Midwest Grain Products Of Illinois, Inc. v. Productization, Inc. And Cmi Corp.

228 F.3d 784 (2000)

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Nature of the Case

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Facts

P sent D a letter requesting a quote on grain dryers. D quoted a total price of $1,515,800. P accepted D's offer through a purchase order. D then turned to CMI (D1) to manufacture the dryers. P sent D1 a set of specifications for the dryers P wanted. D1 sent a fax with price terms and stating that 'acceptance of the order will be subject to receipt by CMI of a letter from Midwest Grain agreeing to make payment, with checks made payable jointly to CMI and Productization.' D responded with a purchase order, which also contained various specifications and drawings related to the dryers. D1 sent a fax asking for some changes. D1 asked again that D procure a letter from P agreeing to make payments with checks made payable jointly to Ds, and setting out the timing of P's payments. D submitted a revised purchase order that reflected D's commitment to obtain the letter from P and a page of fine print 'terms and conditions.' Paragraph 4 was entitled 'Warranty,' and read as follows: Seller expressly warrants that all materials and work covered by this order will conform to the specifications, drawings, samples, or other description furnished or specified by Buyer, and will be merchantable, of good material and workmanship, and free from defect. Seller expressly warrants that all the material covered by this order which is the product of Seller or in accordance with Seller's specifications will be fit and sufficient for the purposes intended. P sent the requested letter directly to D1 'make payment for equipment purchased by Productization, Inc. from CMI Corporation for its [i.e., Midwest's] project with check(s) payable jointly to Productization, Inc. and CMI Corporation.' D1 sent copies of its equipment sales order to D. These were essentially order confirmation forms; they detailed the units purchased, price, shipping terms, and other terms of the sale. D1 sent a third 'equipment sales order and security agreement' to D. That form mirrored the May 14 and May 17 forms, bit added a new page, again filled with fine print, that presented D1's terms of sale. Paragraph 1 of these terms included the following language: 'No other terms are acceptable, and any proposed terms or conditions which vary from or are in addition to those contained in this order shall be deemed rejected unless expressly approved by CMI in a writing signed by it.' Paragraph 8 addressed warranties, and said in pertinent part: CMI warrants such equipment, accessories, parts and other goods covered by this order and as are manufactured by CMI against defective material or workmanship for a period of six (6) months after date of first delivery or for one thousand (1,000) hours of use, whichever comes first; . . . . THIS WARRANTY IS EXPRESSLY IN LIEU OF AND EXCLUDES ALL OTHER WARRANTIES, EXPRESSED OR IMPLIED (INCLUDING ANY WARRANTY OF MERCHANTABILITY AND FITNESS OF ANY PRODUCT OR GOODS FOR A PARTICULAR PURPOSE), AND ALL OTHER OBLIGATIONS OR LIABILITIES ON CMI'S PART, AND CMI NEITHER ASSUMES NOR AUTHORIZES ANY OTHER PERSON TO ASSUME FOR CMI ANY OTHER LIABILITY IN CONNECTION WITH THE SALE OF CMI'S PRODUCTS. THERE ARE NOT ANY WARRANTIES WHICH EXTEND BEYOND THE DESCRIPTION ON THE FACE OF THIS ORDER. Both dryers were delivered, and P experienced a variety of problems with both units. P then filed this action. The court granted Ds summary judgment and P appealed.