Southern Illinois Riverboat Casino Cruises, Inc. d/b/a Players Island Casino brought a diversity action against Triangle Insulation & Sheet Metal, alleging that Triangle was negligent and/or breached an express or implied warranty when it recommended and sold Players a certain maritime sealant for the insulation covering the am conditioning ducts on its casino vessel. Players also sought a declai-atory judgment that Triangle was liable for the economic damages allegedly resulting from *669 this negligence and/or breach of warranty. The district court dismissed the negligence claim with prejudice to refiling it in this action, but without prejudice to filing a claim for contribution in another pending civil action. The district court also granted Triangle’s motion for summary judgment with respect to Players’s breach of warranty claim, and dismissed its declaratory judgment count for failure to state a claim. Players appeals only the district court’s summary disposition of its breach of warranty claim, which we affirm.
I.
Southern Illinois Riverboat Casino Cruises, Inc. d/b/a Players Island Casino (“Players”) owns and operates a casino river boat in Metropolis, Illinois. In March 2000, Players installed new exterior air conditioning unit ducts on the outside stern of its motor vessel, Players II, which operates as a gaming casino. On July 20, 2000, Shay Nolan, Players’s facilities manager, contacted Gary Holder, a representative of defendant Triangle Insulation & Sheet Metal (“Triangle”), regarding the need to acquire a water-proof sealant or vapor barrier to protect the insulation then covering the air conditioning ducts from the weather and elements. Later that day, Holder went to the casino vessel to examine and measure the ductwork and site where the sealant would be applied. 1 During the course of Holder’s visit, Nolan contends that she, along with another Players employee, advised Holder of the casino’s proposed use of the sealant. Specifically, they informed Holder that Players intended to apply any sealant he recommend “in the open air at the stern of the vessel during casino business hours,” while the vessel was occupied by patrons and employees. 2 Players claims that after Holder was informed of the circumstances in which it intended to apply the sealant, he recommended the type of sealant the casino should use and gave advice regarding the proper application of the product. 3 Triangle disputes this assertion, contending that when Holder visited the proposed application site “he provided no instructions regarding the application of the product.”
On July 21, 2000, Holder delivered to Players a catalog page from the Childers Products Company (“Childers”), listing five vapor barriers approved for maritime use under applicable Coast Guard regulations. That same day, Holder advised Nolan by telephone that Triangle had two of the listed products in stock available for immediate purchase, one of which was En-cacel V. On July 25, 2000, Nolan ordered four five-gallon containers of Encacel V. The containers were not delivered to the casino vessel, but were instead picked up later that day by Players at Triangle’s place of business in Paducah, Kentucky. Each of the containers had identical labels which,' among other things, warned buyers that the product was a “flammable liquid and vapor,” detailed the side effects a person might suffer if he inhaled or exposed himself to the product, and gave certain emergency first aid instructions. The container labels also included the following instructions: “FOR INDUSTRIAL USE *670 ONLY BY TRAINED CRAFTSPEOPLE! REFER TO TECHNICAL DATA AND MSDS SHEETS FOR COMPLETE INSTALLATION INSTRUCTIONS AND PRODUCT INFORMATION.”
On July 27, 2000, Players, having apparently read these instructions, informed Triangle that at the time its representatives picked up the Encacel V containers they were not given a copy of the Material Safety Data Sheet (“Safety Sheet”) for the product. Triangle immediately sent Players, via facsimile, a brief set of instructions regarding the application of Encacel V, as well as a copy of the Safety Sheet provided by Childers. The Safety Sheet extensively elaborated on the warnings, application instructions, and first aid information noted on the Encacel V container labels.
The label on the Encacel V containers also included the following disclaimer of warranties and remedy limitation:
IMPORTANT: Childers warrants that the materials herein contained, when shipped, conform to specifications and are of first class materials and workmanship. This product is sold upon the condition and agreement that there have been no representations or undertakings made by or on behalf of manufacturer and/or seller, and that there are no guarantees or warranties, express or implied in fact or by law, except as contained herein. Manufacturer and/or seller shall not be responsible, obligated or liable for any application or use of or to which the products may be put, either singly or in combination with other products or ingredients. It being expressly understood and agreed that manufacturer’s and/or seller’s liability shall in no event exceed the purchase price.
