Office Supply Co., Inc. v. Basic/Four Corporation

538 F.Supp. 776 (1982)

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Nature of the Case

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Facts

Office (P) sells office supplies. Basic (D) manufactures and sells computer hardware and software. P purchased computer hardware and leased computer software from D. P claims that the system was defective and caused it to suffer substantial losses. It seeks compensation for 'lost customers, income, goodwill and executive time and incurred additional hardware and software expense, office form expense, personnel expense, and maintenance expense, all to its damage in the sum of $ 186,000 plus reasonable interest since April 1975.' P signed a contract for the purchase of computer hardware and software from D. D advised P that the warranty on the hardware would expire on July 1, 1975. In a letter dated October 6, 1975, P advised D that it was P's understanding that D warrants its programs, when used in accordance with D operating instructions, to be free from 'defects' for a period of ninety days, and that D will correct such 'defects' promptly when they are brought to your attention. D's warranty on the software expired on January 6, 1976. P had to hire independent programmers who found there was a major defect in the software system. But there is no evidence that the defect arose until after July 1976, which was after the end of the ninety-day period during which D continued to warrant its software applications to be free from defects. P sued D. Both parties moved for summary judgment. D contends in its motion for summary judgment that this action is barred by the applicable statute of limitations, that the warranty disclaimer and damage limitation provisions in the contact are valid and binding, and therefore P is entitled to no relief, and that Ps second cause of action, which is based not on the UCC but a negligence tort theory, does not state a cognizable claim. P's summary judgment motion consists of a denial of each of those contentions and arguments favoring the application of contrary rules of law at the ultimate trial of this action.