The plaintiff, DJ Coleman, Inc. (‘‘DJ Coleman’’), is a farm corporation that is incorporated in the State of North Dakota and conducts farming operations in Burleigh County, North Dakota. DJ Coleman’s principal, Clark Coleman, is responsible for DJ Coleman’s commercial farming operations. Clark Coleman is a licensed pesticide purchaser and applicator. The defendant, Nufarm Americas, Inc. (‘‘Nufarm’’), is an Illinois corporation. Between May 10, 2007 and May 24, 2007, Clark Coleman planted different varietals of sunflowers. Clark Coleman used pre-emergent chemicals, Mad Dog®, a generic glyphosate broad-spectrum herbicide, and Spartan®, a herbicide, prior to planting the sunflowers. Between June 21, 2007 and June 24, 2007, Clark Coleman sprayed his post-emergent sunflower crops with a tank mix of Assert®, Scoil®, and Asana®. Nufarm is the manufacturer of Assert® and the wholesale distributor to United Agri Products, Inc. (‘‘UAP’’), the direct North Dakota retail seller to Clark Coleman. Clark Coleman did not contact Nufarm for approval before tank mixing Assert®, Scoil®, and Asana® in 2007. DJ Coleman alleges that Assert® caused severe damage to its 2007 sunflower crop by producing stunted and deformed heads, and seeks economic and non-economic damages.

   * * * DJ Coleman alleges claims of products liability, negligence, failure to warn, breach of warranties, and violations of N.D.C.C. chs. 51-12 and 51-15 for false and deceptive advertising. Nufarm now moves for summary judgment on each claim.

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(2) Application of Warranty Language
               Limiting Damages

 Nufarm contends that the Assert® label effectively limits any damages for breach of warranties to either the purchase price or the replacement of the product. Section 41-02-94 of the North Dakota Century Code permits the recovery of consequential damages for injury to property proximately resulting from any breach of warranty. However, Section 41-02- 98 of the North Dakota Century Code, which is modeled after Section 2-719 of the Uniform Commercial Code, allows the parties to an agreement to limit the remedies available upon breach and to exclude consequential damages:

    41-02-98. (2-719) Contractual modification or limitation of remedy.

1. Subject to the provisions of subsections 2 and 3 of this section and of section 41-02-97 on liquidation and limitation of damages:

(a) The agreement may provide for remedies in addition to or in substitution for those provided in this chapter and may limit or alter the measure of damages recoverable under this chapter, 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. If circumstances cause an exclusive or limited remedy to fail of its essential purpose, remedy may be had as provided in this title.
3. Consequential damages may be limited or excluded unless the limitation or exclusion is unconscionable. Limitation of consequential damages for injury to the person in the case of consumer goods is prima facie unconscionable but limitation of damages where the loss is commercial is not.

   Nufarm contends that the Assert® label limits the remedies available to the purchase price of the product. The Assert® label reads as follows:

To the extent allowed by law, Nufarm or Seller shall not be liable for any incidental, consequential or special damages resulting from the use or handling of this product. To the extent allowed by law, THE EXCLUSIVE REMEDY OF THE USER OR BUYER, AND THE EXCLUSIVE LIABILITY OF NUFARM AND SELLER FOR ANY AND ALL CLAIMS, LOSSES, INJURIES OR DAMAGES (INCLUDING CLAIMS BASED ON BREACH OF WARRANTY, CONTRACT, NEGLIGENCE, TORTS, STRICT LIABILITY OR OTHERWISE) RESULTING FROM THE USE OR HANDLING OF THIS PRODUCT, SHALL BE THE RETURN OF THE PURCHASE PRICE OF THE PRODUCT OR AT THE ELECTION OF NUFARM OR SELLER, THE REPLACEMENT OF PRODUCT.

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   The doctrine of unconscionability permits a court to ‘‘‘deny enforcement of a contract because of procedural abuses arising out of the contract’s formation and substantive abuses relating to the terms of the contract.’’’ [Citation.] The determination of whether a contractual provision is unconscionable is a question of law. [Citation.] ‘‘The court is to look at the contract from the perspective of the time it was entered into, without the benefit of hindsight. The determination to be made is whether, under the circumstances presented in the particular commercial setting, the terms of the agreement are so one-sided as to be unconscionable.’’ [Citation.]

   North Dakota law provides the Court with several options when a contract, or clause of a contract, is found to be unconscionable:

1. If the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result.
2. When it is claimed or appears to the court that the contract or any clause thereof may be unconscionable the parties shall be afforded a reasonable opportunity to present evidence as to its commercial setting, purpose, and effect to aid the court in making the determination.

