– Plaintiff’s argument – Step contract for each copy of the program was formed when TSL agreed on the phone to ship at agreed price.
- The additional terms of the “license” was of a material effect to the contract which did not become part of the contract.
- Several representations made by TSL constitute express warranty and also show that valid implied warranties were upheld.
- District court did not consider whether other factors may act to exclude these warranties- it is simply a fact finding issue.
– Defendant’s argument
- Express language of the box-top license “opening product indicates your acceptance.
- TSL’s acceptance was conditioned on the step-savers assent to the terms of box-top licensing – also allowed return of product w/in 15 days.
- Placed orders with notice of the “box-top license” repeated expression of those terms eventually incorporate them w/in the contract.
- Rejected this notion of continuous business results in adopting the contracts terms.
- Printed on the package of each copy program was “box top license agreement.”
- Step would contact TSL over phone and place an order.
- TSL would accept offer over the phone.
- After telephone order, TSL would send purchase order detailing the items purchased, price, quantity and shipping payments – no references were made during the phone calls with regard to the disclaimer.
- Has not purchased the soft-ware but obtained a non-transferable license to use the program.
- Disclaims all expressed and implied warranties – except warranty that the disks contained in the box are free from defects.
- Opening the package indicates your acceptance of these terms and conditions – if you do not agree, return un-opened package in 15 days.
- Due to defects of the product, Step brought breaches of warranty seeking indemnity from costs in resolving customers’ suits.
– District court stated that “the limited use license agreement” printed on the package governed the purchase of the package, therefore sided with Wyse (TSL)…
– Court of appeals disagrees and remands the case based upon further fact finding.
– Did the writing constitute additional acceptance on behalf of TSL? Did TSL expressly state that they would not proceed unless additional terms were incorporated into the party’s agreement?
– If additional terms are “proposed” after the original agreement they are merely written confirmations containing additional terms that must be accepted, then they would materially alter the deal between the two parties making them not binding unless agreed upon.
– The box top licensing did not constitute a conditional acceptance by merely opening the package.
- It did not explicitly state that it would not do business if they did not accept the new terms.
– Did not show acceptance of the agreement merely by the repetition of deals made.
– Parties appeared to not incorporate disclaimer in there agreement.
- TSL tried to obtain steps express consent to the disclaimer and limitation of damages- Step refused to sign this disclaimer.
- When first notified of the problem, TSL spent a lot of time trying to “fix it”.
– Box top agreement should have been treated as a written confirmation containing additional terms.
- Warranty disclaimer and limitation of remedies terms would materially alter the parties agreement, these terms did not become part of the parties agreements.
– Remand for further considerations the express and implied warranty claims against TSL.