containing the faulty wire in approximately 18,000 vehicles. Chrysler recalled 14,000 vehicles and repaired the remaining 4,000 prior to sale. Pursuant to an agreement with Chrysler, AEC is required to reimburse Chrysler for expenses associated with the recall.
In 2004, AEC filed a complaint against Belden seeking consequential damages for the changes in the insulation that resulted in the recall. In 2005, AEC filed a partial motion for summary judgment. In 2006, Belden responded and filed a cross-motion for summary judgment. * * * On July 6, 2007, the trial court entered an order granting AEC’s motion for partial summary judgment and denying Belden’s cross-motion. Belden now appeals.
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‘‘Where an agreement is entirely in writing, the question of whether express warranties were made is one for the court.’’ [Citation.] More specifically, if all of the representations upon which the parties rely were in writing, the existence of express warranties is a question of law. [Citation.] Because the alleged warranty is based on written exchanges, whether the writings are sufficient to create an express warranty is a question of law appropriate for summary judgment.
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Belden claims that these 1996 and 1997 communications did not amount to an express warranty for purposes of the October 2003 contract. Section 2-313 of the UCC provides:
(1) Express warranties by the seller are created as follows:
(a) any affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes part of the basis of the bargain creates an express warranty that the goods shall conform to the affirmation or promise.
(b) any description of the goods which is made part of the basis of the bargain creates an express warranty that the goods shall conform to the description.
(c) any sample or model which is made part of the basis of the bargain creates an express warranty that the whole of the goods shall conform to the sample or model.
(2) It is not necessary to the creation of an express warranty that the seller use formal words such as ‘‘warrant’’ or ‘‘guarantee’’ or that he have a specific intention to make a warranty, but an affirmation merely of the value of the goods or a statement purporting to be merely the seller’s opinion or commendation of the goods does not create a warranty.
‘‘An express warranty requires some representation, term or statement as to how the product is warranted.’’ [Citation.]. There does not seem to be a dispute that in 1996 and 1997 Belden made express warranties regarding its wire. Instead, the issue is whether the 1996 and 1997 statements by Belden regarding certification created an express warranty that extended to the October 2003 contract.
Based on the designated evidence, we believe Belden’s compliance with AEC’s quality control program was essential to its contracts with AEC and was intended to extend to the parties’ repeated contracts. First, Comment 7 to Section 2- 313 provides in part, ‘‘The precise time when words of description or affirmation are made or samples are shown is not material. The sole question is whether the language or samples or models are fairly to be regarded as part of the contract.’’ Thus, although Belden made its initial representations in 1996 and 1997, there is no indication that those representations were limited in time, that Belden subsequently disclaimed its compliance with AEC’s quality control standards, or that AEC changed those standards. As the trial court observed, ‘‘it is illogical to believe that [AEC] intended to rely in this representation for only one (1) shipment of Wire and then to understand that Belden would follow whatever quality procedures it wanted as to future shipments.’’
Further, Comment 5 of Section 2-213 provides in part, ‘‘Past deliveries may set the description of quality, either expressly or impliedly by course of dealing. Of course, all descriptions by merchants must be read against the applicable trade usages with the general rules as to merchantability resolving any doubts.’’ Belden claims that if the parties’ course of dealing was insufficient to incorporate the limitation on damages into the parties’ contract, then the course of dealing is also insufficient to establish an express warranty. We disagree. Irrespective of whether the course of dealing established that AEC assented to Belden’s proposed limitation on damages, the parties’ course of dealing established that Belden made an express warranty regarding its compliance with the quality control standards. The limitation on damages and the express warranty are unrelated issues-there is no correlation between the two.
A course of dealing is conduct ‘‘fairly to be regarded as establishing a common basis of understanding for interpreting their expressions and other conduct.’’ § 1-205(1). It is undisputed that Belden’s wire complied with the AEC’s quality control requirements for the parties’ more than 100 transactions, until October 2003, when Belden switched from Quantum insulation to the Dow insulation without informing AEC of the changes. ***
That Belden and AEC did not repeatedly or routinely ‘‘communicate’’ regarding Belden’s continued use of Quantum insulation does not undermine the parties’ course of dealing. The very point of a course of dealing is to allow the parties’ prior actions create a basis of common understanding. This is exactly what Belden’s 1996 and 1997 assertions taken with its continued use of Quantum insulation did.
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Affirmed.
Step by Step Answer:
Smith and Roberson Business Law
ISBN: 978-0538473637
15th Edition
Authors: Richard A. Mann, Barry S. Roberts