Commercial law (UCC Artcle 2) essay

Gabby Contractor is thegeneral contractor on a project and issued its order¹to Denny, Inc.for some equipment to beused inconnection with theproject.The ordercontained aoneyearmanufacturer'swarranty provision andtherequirement thattheequipment comply with specifications attached tothe order.

Denny, Inc. responded with itspreprinted acknowledgmentcontaining extensive warranty disclaimers, a statement that theterms ofthe acknowledgmentcontrolled the parties' agreement, and a provision deeming silence to be acquiescence to thetermsoftheacknowledgement.²Thepartiesdidnotaddressthe discrepancies intheformsexchanged andproceeded withthetransaction.Denny,Inc.delivered theequipment, andGabby contractors paidforit.Gabby Contractors allegesthat theequipment did not comply with theirspecificationsand thatthey incurred additional costs to installthe non-conforminggoods.Approximately fiveorsix

2ThefaceoftheAcknowledgmentstates:

IT IS UNDERSTOODTHAT OUR ACCEPTANCEOF THISORDERIS SUBJECT TO THE TERMS AND CONDITIONS ENUMERATED ON THE REVERSE SIDE HEREOF, IT BEING STRICLY UNDERSTOOD THAT THESE TERMS AND CONDITIONS BECOME PART OF THIS ORDER AND THE

ACKNOWLEDGEMENT THEREOF."The following was among the terms and conditionson the reverse side of the Acknowledgement."Failure of the Buyer to objectinwriting within five (5)days ofreceipt thereof to Terms ofSale containedintheSeller's acceptance and/or acknowledgement, or other communications, shall be deemed an acceptance of such Terms of Sale by Buyer."

TheDenny,Inc.Acknowledgmentcontainsthefollowingwarrantyterms:

) WARRANTY: Weagree that the apparatus manufacturedby the Seller will befree fromdefects in material and workmanshipfor a period of one year under normal use and service and when properly installed: and our obligation under this agreement is limited solely to repair or replacement at our option, at our factories, of any part or parts thereof which shall within one year from date of original installation or 18 months from date of shipment from factory to the original purchaser, whichever date may first occur be returned to uswithtransportationcharges prepaid which ourexaminationshall disclose to our satisfaction to have been defective.THIS AGREEMENT TO REPAIR OR REPLACE DEFECTIVE PARTS IS EXPRESSLY IN LIEU OF AND IS HEREBY DISCLAIMEROF ALL OTHER EXPRESSWARRANTIES,AND IS IN LIEU OF AND IN DISCLAIMER AND EXCLUSION OF ANY IMPLIED WARRANTIES OF MERCHANTABILITYAND FITNESS FOR A PARTICULARPURPOSE, AS WELL AS ALL OTHER IMPLIED WARRANTIES, IN LAW OR EQUITY, AND OF ALL OTHER OBLIGATIONS OR LIABILITIES ON OUR PART.THERE ARE NO WARRANTIESWHICHEXTENDBEYONDTHEDESCRIPTIONHEREOF...Our

obligationtorepairorreplaceshallnotapplytoanyapparatuswhichshallhavebeen repaired or altered outside our factory in any way "

months afterstart upoftheequipment, a representativeofGabby's client notified Gabby ofproblems with twopieces ofequipment.Inaseries ofletters Gabby requested on-site warranty repairs.Through its manufacturer's representative, Denny, Inc. offered to send itsmechanic to thejob site to inspect the equipment andabsorb thecost oftheservice call if problems discovered were within any component parts it provided.Further, Denny, Inc. required that priorto the service calla purchase order beissued from theclient, to beexecuted by Denny, Inc. for payment for their services in theevent their mechanic discovered problems notcaused by manufacturing defects. Gabby Contractors rejected the proposal onthebasisthattheclient hadawarrantystillineffectforthegoodsand would not issue a separate purchase order for warranty repairs.

Ultimately, theclienthired anindependent contractortorepairthetwopiecesof equipment.The client paid$24,500.00 for therepairs and withheld it from the contractwithGabby Contractors.Abreach ofcontractactionthenensued,with Gabby Contractorsalleging failure byDenny, Inc. toprovide equipment in accordance with the project plans and specifications and failure to provide warranty repairs.

Oncross-motionsforsummaryjudgmentthetrialcourtgrantedpartialsummary

) judgmentinfavorofDenny,Inc.rulingthatitsAcknowledgmentwas a

counteroffer to the Gabby Contract Order and that theAcknowledgment's warrantylimitationsanddisclaimerswerecontrolling.GabbyContractorsfiledan application forinterlocutory appeal fromthepartialjudgment inthisCourt,which was denied.A bench trial was held inDecember 2012 and thetrial court again ruledtheAcknowledgmentwasacounteroffer whichGabby Contractorsaccepted by silenceand that under thewarranty provisions oftheAcknowledgment,Gabby Contractors was not entitled to damages.

On appeal, Gabby Contractorsraises twoissues:

(1)thetrial court erred as a matter oflaw inruling that the Acknowledgment was a counteroffer;and (2) GabbyContractors provedbreachofcontractandcontractwarranty,breachof code warranties, and damages.

Whatresultonfurtherappeal?Fullysupportyouranswer.

¹The Gabby Contractors order provides that the"(m)anufacturershall replace or repairallpartsfound tobedefectiveduringinitial yearofuseatnoadditionalcost".