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WHEATON GLASS CO. v. PHARMEX

October 15, 1982

WHEATON GLASS COMPANY, a Division Of WHEATON INDUSTRIES, a New Jersey Corporation, Plaintiff,
v.
PHARMEX, INC., doing business as PHARMEX, LTD., a Delaware Corporation, Defendant, and PHARMEX, INC., doing business as PHARMEX, LTD., a Delaware Corporation, Plaintiff, v. POLY-SEAL CORPORATION, Defendant



The opinion of the court was delivered by: COHEN

 This matter is presently before the Court on the motion of plaintiff, Wheaton Glass Company (Wheaton), for partial summary judgment, pursuant to Fed. R. Civ. P. 56, and on the motion of defendant, Poly-Seal Corporation (Poly-Seal), to dismiss the complaint brought against it for lack of subject matter jurisdiction, pursuant to Fed. R. Civ. P. 12(b).

 FACTS

 Between September 1976 and December 1979, Wheaton sold to Pharmex, Inc. (Pharmex) over two million glass bottles. Negotiations between Wheaton and Pharmex regarding purchase of the bottles began in July of 1976. On September 13, 1976, Wheaton received Pharmex's purchase order (P.O. 6758) for 216,000 bottles and on September 29, 1976, Wheaton shipped 50,400 bottles to Pharmex. At the same time, or shortly thereafter, Wheaton sent to Pharmex an "Order-Billing" form covering the 50,400 bottles that were shipped. *fn1"

 Wheaton instituted this action on April 22, 1980 to secure payment from Pharmex for a certain number of the bottles shipped. Pharmex then filed a counterclaim against Wheaton for consequential damages alleging that the bottles were defective and that the defect caused leakage of Pharmex's product from the bottles. Thereafter, Pharmex allegedly discovered that the caps put on the bottles may have also contributed to the leakage and brought an action against Poly-Seal Corporation, the cap manufacturer, for damage which was caused by these allegedly defective caps. The two actions were subsequently consolidated for the purposes of trial and pretrial discovery.

 The issue presented to the Court by the instant motion is whether the clause on the reverse side of Wheaton's "Order-Billing" forms, *fn2" which purports to limit Pharmex's right to sue for consequential damages, became a part of the contract *fn3" between the parties. Pharmex maintains that this condition is not part of the contract between the parties and that the contract's terms are those set forth in Pharmex's purchase orders and those supplied by the Uniform Commercial Code. Wheaton counters that the contract of sale was modified by certain terms provided in its "Order-Billing" form, including the limitation of damages provision.

 The transactions involved in the present matter are governed by Article II of the Uniform Commercial Code, N.J. Stat. Ann. § 12A:2-201 (West 1962) et seq. The formation of a contract is addressed by § 2-206 which provides in pertinent part:

 
(1) Unless otherwise unambiguously indicated by the language or circumstances
 
(a) an offer to make a contract shall be construed as inviting acceptance in any manner and by any medium reasonable in the circumstances;
 
(b) an order or other offer to buy goods for prompt or current shipment shall be construed as inviting acceptance either by a prompt promise to ship or by the prompt or current shipment of conforming or non-conforming goods . . . .

 In the instant case, Pharmex's offer to buy goods was in the form of a purchase order. Pursuant to subsection 2-206(b), set forth above, this offer invited acceptance either by a "promise to ship" or by the "current shipment" of the goods. It is not clear from the record before this Court whether Wheaton ever promised delivery of the goods or whether it simply shipped the goods to Pharmex. In either case, acceptance occurred before Pharmex received Wheaton's "Order-Billing" form containing the limitation of damages clause. *fn4"

 Hence, the contract contained the terms included in Pharmex's purchase orders. In addition, certain terms which were not included in the orders were supplied by reference to the U.C.C. See § 2-207(3); Comment, § 2-207 of the Uniform Commercial Code, New Rules for the "Battle of the Forms, " 32 Univ. Pitt. L. Rev. 209, 217 (1970). Among the terms supplied by the U.C.C. is the provision allowing the buyer to sue for consequential damages pursuant to § 2-715. Air Products Chem. Inc. v. Fairbanks Morse, 58 Wis.2d 193, 212, 206 N.W. 2d 414, 424 (Sup. Ct. 1973). Therefore, Pharmex's claim for consequential damages is permitted under the terms of the contract in question.

 Assuming arguendo, that Wheaton sent the "Order-Billing" forms with each shipment and that it intended said "Order-Billing" forms to constitute its acceptance, it is still possible that the clause eliminating Pharmex's right to sue for consequential damages was not included in the contract. Section 2-207(2) provides that when an acceptance states terms additional to, or different from, those in the offer, a contract has been formed in which "the additional terms are to be construed as proposals for additions to the contract." According to this subsection, "between merchants such terms become part of the contract unless . . . they materially alter it . . . ." § 2-207(2). "If [the additional terms] are such as materially to alter the original bargain, they will not be included unless expressly agreed to by the other party." § 2-207, U.C.C. ...


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