On Appeal from the United States District Court for the Western District of Pennsylvania (D.C. No. 91-cv-02162)
BEFORE: SCIRICA and COWEN, Circuit Judges and POLLAK, District Judge *fn1
Opinion Filed: December 24, 1996; Vacated March 14, 1997
Petition for Panel Rehearing Granted
Submitted: March 14, 1997
OPINION ON PANEL REHEARING
This appeal requires us to determine whether a limitation of damages provision, contained in a proposed, but never accepted, written agreement between a purchaser and a distributor, will preclude the purchaser from seeking damages against the manufacturer of a product sold to the purchaser by the distributor. We conclude that because the proposed agreement between the distributor and the purchaser was never accepted by the distributor, and, therefore, never went into force, the manufacturer is not protected by the limitation of damages provisions contained in the proposed agreement. We decline to review the jury's finding of liability and partial damages against Chelgraph because Chelgraph filed no cross appeal claiming error in these findings. Accordingly, we will remand for a new trial solely on the issue of any additional damages InfoComp may have suffered by reason of the liability of Chelgraph for selling a product that the jury found to be defective.
Appellant, InfoComp ("InfoComp" or "the purchaser"), seeks damages arising from its purchase of an allegedly defective computer imagesetting system manufactured by Appellee, Chelgraph Ltd. ("Chelgraph" or "the manufacturer"). InfoComp purchased the product from a Chelgraph distributor, Electra Products, Inc. ("Electra" or "the distributor"). *fn2 Chelgraph manufactures various types of advanced printing and compugraphic equipment. Electra was an independent distributor of Chelgraph products. InfoComp provided graphic design and printing services to clients.
InfoComp periodically purchased equipment to enable the company to take advantage of technological advances in its industry. After considerable research, InfoComp's president and owner, Timothy P. Hornish, informed Kevin P. Mahony, national sales manager for Electra, that InfoComp would purchase the Chelgraph IBX-2000 imagesetting system. Thereafter, Mahony faxed InfoComp pre-printed forms and two letters, which set forth prices, payment schedules and delivery terms. Electra's name, address, and logo appeared on the front of the forms, and the first numbered paragraph defined the term "Electra" as referring only to Electra. Nowhere in the forms was Chelgraph mentioned or even identified. The reverse side of the forms contained the following language:
This Purchase Agreement shall not be deemed accepted by Electra unless and until an authorized officer or manager of Electra has signed the Purchase Agreement. No other act or writing by an agent, officer, or manager of Electra shall cause this Purchase Agreement to be a valid, effective or binding contract on Electra.
App. at 1836. Under the heading "Installation and Service," the following limitation of damages provision was also contained in the forms:
Electra shall not be liable for any special, incidental, resulting, or consequential damages (whether caused by or resulting from Electra's negligence or breach) directly or indirectly arising from the use, inability to use, attempted use, failure to deliver or delay in delivery of, or from a defect in, or a breach by or failure to conform of the Equipment, or any repair or replacement parts thereof, ordered from Electra for use in conjunction therewith, or from any other cause whatsoever. Id.
The forms also contained an integration clause stating that the proposed written agreement constituted the complete understanding between the parties and that no representations or ...