Ellmer v. Delaware Mini-Computer Systems, Inc.

• Decision Date: 22 December 1983
• Docket Number: MINI-COMPUTER,No. 05-82-01242-CV,05-82-01242-CV
• Citation: 665 S.W.2d 158
• Parties: 38 UCC Rep.Serv. 751 Faye ELLMER and Datafast Systems, Inc., Appellants, v. DELAWARESYSTEMS, INC., et al., Appellees.
• Court: Texas Court of Appeals

Page 158

665 S.W.2d 158

38 UCC Rep.Serv. 751

Faye ELLMER and Datafast Systems, Inc., Appellants, v. DELAWARE MINI-COMPUTER SYSTEMS, INC., et al., Appellees.

No. 05-82-01242-CV.

Court of Appeals of Texas,

Dallas.

Dec. 22, 1983.

Timothy E. Kelley, Dallas, for appellants.

Eric R. Cromartie, Hughes & Hill, Dallas, for appellees.

Before STOREY, SPARLING and GUILLOT, JJ.

STOREY, Justice.

Datafast Systems, Inc., the purchaser of computer hardware, sued Delaware Mini-Computer Systems, Inc., the seller, for breach of an express warranty, for breach of an implied warranty of merchantability, and for violation of the Deceptive Trade Practices Act. Summary judgment was granted in favor of Delaware based upon disclaimer and limitation of remedy provisions in its written contract. Datafast has appealed urging that the disclaimer and limitation of remedy provisions are unenforceable under the Texas Business & Commerce Code and the Deceptive Trade Practices Act. Additionally Datafast contends that a fact issue is raised with respect to its consequential damages. We affirm.

The contract between the parties, styled "Discount Agreement," is a typewritten sales contract to which two printed pages are attached. The typewritten contract provides that "All components are warranted for parts and labor for a period of sixty days." Immediately above the buyer's signature is typed, "All orders are subject to M.C.S. terms and conditions. Copy attached and made part of this agreement." One of the attached printed pages, styled "STANDARD TERMS AND CONDITIONS," contains, among others, two sections--one headed "SERVICE--WARRANTY" and one headed "LIMITATION OF LIABILITY--SOLE REMEDY." These sections, in bold type, provide for a sixty-day warranty limited to repair or replacement and expressly exclude all other warranties including those of merchantability and fitness for any particular purpose. They also provide that enforcement of the sixty-day warranty is the sole and exclusive remedy of the buyer and that the seller shall not be liable for any special, consequential, incidental, or other damages, including loss of profits.

Datafast contends that these contract provisions--the limitation of warranty, the disclaimer, and the limitation of remedy--are ineffective because they are not "conspicuous" as required by TEX.BUS. & COM.CODE ANN. § 2.316(b) (Vernon 1968). Section 1.201(10) defines "conspicuous" as:

A term or clause is conspicuous when it is so written that a reasonable person against whom it is to operate ought to have noticed it. A printed heading in capitals (as: Non-Negotiable Bill of Lading) is conspicuous. Language in the body of a form is "conspicuous" if it is in larger or other contrasting type or color. But in a telegram any stated term is "conspicuous." Whether a term or clause is "conspicuous" or not is for decision by the court.

TEX.BUS. & COM.CODE ANN. § 1.201(10) (Vernon 1968). Datafast argues that, because the disclaimer and limitation are on a separate page and the reference above the buyer's signature on the typewritten page is not in bold type, a fact question is raised. We cannot agree that these circumstances create a fact question because section 1.201(10) expressly makes the question of "conspicuousness" one "for decision by the court." It is therefore proper for the trial judge to decide the question on motion for summary judgment.

Additionally, because the contract is before us on appeal, this court may apply the standard set forth in section 1.201(10) and determine the question for itself. See Christopher v. Larson Ford Sales, 557 P.2d 1009 (Utah 1976). The standard is whether "a reasonable person against whom it is to operate ought to have noticed it." The rationale supporting the standard is that the law will look with disfavor upon semi-concealed or obscured self-protective provisions prepared by one party which the other is not likely to notice. With this standard and rationale at hand, it is appropriate also to consider other relevant circumstances. Here, the buyer was a business customer dealing at arms length and negotiating over a period of several months. Faye Ellmer, who acted on behalf of Datafast, testified by deposition that a copy of the "STANDARD TERMS AND CONDITIONS" was furnished to her, apart from the contract, several months before the contract was finally signed. These circumstances together with the reference paragraph immediately above Ellmer's signature on the contract, and the disclaimer in bold type on the attached page, lead us to the same conclusion reached by the trial court--that the disclaimer was called to Ellmer's attention. Christopher v. Larson Ford Sales, 557 P.2d at 1012. See also W.R. Weaver Co. v. Burroughs Corp., 580 S.W.2d 76 (Tex.Civ.App.--El Paso 1979, writ ref'd n.r.e.).

Datafast further contends on appeal that the limitation of remedy provision of the contract is...