In this diversity suit, Dresser Industries, Inc. (“Dresser”) sued the Gradall Company (“Gradall”) for breach of both oral and written contracts. A jury awarded Dresser damages of $582,000 and interest. Gradall appeals, alleging that the district court erred in denying its motion for summary judgment. Gradall also challenges the court’s denial of its motion for a new trial or remittitur, its interpretation of Wisconsin’s version of the Uniform Commercial Code, and its jury instructions. We affirm.
I. BACKGROUND
A. Facts
Beginning in 1982, Gradall manufactured and sold a small 4-wheel drive vehicle known as the 534B, primarily used in construction where its maneuverability makes it ideal for delivering materials to workers on a construction site. The 534B requires a 4-cylinder, turbo-chаrged diesel engine. Dresser made such an engine, called the VRD220S. From 1982 to 1985 Gradall bought VRD220S engines from Dresser for use in the 534B. When it ordered engines, Gradall mailed Dresser a purchase order, containing its (Gradall’s) terms as to price, delivery date and location, quantity, and warranty coverage. The purchase orders stated that acceptance of the order would constitute an acceptance of all of Gradall’s terms. Dresser then responded with an order acknowledgement which stated that it would accept Gradall’s offer, but only on the condition that its (Dresser’s) terms, as set forth in the order acknowledgemеnt, would govern the transaction. Needless to say, Gradall’s and Dresser’s terms were quite different, especially as to the warranties applicable to Dresser’s engines. Dresser’s form disclaimed all implied warranties and limited its express warranty to one year, whereas Gradall’s form included all implied warranties and called for a fifteen-month express warranty. Without attempting to resolve this discrepancy or decide whose warranty terms controlled, the parties acted as if a contract had been formed with Dresser shipping the engines and Gradall paying for them.
Beginning in 1983, many of Gradall’s customers had problems with the Dressеr engine in the 534B. Gradall referred the customers to Dresser’s service centers, but the number of problems continued to increase and the service centers could not keep up with the requests for repair work. Finally, on April 18, 1985, company executives met to discuss possible solutions to the problems with the 534B and its engine. They agreed to a program known as the *1445 “85-2 campaign.” In this campaign, Gra-dall would repair problems unrelated to the engine, while Dresser would perform some engine work and sell Gradall new oil pump kits to replace faulty ones. The parties failed to agree on all the terms of the campаign, however. Dresser blamed Gra-dall for this failure, and, in hopes of forcing Gradall to agree to its terms, stopped delivering the oil pump kits. As a result, Gradall did not have the necessary parts to repair the engines in the field as originally contemplated under the campaign. By late 1985 Gradall decided that the 85-2 campaign was a failure, and that the only solution to the problem was to abandon the campaign and replace the Dresser engines with another company’s engines, which it did.
B. Proceedings in the District Court
Dresser sued Gradall, seeking payment of an outstanding balance for engine parts sold and delivered and a declaratory judgment as to the parties’ contractual rights. Gradall answered with affirmative defenses and counterclaims. Its main affirmative defense was that Dresser’s engines were defective from the start and that Dresser knew of these defects. Its counterclaims related to these allegedly defective engines, charging breach of express warranty, breach of the implied warranties of fitness and merchantability, breach of contract, negligence, both negligent and intentional misrepresentation, strict liability, and a right to punitive damages.
Dresser then filed a motion for summary judgment. For our purposes, the primary issue raised in this motion was whose warranty covered the engines. Dresser argued that its warranty applied, because Gradall passed it along to its customers and directed them to Dresser for engine repairs. Gradall countered that it had not adopted Dresser’s warranty, and that because the parties’ terms and written forms were in conflict, the contract was formed through their course of conduct, and the implied warranties of the Uniform Commercial Code (“U.C.C.”) should govern. Wis.Stat. §§ 402.314
&
402.315. The court denied summary judgment on this issue, finding that issues of fact remained as to whether Gradall adopted Dresser’s warranty. Consequently, the jury would have to decide the issue by examining the parties’ course of performance, course of dealing, and the custom and usage in the trade.
Dresser Industries, Inc., Waukesha Engine Division v. The Gradall Company,
Dresser added a count to its complaint, claiming that Gradall breached the oral contract between the parties to carry out the 85-2 campaign. Gradall denied that there was an oral contract. It contended that the pаrties agreed to conduct simultaneous campaigns, but that Dresser’s failure to ship the necessary parts made that impossible. As a result, it was forced to abandon the campaign and seek another way to satisfy its customers — namely, by replacing Dresser’s engines with those of a competitor.