   N.D.C.C. § 41-02-19.

   There is no North Dakota case that addresses whether a limitation of remedies provision is unconscionable for injury resulting from the application of agricultural chemicals. * * * 

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   Courts from other jurisdictions vary on whether a limitation of remedies provision is unconscionable in the chemical agriculture business. * * *

   In order to find that a provision is unconscionable, there must be a showing of both procedural and substantive unconscionability. ‘‘‘The concept of unconscionability must necessarily be applied in a flexible manner, taking into consideration all of the facts and circumstances of a particular case.’’’[Citation.]

(a) Procedural Unconscionability 

   ‘‘Procedural unconscionability focuses upon formation of the contract and fairness of the bargaining process, including factors such as inequality of bargaining power, oppression, and unfair surprise.’’ [Citation.] Courts are more likely to find unconscionability in consumer transactions than in commercial transactions involving experienced parties [Citation.] ‘‘Courts’ general skepticism of unconscionability claims in purely commercial transactions stems from the presumption that businessmen possess a greater degree of commercial understanding and substantially stronger economic bargaining power than the ordinary consumer.’’ [Citation.] Nevertheless, the North Dakota Supreme Court has stated:

[G]eneralizations are always subject to exceptions and categorization is rarely an adequate substitution for analysis. With increasing frequency, courts have begun to recognize that experienced but legally unsophisticated businessmen may be unfairly surprised by unconscionable contract terms … and that even large business entities may have relatively little bargaining power, depending on the identity of the other contracting party and the commercial circumstances surrounding the agreement.

   * * * It is undisputed that DJ Coleman had no bargaining power to alter the language of the limitation of remedies provision. The limitation of remedies provision contained on the Assert® label was pre-printed and was not negotiated. There is a substantial inequality in bargaining power between DJ Coleman and Nufarm. DJ Coleman is a commercial farming operation located in North Dakota, and Nufarm is part of an enormous, highly diversified, and international conglomerate. * * * the facts of this case do not demonstrate an element of unfair surprise. Clark Coleman testified that he used Assert® for ten years prior to 2007. Nonetheless, the evidence reveals that the parties had unequal bargaining power and there was no room for meaningful negotiation. The purchasers of herbicides, regardless of their experience, are not in a position to bargain for more favorable terms than those listed on the pre-printed label, nor are they in a position to test the effectiveness of a herbicide before purchasing it. The fact that Clark Coleman was an experienced farmer that had used Assert® on sunflower crops for ten years should not control whether he is entitled to consequential damages for a breach of warranty. Accordingly, the Court finds that the limitation of remedies provision was procedurally unconscionable.

(b) Substantive Unconscionability

   Substantive unconscionability focuses on the harshness or one-sidedness of the limitation of remedies provision. [Citation.] The Official Comment to Section 2-719 of the Uniform Commercial Code provides:

However, it is of the very essence of a sales contact that at least minimum adequate remedies be available. If the parties intend to conclude a contract for sale within this Article they must accept the legal consequence that there be at least a fair quantum of remedy for breach of the obligations or duties outlined in the contract. Thus any clause purporting to modify or limit the remedial provisions of this Article in an unconscionable manner is subject to deletion and in that event the remedies made available by this Article are applicable as if the stricken clause had never existed.

   The clause at issue here would limit DJ Coleman’s remedy for a breach of an express warranty to the purchase price of Assert® or the replacement of the product. The Court finds that the limitation of remedies provision is substantively unconscionable. ‘‘[T]he farmer is required to expend large sums of money before any defect [ ] is noticeable, and once a defect is found an entire year’s crop might be worthless. Once the crop has failed, the farmer’s only recourse is monetary compensation to cover his lost profit and expenditures; replacement and repair are not viable options.’’ [Citation.] It is clear that the allocation of risk for defective herbicides is better shouldered by the manufacturer of the herbicide, rather than the consumer. The consumer does not have the ability or resources to test its use, but the manufacturer does. The Court finds that the limitation of remedies provision on the Assert® label is unconscionable, both procedurally and substantively and, therefore, unenforceable. Accordingly, damages for a breach of express warranty of fitness for a particular purpose are not limited to the purchase price or replacement of the product.

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   *** Summary judgment is granted on the Plaintiff’s products liability, negligence, failure to warn, breach of implied warranties, and statutory violation * * * claims. Summary judgment is denied on the Plaintiff’s breach of express warranties claim.