Farris Engineering Corp. v. Service Bureau Corp.
| Decision Date | 22 January 1969 |
| Docket Number | No. 17137.,17137. |
| Citation | 406 F.2d 519 |
| Parties | FARRIS ENGINEERING CORPORATION, Appellant, v. The SERVICE BUREAU CORPORATION. |
| Court | U.S. Court of Appeals — Third Circuit |
William S. Katchen, Ravin & Ravin, Newark, N. J., for appellant.
Thomas F. Campion, Shanley & Fisher, Newark, N. J., (Frederick B. Lacey, Gerald W. Hull, Jr., Newark, N. J., on the brief), for appellee.
Before HASTIE, Chief Judge, and KALODNER and VAN DUSEN, Circuit Judges.
The plaintiff, Farris Engineering Corporation, has appealed from a judgment dismissing its complaint upon a motion of the defendant, The Service Bureau Corporation, for a summary judgment.
The complaint sought damages arising out of a breach of a contract for data processing services to be rendered by the defendant. The contract contained two paragraphs which are of importance here. One explicitly limited the liability of the supplier of data processing services to the amount paid by the customer for the services. The other provided that "this agreement shall be governed by the laws of New York."
The appellant makes a threshold claim that the contract is governed by New Jersey law. Approaching this issue, we observe that the present action is cognizable in federal court solely because of diversity of citizenship. Accordingly, New Jersey choice of law rules are controlling in this litigation as instituted in the United States District Court for the District of New Jersey. Klaxon Co. v. Stentor Electric Mfg. Co., 1941, 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477. As we have recognized in Specialties Development Corp. v. C-O-Two Fire Equipment Co., 3d Cir., 1953, 207 F.2d 753, New Jersey normally refers to the law of the place of contracting to determine the validity of a contractual provision. James H. Rhodes & Co. v. Chausovsky, 1948, 137 N.J.L. 459, 60 A.2d 623. In this case New York was the place of contracting, since the expression of mutual assent to the bargain was completed by the defendant's signing of the contract in New York. Cf. Filson v. Bell Telephone Laboratories Inc., 1964, 82 N.J.Super. 185, 197 A.2d 196. Moreover, the appropriateness of this normal reference to New York as the place of contracting is reinforced here by the contractual provision that "this agreement shall be governed by the laws of New York". The New Jersey courts seem disposed to give effect to such a provision where the law chosen by the parties is that of a state to which the transaction is significantly related....
To continue reading
Request your trial
-
Solari Industries, Inc. v. Malady
...than New Jersey law. See Award Incentives, Inc. v. Van Rooyen, 263 F.2d 173, 177 (3 Cir. 1959); Farris Engineering Corp. v. Service Bureau Corp., 406 F.2d 519, 520--521 (3 Cir. 1969); Colozzi v. Bevko, Inc., 17 N.J. 194, 202, 110 A.2d 545 (1955); Naylor v. Conroy, 46 N.J.Super. 387, 391, 13......
-
Clements Auto Company v. Service Bureau Corporation
...the damages which can be awarded here. Such contract provisions appear to be valid under New York law. Farris Engineering Corp v. Service Bureau Corp., 406 F.2d 519 (3rd Cir. 1969). There is also authority for the proposition that contract provisions may operate to limit liability in suits ......
-
Kronovet v. Lipchin
...1979) (contract not usurious under law chosen by the parties) (applying California conflict principles); Farris Engineering Corp. v. Service Bureau Corp., 406 F.2d 519 (3d Cir. 1969) (validity of clause limiting liability) (New Jersey choice of law); Blalock v. Perfect Subscription Co., 458......
-
Doyle v. Northrop Corp.
...of the place of contracting is the one used to determine its validity. Colozzi v. Bevko, supra. See also Farris Engineering Corp. v. Service Bureau Corp., 406 F.2d 519 (3d Cir. 1969); Congress Factors v. Malden Mills Inc., 332 F.Supp. 1384 (D.N.J.1971). This case presents a somewhat differe......
-
Who pays the price of computer software failure?
...particularly that the contract was not a contract negotiated at arm's length); see also Farris Eng'g Corp. v. Service Bureau Corp., 406 F.2d 519 (3d Cir. 1969) (enforcing a contractual limit on liability); Fireman's Fund Am. Ins. Co. v. Bums Elec. Sec. Serv., Inc., 417 N.E.2d 131 (Ill. App.......