After trial, the jury held (1) that Gradall owed Dresser $113,154.12 plus interest for engine parts Dresser sold and delivered to it, (2) that Dresser substantially performed the oral agreement and that Gradall breached it, making Gradall liable for $582,000 plus interest, and (3) that Gra-dall’s counterclaims were meritless. The district court denied Gradall’s motions for a new trial, judgment notwithstаnding the verdict, and remittitur.
II. ISSUES
Gradall raises three issues on appeal. First, it challenges the sufficiency of the evidence supporting the jury’s $582,000 verdict. In the alternative, Gradall contends the verdict was so excessive in relation to the evidence that it must have been the product of passion and prejudice. Second, Gradall argues that the trial court improperly allowed the jury to consider the course of performance, course of dealing, *1446 and usage of trade to decide whether Gra-dall accepted Dresser’s warranty. Gradall argues that once the court found that the parties documents had not formed a contract, § 2-207(3) dictates that neither party’s warranty controls, and that missing terms of the contract are supplied by the U.C.C.’s gap-filling provisions. Finally, Gradall asserts that the jury instructions give the misleading impression that Gradall had the burden of proving that Dresser did not substantially perform the alleged oral contract.
III. DISCUSSION
A. Damages
Gradall’s first claim is that the $582,000 damage award was excessive. In diversity cases, we apply the federal standard to determine whether a jury verdict is excessive, though our determination is guided by state standards where precedent exists.
Pincus v. Pabst Brewing Co.,
Dresser sought damages for lost profits and harm to its reputation caused by Gra-dall’s decision to replace its engines. Gra-dall contends that the evidence of lost profits, at best, could support an award of $261,000, because that is the only evidence of loss and is the amount Dresser’s attorney asked for at closing argument. It argues that there is no rational connection between this evidence and the jury’s award of $582,000. Further, Gradall argues that the “extra” $321,000 cannot be upheld as compensation to Dresser for damage to its business reputation because the evidence on this point was minimal and vague. In addition, Gradall argues that reputation damages are not available in contract cases. Finally, Gradall contends that the award was so large that it must have been the result of the jury’s passion and prejudice, necessitating a new trial on the merits. We address each argument separately.
1. Lost Profits
Dresser's main contention with regard to the oral contract was that Gradall’s breach caused it to lose future profits, which would have derived from the sale of spare parts and repairs to the engines after the expiration of the warranty period. Testimony on this point came from Richard Davis, Dresser’s Director of Service Operations.
Q: From your experience can you tell me how much money Waukesha [Dresser] makes per engine per year for parts sales on VRD220S engines?
A: Each engine would consume approximately $1,000 worth of spare parts annually.
Q: Gradall has contended in this case they removed some 290-plus engines, Waukesha engines, and replaced them with Perkins [engines]. Now, if those engines were indeed traded out and Perkins engines were replaced, would Waukesha lose the parts business on those engines had they continued operating?
A: Yes.
Q: What was Waukesha’s profit margin from your experience as the director of service for parts sales on VRD220S, on the average?
A: 30 to 40 percent.
Q: Now if we take 30 percent times 290 engines times $1,000 per year times 3 years, I get $264,600. Does my math sound correct to you?
A: Yes, sir.
Tr. 342-44. After realizing that the proposed calculation totalled only $261,000, *1447 Dresser’s counsel requested during closing argument that the jury return a verdict for that amount.
As noted above, a damage award must bear some rational connection to the evidence.
See Cygnarv. City of Chicago,
Of course, we do not know for sure whether the jury
actually
made such calculations, but a jury has wide discretion in determining damages, so long as it has a reasonable basis.
See Redepenning v. Dore,
2. Damage to Goodwill or Business Reputation
During the trial, Dresser attempted to prove that its business reputation was damaged by Gradall’s breach of the oral contract to perform the 85-2 сampaign. Its primary witness on this point was Ben Stuart, Dresser’s vice president of operations. Stuart made two passing references to possible damage to Dresser’s reputation.
Q: Was it clear at this point that suit would have to be, that we’d have to have a lawsuit between the parties?
