Wednesday, December 18, 2013

National Controls, Inc. v. Commodore Business Machines, Inc. case brief

National Controls, Inc. v. Commodore Business Machines, Inc. case brief summary
209 Cal.Rptr. 636 (1985)

Appellant buyer sought review of the judgment from the Superior Court of Sonoma County (California), which awarded appellee seller damages in its breach of contract cause of action.

Appellant buyer contended that its purchase order was a prerequisite to consummation of the contract between itself and appellee seller and its provision that limited damages for a breach was a part of the contract.


  • The court held that the evidence established that the parties had reached agreement and entered into a contract of sale before the purchase order was sent. 
  • The court stated that the order was merely formal memoranda that embodied the terms agreed upon and added terms not discussed. 
  • The court stated that the terms not discussed were not part of the contract because the agreement was not subject to acceptance of the stated terms. 
  • The court held that the trial court did not err when it awarded appellee damages for the amount of lost profit even though appellee subsequently resold the goods. 
  • The court stated that appellee was a lost volume seller and that the usual contract price minus market price rule was inadequate to put appellee in as good a position as performance would have done, and that appellee was therefore entitled to its lost profits on the contract with appellant, without any setoff for profits on the resale.
Trial court's judgment was affirmed. The trial court properly determined that based on prior negotiating procedure between the parties that the provisions in appellant buyer's purchase agreement which was sent after the parties had reached an oral agreement did not become part of the contract but were merely proposals to the contract.

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