Narrative Opinion Summary
In this case, Cypress alleged that Hynix breached several provisions of the CPA by failing to maintain adequate buffer inventory and a Disaster Recovery Plan. Hynix countered that Microsoft had waived these requirements and that capacity constraints rendered the obligations inapplicable. The court rejected Hynix's defenses, emphasizing that the CPA requires any waiver to be in writing and signed, and found no evidence supporting a waiver. Consequently, the court granted summary judgment to Cypress for Hynix's breaches. Additionally, Cypress claimed Hynix exceeded price limits and failed to meet delivery obligations, but the court ruled against Cypress, noting the Ninth Amendment's allowance for price adjustments through written agreements. Hynix's argument of commercial impracticability was challenged by Cypress, citing Hynix's allocation of resources to other clients. The court also addressed the limitation of liability clause in the CPA, finding it enforceable and precluding Cypress from recovering indirect damages, as the clause was neither unconscionable nor unreasonable in the commercial context. As a result, the court granted partial summary judgment in favor of both parties, upholding specific CPA provisions while denying other claims.
Legal Issues Addressed
Buffer Inventory Requirements under the CPAsubscribe to see similar legal issues
Application: The court found that Hynix breached the obligation to maintain a buffer inventory as required by the CPA, despite its claims of capacity constraints and waiver by conduct.
Reasoning: The CPA does not allow for the suspension of buffer inventory obligations during capacity constraints, and Paragraph 7 explicitly requires Hynix to establish this inventory before the first delivery.
Commercial Impracticability under Section 62A.2-615subscribe to see similar legal issues
Application: Hynix's claim of commercial impracticability due to unforeseen circumstances was disputed by Cypress, who pointed to Hynix's allocation of DRAM chips to other customers.
Reasoning: Hynix argues that any non-performance was commercially impractical due to unforeseen circumstances following the Wuxi fire, invoking Section 62A.2-615 of the Washington Revised Code.
Limitation of Liability in Contractual Agreementssubscribe to see similar legal issues
Application: The court upheld the limitation of liability clause, precluding Cypress from recovering indirect damages, finding no evidence of unconscionability in a commercial context.
Reasoning: The limitation of liability provision in the Agreement clearly disclaims liability for any incidental, consequential, punitive, special, or exemplary damages.
Obligation to Maintain a Disaster Recovery Plansubscribe to see similar legal issues
Application: Hynix breached the CPA by failing to maintain a written Disaster Recovery Plan, as required by Paragraph 12.1, without a written waiver from Microsoft.
Reasoning: The Court finds no evidence of a written waiver and determines that post-incident collaboration does not excuse the initial failure to maintain a disaster recovery plan.
Waiver of Contractual Provisionssubscribe to see similar legal issues
Application: The court ruled that any waiver of contractual provisions must be in writing and signed, as per the CPA, which Hynix failed to provide, leading to a breach finding.
Reasoning: The Court rejects Hynix's arguments, noting that the CPA mandates any waiver be in writing and signed, which Hynix failed to provide.