A: ... [T]hey were telling us that we weren’t going to have a chance to fix these engines, that they just unilaterally decided to change them out to another engine, which, of course, was hurting our reputation. It meant that the users that had the [Dresser] engine weren’t going to have an engine, or at least a [Dresser] engine that would perform the way they wаnted it.
Tr. at 2014.
Q: Mr. Stuart, you also mentioned this morning that you felt that Gradall’s decision had hurt the reputation of Dresser; is that correct?
A: Yes. Of Waukesha, their decision to replace the engines rather than allow us to repair them properly.
Q: And that was because of the failures that Gradall was experiencing on its— on your engines in its vehicles, correct?
*1448 A: Well, the part about the reputation is that they didn’t allow us to fix the problems and they just made an arrangement to change them out.
Tr. at 2077. Dresser’s counsel referred to this testimony in his closing argument when describing the damages caused by Gradall’s breach.
In denying Gradall’s post-trial motion for a rеmittitur of the damages, the district court stated that the $582,000 award was justified, even though Dresser only asked for $261,000 in lost profits. The “extra” $321,000 could be attributed, at least in part, to reputation damage. The district court noted that although such damage is difficult to quantify, it was justified in this case because both parties sought millions of dollars in damages. Gradall contends that reputation damages are not available in contract actions and, even if they were, the evidence in this case did not support such a large award.
Because this is a diversity case, we apply Wisconsin law. The Wisconsin Supreme Court has held that reputation damagеs are not available in contract cases.
Smith v. Beloit Corp.,
The question, then, is whether the evidence presented could justify an award for reputation damages as a result of Gra-dall’s breach of the contract. We hold it cannot. Where allowed, an award for damage to goodwill or business reputation must be supported by specific evidence.
See Roundhouse v. Owens,
Nevertheless, the award will stand despite the district court and Dresser’s attempt to support it with an incorrect or improper theory (reputation damages). The evidence of lost profits, alone, gave the jury a rational basis for awarding $582,000 and, as noted above, we will not intеrfere with this legitimate exercise of discretion.
3. Passion and Prejudice
Alternatively, Gradall argues that it is entitled to a new trial because the award here is so large that it must have been the product of passion and prejudice. Unquestionably, a new trial, and not remittitur, is required when an award is the result of passion and prejudice, because the prejudice may have infected the verdict itself.
Minneapolis, St. Paul & Sault Ste. Marie Railroad v. Moquin,
B. Wis.Stat. § 402-207(3): The “Battle of the Forms” and the Meaning of “Supplementary Terms”
In ruling on Dresser’s motion for summary judgment, the district court refused to decide whether Grаdall accepted Dresser’s warranty. The problem arose because Gradall’s purchase orders stated that acceptance of the offer would be limited by the terms and conditions in that form, including the warranty. Dresser’s order ac-knowledgement, on the other hand, stated that Dresser’s acceptance of Gradall’s order was expressly conditioned on Gradall’s agreement that the terms of Dresser’s form would control.
Dresser Industries,
When a party sends a written offer that makes acceptance of the agreement subject to its terms, and the offeree responds with a form making its acceptance expressly conditional on assent to its new or different terms, no contract is formed unless the offeror accepts the of-feree’s terms.
Diamond Fruit Growers, Inc. v. Krack Corp.,
Conduct by both parties which recognizes the existence of a contract is sufficient to establish a contract for sale although the writings of the parties do not otherwise establish a contract. In such a case the terms of the particular contract consist of those terms on which the writings of the parties agree, together with any supplementary terms incorporated under any other provisions of chs. 401 to 409.
The district court found that this section applied because the writings of the parties did not establish a contract, but their conduct did.
[T]he court finds that summary judgment is precluded on the issue of whether the conduct of the parties evidenced *1450 an acсeptance of the terms of the Waukesha warranty through the various methods proposed by Waukesha. If no acceptance to the terms existed through these methods, the Waukesha warranty, with its time limitations on claims, would not apply and the UCC’s gap fillers would be used. See Wis.Stat. §§ 402.-313-402.314.
