The brief
| Citation | 939 F.2d 91 (3d Cir. 1991) |
|---|---|
| Court and year | U.S. Court of Appeals for the Third Circuit, 1991 |
| Procedural posture | Step-Saver sued its software supplier, The Software Link (TSL), and its terminal supplier, Wyse, for breach of warranty after a multi-user system failed. The district court held that TSL's box-top license governed and directed a verdict for TSL. The Third Circuit reversed and remanded the warranty claims and affirmed in other respects. |
| Facts | Step-Saver assembled multi-user office systems with TSL's Multilink Advanced software and Wyse terminals. Software orders began by telephone. TSL agreed to ship, and the purchase orders and invoices recorded price, quantity, shipping and payment terms. Those forms contained no warranty disclaimers. The packages carried a different set of provisions: warranty disclaimers, remedy limits, a claimed complete agreement and language treating opening as acceptance, together with a refund offered for promptly returning an unopened package. Step-Saver objected to those restrictions. Separate proposed agreements containing similar terms were rejected. TSL continued selling anyway. The systems failed, and customers sued. Step-Saver then pursued warranty and misrepresentation claims against its suppliers. |
| Issue | Were the box-top license terms part of the parties' contract? |
| Rule | When the parties perform a sale but have not adopted a writing as their final agreement or modification, UCC 2-207 can govern disputed form terms. A later disclaimer materially altering agreed warranty protection requires assent. Repeatedly sending the same form does not by itself establish conduct adopting its disputed provisions. |
| Holding | The warranty disclaimer and remedy limit did not enter the bargain through the box license. The court remanded the express and implied warranty claims against TSL for further consideration and affirmed the other challenged rulings, including the result for Wyse. |
Reasoning
Performance established that a contract existed. The court did not need to fix its exact formation moment, because omitted warranty terms and sale-versus-license details did not make the bargain too indefinite and the UCC could supply missing terms. A later integration clause required mutual adoption. Printing it on one party's form did not settle the question.
Conditional acceptance required more than announcing preferred terms. TSL continued sales after Step-Saver refused separate agreements, and both parties proceeded with resale despite the license's nontransferability language, conduct that undermined a claim that TSL would not do business without assent to every restriction. The refund offer did not change that conclusion on this record.
Repeated delivery showed what TSL wanted. Mutual agreement was a different issue. Assuming the alleged warranties belonged to the original bargain, a later disclaimer and remedy limit would materially reallocate its risk; repeatedly enclosing that form did not establish that Step-Saver had accepted the change. The warranties themselves still required proof. The remand also left other possible grounds for excluding them open.
Misrepresentation required evidence of knowing falsity. Testimony that compatibility was imperfect in theory did not establish deception about practical compatibility, so the separate misrepresentation theory failed even though the box-license ruling could not stand.
Wyse faced a different evidentiary problem. Its terminal met the industry standard, and the evidence did not establish unfitness for ordinary use simply by showing that it failed to work with this software. The merchantability result for Wyse remained intact.
Why it is assigned
Separate the existence of a contract, adoption of a form, and proof of a warranty. This record also distinguishes conduct applying a disputed provision from a seller merely mailing that provision repeatedly.
What the remand did not establish
The decision concerns a commercial supplier-reseller relationship under the relevant Pennsylvania and Georgia UCC provisions. It did not decide that every refund provision fails to make an acceptance conditional, resolve the sale-versus-license label, or adjudicate all consumer software licenses. ProCD later distinguished the formation sequence and forms before it.
Two changed-facts hypotheticals
The buyer expressly agrees before ordering that a particular disclosed warranty disclaimer governs.
Show the analysis
That changes the absence of assent central to Step-Saver. Determine the actual agreed language and any statutory requirements for a disclaimer rather than treating a later box as the only source of the term.
The seller sends the same disclaimer in ten additional packages, but neither side acts on the disclaimer and the buyer never agrees.
Show the analysis
More mailings alone do not establish the course of dealing rejected here. Look for agreement or conduct concerning that provision. Knowledge that the seller wants a term differs from adopting it.
Quick answers
Did Step-Saver win its warranty damages on appeal?
No. It obtained further consideration of its TSL warranty claims after the box-license ruling was reversed. The existence and scope of the alleged warranties still required examination.
Excluding a term and proving the warranty claim
After Step-Saver excludes TSL's box-top disclaimer and remedy limit, which conclusion follows about the buyer's warranty case?
Answer and explanations
Correct answer: D.
Authority: Step-Saver opinion: disputed terms, remand and separate claims
- A. Rejecting a form's exclusion does not establish which warranties applied or every element of the buyer's claim. The court remanded those questions instead of awarding the requested warranty recovery.
- B. Performance established that a contract existed, so the court found no need to settle its exact formation moment. The telephone-order facts did not become a ruling fixing that moment for every sale.
- C. The other challenged results stood. Proof of knowing falsity failed for the misrepresentation theory, while the terminal evidence did not establish unfitness for ordinary use. The box-license ruling did not decide those distinct questions for the buyer.
- D. The material-alteration analysis assumed the alleged warranties belonged to the original bargain. That assumption was not a final finding that every warranty existed or survived other objections. The remand preserved further examination of the express and implied warranty claims.