Narrative Opinion Summary
In this case, Contour Medical Technology, Inc., a manufacturer of medical devices, appealed a partial summary judgment dismissing its claim for consequential damages against Flexcon Company, Inc. The dispute arose from defective adhesive material supplied by Flexcon, intended for use in electrocardiogram testing patches. The Court of Appeals of Tennessee assessed whether the trial court correctly granted partial summary judgment, focusing on the enforceability of remedy limitations under TCA § 47-2-719. Flexcon's acknowledgment letter specified limitations on warranties and remedies, excluding consequential damages. The court affirmed the trial decision, holding that the remedy limitations were valid within the commercial context, as they were part of the agreement's 'circle of assent.' The court further ruled that the limitations were not unconscionable, given the buyer's ability to test the product and its awareness of previous defects. Consequently, the court upheld the limitation of liability to refund or repair, remanding the case for further proceedings. The appeal costs were assessed against Contour Medical Technology, Inc.
Legal Issues Addressed
Circle of Assent in Contract Termssubscribe to see similar legal issues
Application: The buyer's assent to the seller's terms was inferred from the clear language on the invoice, which stated limitations on liability and offered a prompt payment discount.
Reasoning: Terms in a contract must be part of the parties' agreement and fall within the 'circle of assent' as established in Parton v. Mark Pirtle Oldsmobile.
Conspicuousness Requirement for Warranty Disclaimerssubscribe to see similar legal issues
Application: The court found that the statute does not mandate conspicuousness for remedy limitations, contrasting with TCA § 47-2-316 related to warranty modifications.
Reasoning: The statute does not mandate conspicuousness for remedy limitations, contrasting with TCA § 47-2-316 related to warranty modifications.
Limitation of Remedies under TCA § 47-2-719subscribe to see similar legal issues
Application: The court upheld the seller's limitation of remedies as enforceable, allowing for a refund of the purchase price but excluding consequential damages.
Reasoning: Seller's liability is strictly limited to the repair or replacement of defective materials, the repayment of the purchase price upon return of materials, or a reasonable allowance for defects, excluding any general, consequential, or incidental damages.
Unconscionability of Contractual Limitationssubscribe to see similar legal issues
Application: The court determined that the limitation of liability was not unconscionable, as the defect was not latent and the buyer had prior issues with the product.
Reasoning: The plaintiff claimed the limited remedy was unconscionable due to a latent defect. However, the court noted that the alleged defect was not truly latent, as the plaintiff had prior issues with the product and could have conducted tests to identify defects.