Gradall argues that this holding, and the subsequent jury instruction directing the jurors to determine whether Dresser’s warranty became part of the contract through course of performance, course of dealing, or usage of trade, was legally erroneous. Rather, Gradall claims, once the court decided that § 402.207(3) applied, it should have looked to the standardized gаp-filling provisions of the U.C.C. to determine what "supplementary terms” were part of the contract. These include the implied warranties of merchantability and fitness for a particular purpose provisions. See Wis. Stat. §§ 402.314 and 402.315. According to Gradall, only such gap fillers can serve as “supplementary terms” under § 2-207(3).
Dresser initially argues that Gradall waived its claim by failing to object to the jury instruction that directed the jury to consider course of performance, etc., in deciding whether Dresser’s warranty became part of the agreement. Federal Rule of Civil Procedure 51 requires a party to object to a jury instruction before the jury rеtires in order properly to challenge that instruction on appeal. Gradall failed to do so, but contends that this is not fatal to its claim because it made the same argument in its response to Dresser’s motion for summary judgment, giving the court clear notice of its position. When the court rejected its position, Gradall’s argument continues, it was clear that any further objection would be futile, and was therefore unnecessary to preserve the claim for review. See 9 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure, § 2553, at 639-640 (1971).
The general rule is that “[t]he failure to object [to a jury instruction] may be disregarded if the party’s position had previously been clearly made to the court and it is plain that a further objection would be unavailing.”
Id.
at 640. A position is “clearly made” when the party states it with “sufficient clarity that the trial judge may see what [the grounds for the position are] and follow them if well taken.”
Id.,
§ 2554, at 643 (discussing objections to jury instructions under Rule 51). Gradall made its position clear when it opposed Dresser’s motion for summary judgment, devoting three pages to it in its memorandum opposing the motion. Though the court denied Dresser’s motion, it also rejected Gradall’s theory as to the meaning of “supplementary terms.” In light of this decision, Gra-dall certainly had reason to believe that it would be pointless to press its theory further, and wаs permitted to wait for a final decision on all the issues in the case before appealing the interlocutory summary judgment decision.
See Johnson v. Burken,
We come now to the most academic issue in the case: Does the phrase “supplementary terms” in § 2-207(3) include only those terms expressly provided by the U.C.C. (e.g., the implied warranties of merchantability and fitness for a particular purpose) as Gradall contends, or does it also include terms that may be implied from the parties’ course of performance, course of dealing, and usage of trade?
In arguing that only the Code’s gap-fillers may serve as “supplementary terms” Gradall relies on our interpretation of New York’s version of § 2-207(3).
C. Itoh & Co. v. Jordan International Co.,
We are persuaded, however, that the disputed additional terms (i.e., those terms on which the writings of the parties do not agree) which are necessarily excluded from a Section (3) contract by the language, “terms on which the writings of the parties agree,” cannot be brought back into the contract under the guise of “supplementary terms.”
* sfe i)c # * *
Accordingly, we find that the “supplementary terms” contemplated by Section 2-207(3) are limited to those supplied by the standardized “gap-filler” provisions of Article Two.
Other courts, however, have read § 2-207(3) differently. The Tenth Circuit takes a more liberal approach, interpreting § 2-207’s reference to “supplementary terms incorporated under any other provisions of this Act” as encompassing those terms arrived at through the course of performance, course of dealing, or usage of trade, as well as the Code’s stock gap-fillers.
Daitom, Inc. v. Pennwalt Corp.,
Leading U.C.C. commentators also disagree on the meaning of “supplementary terms” in § 2-207(3). Professor Hawkland believes that the parties’ course of conduct should be considered in cases involving § 2-207(3). 2 W. Hawkland, Uniform Commercial Code Series, § 2-207:04, at 109-110 (1990) (discussing warranties). Professors White and Summers, in contrast, would limit “supрlementary terms” to those expressly provided for in the Code’s gap-fillers. See 1 J. White & R. Summers, Uniform Commercial Code, § 1-3, at 45 (3d ed. 1988).
We believe that Wisconsin’s version of § 2-207(3) is most amenable to the approach taken by Professor Hawkland and the Tenth Circuit in Daitom. That section directs us to fill out a “battle of the forms” contract with “supplementary terms incorporated under any other provisions of chs. 401 to 409.” Wis.Stat. § 402.207(3) (emphasis added). Thus, a court is not limited to the standardized gap-fillers of Article 2, but may utilize any terms arising under the entire U.C.C. The statute’s reference to “any other provisions,” therefore, necessarily encompasses those sections relating to course of performance (§ 402.208) and course of dealing and usage of trade (§ 401.205). This is the most natural reading of the statute. There is no reason to suppose that the legislature would have used the word “any” if it really meant only the usual gap-fillers. This is not to say that the gap-fillers are unimportant; in cases where the parties’ performance gives no indication of their understanding of a particular term, the gap-fillers will supply it. We simply hold that, under Wisconsin law, all of the U.C.C.’s provisions should be used in discerning the terms of a contract under § 2-207(3), including those provisions that allow us to examine the parties’ performance.
