Marvin Lumber and Cedar Co. v. PPG Industries, Inc.

Marvin Lumber and Cedar Co. (Marvin) (plaintiff) manufactured wooden doors and windows. PPG Industries (PPG) (defendant) sold wood preservatives and coating. For many years, Marvin had successfully been using the industry-standard preservative. PPG created a new preservative, which replaced the industry-standard. Marvin thus began using PPG’s preservative. PPG sent Marvin acknowledgments of Marvin’s purchase orders. On the face of the acknowledgment, PPG stated that it accepted Marvin’s orders with the understanding that the only terms to which it consented were set forth in the acknowledgement. There was a signature line directly below this statement, but it was unsigned. The back of the acknowledgment, in fine print, stated that PPG’s liability for damages would not exceed Marvin’s purchase price. Marvin filed suit several years after purchasing PPG’s preservative, claiming that the preservative had failed to prevent premature rot and decay in Marvin’s wood products. At trial, the jury found that PPG had given Marvin a warranty of future performance and that the warranty was incorporated into their agreement. The jury also found that the warranty was breached and awarded Marvin a large sum for out-of-pocket costs, past lost profits, future lost profits, and loss of goodwill. The trial court entered a judgment of over $156 million for Marvin. PPG appealed, arguing that the term in the contract limiting damages controlled. According to PPG, Marvin could collect damages only for the price it paid for the preservative—$1.6 million. Marvin argued that the damages limitation was a material alteration to the contract for purchase and sale. Marvin officials testified that they were surprised that such a limitation could have become part of the contract. The appeal was heard by the United States Court of Appeals for the Eighth Circuit.