Ionics, Inc. v. Elmwood Sensors, Inc.
United States Court of Appeals for the First Circuit
110 F.3d 184 (1997)
Ionics, Inc. (Ionics) (plaintiff) manufactures water dispensers. On several occasions, Ionics purchased thermostats from Elmwood Sensors, Inc. (Elmwood) (defendant) to place in the water dispensers. After each purchase, Ionics sent Elmwood a purchase order describing the remedies available to Ionics in the event of breach, as well as a statement that unless Elmwood objected to these terms in writing, the terms would become part of the contract. After receiving each purchase order, Elmwood sent Ionics an “acknowledgement” saying that it rejected any additional terms proposed by Ionics. Additionally, Elmwood limited its liability for damages resulting from use of its thermostats. Elmwood stated that this language constituted a “counteroffer” that would be deemed to have been accepted by Ionics unless rejected in writing within 10 days. Several of Elmwood’s thermostats placed in Ionics’ water dispensers malfunctioned and caught fire, causing damage to Ionics’ customers. Ionics brought suit in federal district court against Elmwood. Elmwood argued that Ionics accepted its “counteroffer” limiting Elmwood’s liability for damages. Elmwood moved for partial summary judgment. The trial court denied Elmwood’s motion for partial summary judgment, and Elmwood appealed.
Rule of Law
Holding and Reasoning (Torruella, C.J.)