Friday, October 5, 2012

Gardner Zemke Co. v. Dunham Bush, Inc. case brief

Gardner Zemke Co. v. Dunham Bush, Inc.
115 N.M. 260

Case Synopsis:
The appellant, a general contractor, brought suit against appellee air-conditioner manufacturer for breach of a contract to provide equipment and failure to provide warranty service. The District Court of Bernalillo County (New Mexico) entered judgment for the manufacturer. The contractor appealed.

-The contractor issued its order to the manufacturer for air-conditioning chillers.
-The manufacturer responded with its pre-printed acknowledgment containing extensive warranty disclaimers and a provision deeming silence to be acquiescence to the terms of the acknowledgment. -Without discussion of the discrepancies, the parties proceeded with the transaction.
-When the contractor sought warranty repairs, the manufacturer agreed to repair only upon assurance that it would be paid if the problems were not caused by manufacturing defects. The contractor refused and a third party was hired to repair the chillers. The contractor then filed suit against the manufacturer.

-The court held that the trial court erred in ruling that the manufacturer’s acknowledgment was a counteroffer by not considering all of the relevant factors to that determination and remanded the case for reconsideration.
-The court determined that if the trial court found that the acknowledgment was in fact an acceptance, then the conflicting contract terms would not become part of the contract and article 2 of the Uniform Commercial Code, N. M. Stat. Ann. §§ 55-2-101 to -2-725, would supply the missing terms.

-Where clauses on confirming forms sent by both parties conflict, each party must be assumed to object to a clause of the other conflicting with one on the confirmation sent by himself.
-As a result the requirement that there be notice of objection is satisfied and the conflicting terms do not become a part of the contract. The contract then consists of the terms originally expressly agreed to, terms on which the confirmations agree, and terms supplied by the Uniform Commercial Code article 2.

-On its face, N.M. Stat. Ann. § 2-207(1) provides that a document responding to an offer and purporting to be an acceptance will be an acceptance, despite the presence of additional and different terms.
-Where merchants exchange pre-printed forms and the essential contract terms agree, a contract is formed under § 2-207(1). A responding document will fall outside of the provisions of § 2-207(1) and convey a counteroffer, only when its terms differ radically from the offer, or when acceptance is expressly made conditional on assent to the additional or different terms.

-The court reversed the judgment for the manufacturer and remanded the case for the trial court’s reconsideration.

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