On July 28, 2000, at approximately 9:00 a.m., Players personnel began applying, in the open air, Encacel V to the surface of the insulation covering the air conditioning ductwork at the stern of the casino vessel. 4 Later that afternoon, guests and employees of Players began complaining that they felt ill from the air inside the vessel. At approximately 4:00 p.m., Holder received a telephone call from a representative of Players advising him of the problem, expressing the opinion that Encacel V was the cause, and requesting that he come to the vessel at once to assess the situation. In response, Holder and two other Triangle employees, Lewis Bowles and Kent Buchanan, immediately traveled to the vessel and, upon their arrival, inspected the site where the product had been applied and recommended that the insulation be removed. The Triangle representatives then removed the insulation, placed it in “heavy” vinyl garbage bags, and deposited the bags on a garbage scow behind the casino vessel. According to Triangle, its representatives discovered the following during the process of removing the insulation: (1) that Players applied an excessive amount of Encacel V to the air conditioning ductwork insulation; (2) that “no seal had been applied [by Players] to the joints in the sheet metal ductwork so as to prevent outside air from entering the intake portion of the duct”; and (3) that a “diesel motor located on a work barge just behind the aft portion of the boat ... was emitting heavy diesel fumes into the aft area of the boat where the air conditioning duct-work was located.” Players disputes that its employees applied an excessive amount of Encacel V, and contends the lack of a seal to the joints of the sheet metal duct-work is irrelevant because the air conditioning units do not pull outside air into *671 the vessel but “simply recirculate air inside the boat.”
As a result of the foregoing, Players closed the casino vessel for several hours. The casino reopened for business later that day, however, after the local fire marshal and certain governmental agencies performed air quality testing and other inspections to the vessel, determining that it was safe for re-entry. Although no further Encacel V was applied to the insulation of the air conditioning ducts, the casino vessel was, nevertheless, closed again when patrons and employees of Players continued to complain of feeling ill from the air within the boat. The casino vessel was then closed for two to three business days, during which time Players employees, outside vendors, and contractors all worked on cleaning the vessel from the damage allegedly caused by Encacel V fumes. According to Players, the cleanup “involved virtually the entire vessel, including air conditioning coils and fan motors on all of the air handlers on the boat,” and cost thousands of dollars.
On December 5, 2000, Players filed a three-count diversity action, pursuant to 28 U.S.C. § 1332, against Triangle in federal district court, alleging negligence, breach of warranty, and requesting a declaratory judgment on the issue of damages. In Count I, Players alleged that Triangle was negligent in failing to warn or advise it of the “dangerous nature of the ENCACEL V product” or the “risks associated with the intended use.” In Count II, Players averred that Triangle breached an express or implied warranty of the parties’ sales contract by failing to use reasonable care in selling and recommending Encacel V as the appropriate sealant for the insulation covering the air conditioning ducts on its casino vessel. In Count III, Players ■sought a declaratory judgment, pursuant to 28 U.S.C. § 2201, that Triangle was liable for all of the damages allegedly resulting from Counts I and II.
On May 3, 2001, Triangle filed a com-' bined motion to dismiss and motion for summary judgment. On September 25, 2001, the district court dismissed the negligence claim without prejudice, allowing Players to refile it as a contribution claim in another pending civil action. 5 The district court then granted Triangle’s motion for summary judgment of Players’s breach of warranty claim. In doing so, the district court held that Players could not “as a matter of law, establish that [Triangle] breached any warranty, express or implied,” 6 and “[moreover, the label disclaims all warranties and limits [Triangle’s] liability to the purchase price.” Finally, the district court dismissed Players’s declaratory judgment count with prejudice for failure to state a claim. Players appeals only the district court’s decision granting Triangle summary judgment of its breach of warranty claim.
II.
We review a district court’s decision to grant a motion for summary judgment
de novo,
construing all facts, and drawing all reasonable inferences from those facts, in favor of Players, the non-moving party.
See, e.g., Peele v. Country Mut. Ins. Co.,
We begin our analysis by noting that both parties agree that Players’s breach of warranty claim is governed by Illinois law, specifically that state’s version of the Uniform Commercial Code. Because neither party contends that Illinois’s choice of law rules require us to apply the substantive law of another state,
see, e.g., ECHO, Inc. v. Whitson Co., Inc.,
On appeal, Players argues that the district court erred in granting Triangle summary judgment of its breach of warranty claim. Players contends that Triangle expressly or impliedly warranted that Enea-eel V could be applied to the insulation covering the casino vessel’s air conditioning ducts “in the open air at the stern of the vessel during [regular] business hours,” while patrons and employees were aboard. Players claims that this contractual warranty was breached when it applied Encacel V under the aforementioned circumstances, and the product’s fumes seeped into the interior of the vessel, resulting in the casino being closed for two to three business days and necessitating an extensive and costly cleanup of the vessel. Players also maintains that the disclaimer of warranties, remedy limitation, and warnings included on the label of the Encacel V containers do not preclude it from recovering any consequential damages arising from Triangle’s alleged breach of warranty.
