SFEG CORP v. Blendtec, Inc.
3:15-cv-00466
M.D. Tenn.Jan 30, 2017Background
- SFEG (Tennessee seller) manufactured motor components and brushes for Blendtec (Utah buyer); relationship began in 2011 and deteriorated by 2015, producing claims for breach, conversion, and counterclaims alleging defective parts.
- Parties exchanged ~32 purchase orders; SFEG sometimes sent order acknowledgments and its Terms & Conditions (T&Cs) with shipments; Blendtec never expressly accepted or objected to those T&Cs.
- Repeated testing, pilot runs, and production shipments occurred; recurring performance problems (locked-rotor failures, commutator/brush interactions) arose over years; both sides exchanged technical analyses and expert reports.
- SFEG stopped shipments in mid-February 2015 after partial performance on PO 3000763-3; SFEG seeks damages for unshipped assemblies, finance charges (in its T&Cs), and other items; Blendtec counters and moved to limit damages under a Supplier Agreement.
- Court analyzed applicability of UCC § 2-207 (battle of the forms), whether SFEG’s T&Cs became part of the contract by assent or course of dealing, warranty issues (express and implied), and contractual limits in the Supplier Agreement.
Issues
| Issue | Plaintiff's Argument (SFEG) | Defendant's Argument (Blendtec) | Held |
|---|---|---|---|
| Whether SFEG’s Terms & Conditions became part of the contract | Repeated orders and acceptance after receiving T&Cs created a course of dealing that incorporated SFEG’s T&Cs | Silence and continued performance do not constitute assent under UCC § 2‑207; no express assent | T&Cs are not part of the contract; silence/performance did not establish assent; §2‑207(3) applies to determine terms |
| Whether course of dealing can supply supplementary terms under §2‑207(3) | §2‑207(3) permits use of course of dealing/performance to supply terms; facts create a jury question | Even if course of dealing is considered, here there is no dealing about the warranty/limitation terms (no prior reliance or dealings on those specific terms) | Course of dealing may be considered generally, but facts do not show adoption of SFEG’s warranty/disclaimer terms; no fact issue to adopt T&Cs |
| Whether SFEG is entitled to summary judgment on Blendtec’s counterclaims (express & implied warranties) | Statements that parts would be “as good or better” than Ametek are at most puffery or limited to lab tests; UCC default rules bar claims | Statements can be express warranties given context, reliance, SFEG’s expertise, and repeated assurances; implied warranties may not be waived because defects were latent | SFEG’s motion denied; factual disputes (scope of representations, reliance, latent vs. patent defects, testing skipped) preclude summary judgment |
| Whether Blendtec’s Supplier Agreement limits SFEG’s damages for unshipped assemblies and related charges | Supplier Agreement may not apply to the blanket/Kanban PO; factual dispute about applicability and prior breach | Supplier Agreement was effective and limits Blendtec’s inventory liability per its terms | Court finds Supplier Agreement in effect as written; limits liability; grants Blendtec partial summary judgment (finance charges and tooling denied as T&Cs-based; unshipped inventory limited to agreed amount) |
Key Cases Cited
- Dorton v. Collins & Aikman Corp., 453 F.2d 1161 (6th Cir. 1972) (discusses UCC § 2‑207 and the battle of the forms)
- McJunkin Corp. v. Mechanicals, Inc., 888 F.2d 481 (6th Cir. 1989) (silence/performance insufficient for assent under §2‑207(1))
- Ralph Shrader, Inc. v. Diamond International Corp., 833 F.2d 1210 (6th Cir. 1987) (failure to object does not necessarily prove assent; jury question possible)
- Dresser Indus., Inc. v. Gradall Co., 965 F.2d 1442 (7th Cir. 1992) (§2‑207(3) permits use of course of dealing/performance to determine contract terms)
- Step–Saver Data Sys., Inc. v. Wyse Tech., 939 F.2d 91 (3d Cir. 1991) (repeated sending of forms alone does not establish course of dealing to import disputed terms)
- Diamond Fruit Growers, Inc. v. Krack Corp., 794 F.2d 1440 (9th Cir. 1986) (when acceptance is conditioned on assent to additional terms, offeror must specifically and unequivocally assent)