South Carolina Electric and Gas Co. v. Combustion Engineering, Inc.

South Carolina Electric and Gas Co. (SCE & G) (plaintiff) entered into a contract with Combustion Engineering, Inc. (Combustion) (defendant) to purchase a boiler unit and ancillary equipment manufactured by Combustion. This contract contained a warranty section which provided for a one-year express warranty and a disclaimer clause excluding any other warranties, whether express or implied (except for warranty of title). Over a year after the boiler and equipment became operational in SCE & G's power generating plant, a flexible metal hose ruptured causing a fire that damaged SCE & G's plant. SCE & G brought claims against Combustion, including breach of the implied warranties of merchantability and of fitness for a particular purpose. Combustion moved for summary judgment and requested dismissal of the warranty causes of action. Combustion submitted various documents regarding the parties' seven-month negotiation of the implied warranties and the disclaimer clause. SCE & G claimed that the disclaimer clause did not comply with the statutory requirements regarding wording and location of a disclaimer in a contract. Combustion contended that its documentation showed that the disclaimer fell within a statutory exception to these requirements because the circumstances surrounding the parties’ negotiations were sufficient to alert the buyer that no implied warranties were made. The trial court granted summary judgment and SCE & G appealed.