The instant case is distinguishable from C. Itoh because in that case we did not directly confront the issue of whether the pаrties’ course of performance, course of dealing, and usage of trade could be considered under § 2-207(3). Apparently, neither party raised the issue, as the provision in question was an arbitration clause, and there was no opportunity to arbitrate. In these circumstances it was necessary to rely on the Code’s gap-fillers. Dresser, in contrast, has raised the issue of the applicability of §§ 2-208 and 1-205, and there has been some activity relating to the terms in question. 2 Further, at the end of its opinion, the C. Itoh court recognized the possibility that in a simple diversity case *1452 (as here) a strong argument exists that custom and usage could be relied upon to supply a supplementary term. It did not resolve the question, however, because the case involved the Federal Arbitration Act, which requires that arbitration clauses be in writing before a stay can issue. Because the parties’ forms did not agree on the arbitration issue, there was no writing. Nevertheless, the court’s discussion of the issue indicates that it did not intend to rule out the possibility that §§ 2-208 and 1-205 could be used to discern the terms of a § 2-207 contract; it simply responded to the facts before it. Our decision today takes up where C. Itoh left off, and we accordingly give a broader interpretation to the meaning of “supplementary terms.” Thus, the district court аcted appropriately in allowing the jury to consider the parties’ course of performance, course of dealing, and usage in the trade in deciding whether Dresser’s warranty became part of the contract under § 2-207(3).
C. Burden of Proof Instruction
Gradall’s final claim relates to another jury instruction; actually, two of them. First, the general burden of proof instruction stated: “[Ejach party asserting a claim has the burden of proving each essential element of his claim by a preponderance of the evidence.” Later in the instructions the court addressed the issue of the oral contract.
Waukesha [Dresser] contends that in April 1985, Waukеsha and Dresser entered into an oral contract to implement a campaign to service the 534B. Gradall contends that there was no such oral agreement or that if there was, Wauke-sha did not substantially perform the terms of the oral agreement.
Gradall maintains that when the court stated “Gradall contends that ... Waukesha did not substantially perform” after previously instructing the jury that a party asserting a claim has the burden of proving it, the court instructed the jury that Gra-dall, rather than Dresser, had the burden of proof on the substantial performance issue.
In reviewing a challenge to a jury instruction, we examine the instructions as a whole, and “[a]s long as the instructions treat the issues fairly and adequately, they will not be interfered with on appeal.”
United States v. Machi,
IV.
For the foregoing reasons, the judgment of the district court is
Affirmed.
ORDER
On consideration of the petition for rehearing with suggestion for rehearing en banс filed by the defendant-appellant, no judge in active service has requested a vote thereon, and a majority * of the judges on the original panel have voted to deny the petition.
It is hereby ordered that the aforesaid petition for rehearing and suggestion for rehearing en banc be and the same is hereby DENIED.
Notes
. Gradall’s Purchase Order provided for a minimum fifteen-month warranty and required Dresser's engines to be generally merchantable and free of design defects. It also gave Gradall the right to recover on any express or implied warranties. Dresser’s Order Acknowledgement, in contrast, provided for a one-year warranty, and only guaranteed that the engines would meet Gradall’s specific needs and be free of design defects. It disclaimed all other express or implied warranties. See Dresser, 702 F.Supp. at 729-30.
. Dresser shipped the warranty with its engines, so Gradall was aware of its contents. Further, Gradall passed the warranty along to its customers, who had repairs done according to the warranty’s terms. Finally, there was some evidence that the custom in the industry was for the manufacturer of a finished product (here, Gradall) to adopt the warranties of the companies who sold them parts (here, Dresser).
Judge Wisdom did not participate in the consideration of the suggestion for rehearing en banc. Judge Coffey did not participate in the consideration of the petition for rehearing or the suggestion for rehearing en banc.