For the reasons that follow, we conclude that Players cannot prevail on its breach of warranty claim. In reaching this determination, we have made the following assumptions: (1) that Players submitted evidence sufficient to establish the breach of an express warranty, see 810 ILCS § 5/2 — 313, 7 or the implied warranty of fitness for a particular purpose. See 810 ILCS § 5/2-315; 8 (2) that the disclaimer of warranties on the Encacel V container label is not included within the scope of the parties’ sales contract; and (3) that a genuine issue of material fact remains as to whether the warnings on the Encacel V container label and corresponding Safety Sheet were sufficient to adequately warn Players of the hazards allegedly giving rise to its economic damages. 9 However, even with these favorable as- *673 sumptions in tow, Players is still precluded from suing Triangle for any consequential damages arising from the alleged breach of warranty because the parties’ sales contract contains a valid remedy limitation.
As previously noted, each container label of Encacel Y included the following language:
Manufacturer and/or seller shall not be responsible, obligated or liable for any application or use of or to which the products may be put, either singly or in combination with other products or ingredients. It being expressly understood and agreed that manufacturer’s and/or seller’s liability shall in no event exceed the purchase price.
Players contends that the remedy limitation is not included in the parties’ sales contract because it was an “additional term” under 810 ILCS § 5/2-207 (i.e., the “battle of the forms” section) that “materially altered” the agreement. Section 5/2-207 provides that a:
[Djefinite and seasonable expression of acceptance or a written confirmation which is sent within a reasonable time operates as an acceptance even though it states terms additional to or different from those offered or agreed upon, unless acceptance is expressly made conditional on assent to the additional or different terms.
§ 5/2-207(1).
Between merchants such additional terms become part of an Article 2 sales contract unless:
10
“(a) the offer expressly limits acceptance to the terms of the offer; (b)
they materially alter it;
or (c) notification of objection to them has already been given or is given within a reasonable time after notice of them is received.” § 5/2-207(2)(a)-(c) (emphasis added). But neither the text of § 5/2-207, nor that of any other Illinois U.C.C. provision, explains when an additional or different term will constitute a material alteration of a sales contract. We, therefore, turn to the statute’s corresponding comments for interpretive guidance.
See, e.g., Milledgeville Cmty. Credit Union v. Corn,
Players argues that the remedy limitation on the Encacel V container label is a
per se
material alteration of the parties’ sales contract because any limitation on the right to recover consequential damages causes a significant and substantial shift in the ordinary allocation of risk. In support of this argument, Players relies heavily on the case of
Album Graphics, Inc. v. Beatrice Foods Co.,
The holding of
Album Graphics
was, however, recently called into question by a different division of the same Illinois district appellate court in
Intrastate Piping & Controls, Inc. v. Robert-James Sales, Inc.,
The Supreme Court of Illinois has not yet addressed the issue before us: whether a remedy limitation may constitute a material alteration of a sales contract under § 5/2-207. In the absence of a decision by the state’s highest court, “federal courts treat decisions by its intermediate appellate courts as authoritative, unless ... a split among those courts makes such treatment impossible, or unless there is a compelling reason to doubt that the courts have got the law right.”
See, e.g., Rekhi v. Wildwood Indus., Inc.,
At the outset of our analysis, we note that the
Album Graphics
court and the
Intrastate Piping
court
both
concluded that whether a remedy limitation materially alters a contract under § 5/2-207 is purely a question of law. The
Album Graphics
court held that a remedy limitation is a
per se
material alteration of a contract under the statute.
See Album Graphics,
The literal provisions of the UCC appear to provide a straightforward basis for analyzing the inclusion of a remedy or damage limitation clause in a battle of the forms between merchants. Section 2-207, Official Uniform Comment No. 5 renders such clauses reasonable, and directs the parties and the court to § 2-719. Under the latter provision, limitations on remedies, including consequential damages, are reasonable as a matter of law, and do not materially alter the parties’ agreement, unless the limitation on the remedy, such as to repair or replacement, fails of its essential purpose, or the limitation on consequential damages is unconscionable.... This approach looks to § 2-719 rather than § 2-207for the result in the case.
Id. at 956 (emphasis added).
Players argues that we should not consider
Intrastate Piping
as authoritative because it “presents a wholly different factual situation.”
12
However, we have already noted that whether a remedy limitation constitutes a material alteration of a
*676
sales contract under § 5/2-207 is purely a question of law. We recognize that other courts “analyze the question of material alteration on a case-by-case basis as purely a factual one,”
see, e.g., Chateaugay Corp.,
Furthermore, even were we persuaded that
Album Graphics
and
Intrastate Piping
presented us with two opposing, yet equally plausible interpretations of state law, it is well established that, for reasons of federalism and comity, “we generally choose the narrower interpretation which restricts liability, rather than the more expansive interpretation which creates substantially more liability.”
