C9 Ventures v. SVC-West, L.P.
136 Cal. Rptr. 3d 550
Cal. Ct. App.2012Background
- On July 3, 2007, SVC ordered eight helium tanks from C9 by telephone; an oral contract for the lease of tanks was formed.
- C9 delivered the tanks with a standard invoice that bore an indemnity provision on the back but was unsigned by SVC.
- A child was injured by a tank; both parties later settled the resulting suit with payments from each side.
- C9 filed a cross-claim seeking indemnity under the back-of-invoice provision; the trial court granted judgment for C9 and attorney fees.
- The trial court relied on California U.C.C. § 2-207 to find the indemnity term binding; the court awarded fees to C9.
- The court of appeal held the oral contract was a lease under division 10, § 10201, the indemnity term did not become part of the contract, and reversed the judgment and fee award, remanding for SVC’s favor.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the back-of-invoice indemnity term became part of the oral contract under §2-207. | SVC contends the unsigned invoice cannot bind; §2-207 allows additional terms. | C9 argues the term could attach via course of dealing under §2-207. | Indemnity term did not bind; §2-207 does not apply to a lease. |
| Whether the contract was a lease under division 10 or a sale under division 2. | The transaction resembles a sale of goods. | The predominant purpose was leasing tanks; division 10 applies. | The oral contract was a lease governed by division 10. |
| Whether the unsigned invoice terms were incorporated by course of performance or dealing. | Past invoicing with indemnity language created a common understanding. | No assent shown; unsigned invoice cannot alter terms. | No incorporation via course of performance or dealing. |
| Whether payment of the invoice constituted assent to the indemnity terms. | Payment indicated acceptance of the contract. | Payment was performance of the existing contract, not assent to new terms. | Payment did not constitute assent to added terms. |
| Whether the indemnity term would have been a material alteration under §2-207 even if the contract were sale. | Indemnity shifts risk and is not minor. | If §2-207 applied, term would be disfavored unless not a material alteration. | Indemnity term materially altered the contract, thus would not become part under §2-207. |
Key Cases Cited
- CFLC, Inc. v. CFLC, 166 F.3d 1012 (9th Cir. 1999) (course of dealing insufficient to bind on unsigned form when terms not assented to)
- Chateau des Charmes Wines Ltd. v. Sabate USA Inc., 328 F.3d 528 (9th Cir. 2003) (invoice terms do not bind absent assent; payment alone not assent)
- Marin Storage & Trucking, Inc. v. Benco Contracting & Engineering, Inc., 89 Cal.App.4th 1042 (Cal. App. 2001) (signed form required for enforceability; unsigned invoices generally not contracts)
- Trans-Aire International, Inc. v. Northern Adhesive Co., 882 F.2d 1254 (7th Cir. 1989) (indemnity clause treated as material alteration; not binding without assent)
- Union Carbide Corp. v. Oscar Mayer Foods Corp., 947 F.2d 1333 (7th Cir. 1991) (courts discuss whether course of dealing allows assent to added terms)
- Step-Saver Data Systems, Inc. v. Wyse Technology, 939 F.2d 91 (3d Cir. 1991) (courts recognize that mere sending of forms does not constitute assent to added terms)