Dale R. Horning Co. v. Falconer Glass Industries, Inc

730 F. Supp. 962 (S.D. Ind. 1990)

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Nature of the Case

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Facts

P is engaged in the business of installing and glazing commercial glass products. P was a subcontractor on the Finance Federal Credit Union construction project in Indianapolis. P was to install a curtain wall and other glass in the building, and time was of the essence. The building could not be completely enclosed until P was finished. P would incur daily penalties of $150.00 and possibly be terminated as the glazing subcontractor if it did not meet deadlines. P was to be substantially finished with its work by October 3, 1986. P ordered a quantity of 1/4-inch Spandrel, a ceramic-backed glass product from D. It was agreed to be delivered within three to four weeks. There was no discussion of limiting remedies or disclaiming warranties over the phone. D knew or had reason to know of P's general or particular requirements at the time of contracting. P then sent D a confirming order form. This document contained no language regarding warranties or damages and noted in handwriting that shipment was to be on an 'as needed' basis. D sent off its form to P. The front side of D's form indicated that it confirmed 'verbal 8/4/86,' that the product was due in '3rd Qtr. 1986,' and that manufacturing time would be four weeks. D's form contained fine print on the reverse side, with 16 separate paragraphs under the heading 'General Terms and Conditions of Sale.' Paragraph 7 recited that the product would be free from defects. Paragraph 8, however, added that the buyer's 'exclusive and sole remedy' for defective goods 'shall be to secure replacement. . . .' It also added that D shall not be liable for 'special, direct, indirect, incidental or consequential damages. . . .' D delivered a shipment of defective Spandrel to P. P notified D, and attempted to correct the defects per D's instructions. P and informed D it was going to temporarily install the glass to enclose the structure by the deadline date. P then told D it would be liable for P's extra costs. P expected D to pay for the extra costs incurred because of the defects in the product. P eventually invoiced D for the charges relating to the Spandrel installation less the expenses and charges that would have been incurred had the original shipment been satisfactory. P's invoice was in the sum of $19,415.67. In the commercial glass industry, it is common practice for suppliers to place restrictive warranty terms on the back of their forms. None of P’s employees were aware of the restrictions on D’s forms.