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Contracts Keyed to Templin
Diamond Fruit Growers, Inc. v. Krack Corp. v. Metal-matic, Inc.
Citation:
794 F.2d 1440 (9th Cir. 1986)Facts
For approximately ten years, Krack Corporation purchased steel tubing from Metal-matic for use in manufacturing cooling units. Their business relationship followed a consistent pattern: Krack would send annual blanket purchase orders followed by release purchase orders throughout the year, and Metal-matic would respond with acknowledgment forms containing disclaimers of liability for consequential damages and limiting liability to refund or replacement. Metal-matic’s form expressly conditioned acceptance on Krack’s assent to these terms. On at least one occasion, Krack’s purchasing manager objected to these terms in discussions with Metal-matic’s executive vice president, but Metal-matic refused to change them. Krack continued to accept and pay for tubing after these discussions. In 1981, Krack sold a cooling unit to Diamond Fruit Growers, which later developed an ammonia leak that damaged stored fruit. Diamond sued Krack, who then sought contribution from Metal-matic, claiming the leak was caused by defective tubing.
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