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Sierra Diesel Injection Service, Inc. v. Burroughs Corporation

United States Court of Appeals for the Ninth Circuit
874 F.2d 653 (1989)


Sierra Diesel Injection Service, Inc. (Sierra) (plaintiff) was a family-operated servicer of diesel engines. Sierra was interested in purchasing a posting machine to help with invoicing and bookkeeping. Sierra contacted Burroughs Corporation (Burroughs) (defendant). Burroughs advised Sierra to purchase a B-80 computer rather than a posting machine. Sierra’s owner, James Cathey, was not familiar with computers or contracts, let alone accounting software or bookkeeping devices. Relying on the advice from Burroughs, Cathey signed a sales contract buying the B-80 for Sierra. The contract contained language in all capital letters disclaiming all warranties, including the implied warranty of merchantability and the implied warranty of fitness for a particular purpose. The disclaimer language appeared on the back of the contracts, and only some of the language was in bold lettering. Sierra soon discovered the B-80 was incapable of performing bookkeeping functions. Sierra had to purchase a new computer from a different company. Sierra sued Burroughs for breach of warranty. Burroughs argued that all warranties were disclaimed by the contract. The district court held that the disclaimer provision was not conspicuous, and that the warranties were not excluded. Burroughs appealed.

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