Alaskan, alleging that Alaskan was liable for any damages Mechanicals incurred as a result of the defective stub ends. Discuss.
Emery Industries (Emery) contracted with Mechanicals, Inc. (Mechanicals), to install a pipe system to carry chemicals and fatty acids under high pressure and temperature. The system required stainless steel “stub ends” (used to connect pipe segments), which Mechanicals ordered from McJunkin Corporation (McJunkin). McJunkin in turn ordered the stub ends from the Alaskan Copper Companies, Inc. (Alaskan). McJunkin’s purchase order required the seller to certify the goods and to relieve the buyer of liabilities that might arise from defective goods. After shipment of the goods to McJunkin, Alaskan sent written acknowledgment of the order, containing terms and conditions of sale different from those in McJunkin’s purchase order. The acknowledgment provided a disclaimer of warranty and a requirement for inspection of the goods within ten days of receipt. The acknowledgment also contained a requirement that the buyer accept all of the seller’s terms. The stub ends were delivered to Mechanicals in several shipments over a five-month period. Each shipment included a document reciting terms the same as those on Alaskan’s initial acknowledgment. Apparently, McJunkin never objected to any of the terms contained in any of Alaskan’s documents. After the stub ends were installed, they were found to be defective. Mechanicals had to remove and replace them, causing Emery to close its plant for several days. McJunkin filed a complaint alleging that Mechanicals had failed to pay $26,141.88 owed on account for the stub ends McJunkin supplied. Mechanicals filed an answer and counterclaim against McJunkin, alleging $93,586.13 in damages resulting from the replacement and repair of the defective stub ends. McJunkin filed a third-party complaint against Alaskan, alleging that Alaskan was liable for any damages Mechanicals incurred as a result of the defective stub ends. Discuss.
Company A has accepted the purchase order form from Company M by the act of sending the goods, which denotes that Company A is responsible in case of any defective products.
Explicit agreement is not given by Company M to Company A. The buyer is entitled to receive compensation for the defective goods sold.
The decision is going to be favorable for Company M based on the variant acceptances clause. Company M has sent certain terms and conditions while Company A has sent contradictory terms and conditions. When there is battle of forms, the intent of the party to the contract is analyzed.
Company A cannot relieve itself from the liability limitation. Company M can recover the loss on defective products from Company A. However, Company A has to pay the balance of amounts to Company M after deducting the amount for defective goods.