Diamond Fruit Growers, Inc. v. Krack Corp.

Facts

The Defendant, Krack Corp. (the "Defendant"), is a manufacturer of cooling units. Metal-Matic supplies steel tubing to the Defendant for the cooling units. The Defendant and Metal-Matic have followed the same course of dealing for several years. The Defendant sends a blank purchase order to Metal-Matic stating how much tubing they would need each year. Throughout the year when tubing was needed, the Defendant would release purchase orders. Metal-Matic would respond by sending an acknowledgement form and then shipping the tubing. Metal-Matic's acknowledgement form "disclaimed all liability for consequential damages and limited Metal-Matic's liability for defects in the tubing to refund of the purchase price or replacement or repair of the tubing." This term was not in the Defendant's purchase order. Metal-Matic's acknowledgement form also included the following statement "Metal-Matic, Inc.'s acceptance of purchaser's offer or its offer to purchaser is hereby expressly made conditional to purchaser's acceptance of the terms and provisions of the acknowledgment form." An employee of the Defendant corporation once confronted an employee of Metal-Matik about the terms of the acknowledgement form in an attempt to get them amended. However, Metal-Matic's employee refused and the parties continued doing business. In February 1981, the Defendant sold one of its cooling units to the Plaintiff, Diamond Fruit Growers, Inc. (the "Plaintiff"). The unit began leaking ammonia in January 1982. The Plaintiff brought suit against the Defendant to recover the value of the fruit lost due to the leak. The Defendant brought a third party complaint against Metal-Matic. The jury found that the Defendant was liable to the Plaintiff, but that Metal-Matic was liable to the Defendant in contribution for 30% of its liability. Metal-Matic appealed.