Home Valu,
Having concluded that the remedy limitation is part of the parties’ sales contract, we will now address the reasonableness of the clause under 810 ILCS § 5/2-719.
See also Intrastate Piping,
As previously noted, the remedy limitation in this case confines Players’s recov
*677
ery to the “purchase price” of the Encacel V. This is clearly the type of exclusive remedy contemplated by § 5/2-719(1).
See, e.g., Intrastate Piping,
Players’s final argument is that the district court’s decision should be reversed because the court raised the issue of the remedy limitation
sua sponte,
did not permit the parties to substantively brief the issue, and then used the remedy limitation as the primary basis for granting Triangle’s motion for summary judgment of its breach of warranty claim. The transcript from the motion hearing confirms that the district court judge raised the remedy limitation issue
sua sponte.
15
However, the district court’s decision to raise this issue, in and of itself, was not erroneous. While district courts must be careful not to create the impression that they are taking an advocacy position on a particular issue, they are not required to ignore contractual provisions or applicable law. Here, the substance of the Encacel V container label is at the very heart of the parties’ dispute in this case. The district court judge did not scour the record searching for a reason to dismiss Players’s breach of warranty claim- — the remedy limitation is contained in the
same
section as the hotly contested disclaimer of warranties. Given the current state of Illinois law, one could wonder why Triangle’s attorney chose not to raise the remedy limitation issue. Whatever the reason, the district court was certainly permitted to do so.
See, e.g., Jones v. Page,
We agree with Players, however, that once the district court raised the remedy limitation issue, it was required to give Players a meaningful opportunity to address the question before granting Triangle’s motion for summary judgment on that basis.
16
In the past, we have held
*678
that
sua sponte
dismissals, in this case a decision granting summary judgment on a basis not argued by the parties, are hazardous for three reasons: (1) they often conflict with the traditional adversarial precepts of our system of justice by tending to make the district court seem like a proponent of one side as opposed to a neutral decision-maker; (2) they may prejudice plaintiffs by depriving them of the opportunity to amend them complaint or to argue against dismissal; and (3) they tend to defeat the very purpose they are designed to serve — judicial efficiency.
See, e.g., Ricketts v. Midivest Nat’l Bank,
In this case, only the second prong of this test is at issue: Was Players given a fair opportunity to present evidence in opposition to the district court’s entry of summary judgment on the basis of the remedy limitation? We think it is clear from the record that such an opportunity was not afforded to Players. Nevertheless, we see no reason to remand the case because Players was given a full opportunity to make its argument on appeal, and, as indicated in this opinion, the argument presented does not allow it to prevail under Illinois law. If Players had demonstrated that the remedy limitation was excluded from the contract because of a conditional offer or a seasonable objection, or if it had shown that the clause failed of its essential purpose or was unconscionable, there might have been a basis for remanding the case for further consideration.
17
But in the absence of such assertions, we conclude that the remedy limitation entitled Triangle to summary judgment of Players’s breach of warranty claim.
See, e.g., Aviles,
III.
The remedy limitation in the parties’ sales contract precludes Players from recovering any consequential damages arising from Triangle’s alleged breach of warranty. We, therefore, AffiRM the district court’s grant of summary judgment on that basis.
Notes
. At that time, the ductwork was completely encased by the insulation and was therefore not visible to Holder.
. Players asserts that it wanted a product that would work under these circumstances "to avoid closing the vessel and thereby avoid interruption of business and concomitant loss of revenue.”
.In Nolan’s affidavit, she also claims that Holder "never told us we should not apply the product while patrons or employees were aboard the vessel,” or that "the boat needed to be closed before using this product, or that we should evacuate the vessel area before applying the product as intended.”
. Before applying the product, Players purchased and picked up two additional five-gallon containers of Encacel V from Triangle, both of which had the same label as the other four.
. There is a separate civil action pending before the district court involving plaintiffs who claim that they were personally injured as a result of Players’s application of Encacel V— Howard, et al. v. S. Ill. Riverboat Casino Cruises, S. D.Ill. Case No. 00-4321-GPM.
. In reaching this conclusion, the district court noted "[Players] claims that [Triangle] failed to warn it of the danger posed by the ENCACEL V product. Yet both the label and the Material Data Safety Sheet (MSDS) [i.e., Safety Sheet] accompanying the product specifically warn of the dangers associated with the product....”
. Section 5/2-313 provides that "[a]ny affirmation of fact or promise made by the seller to the buyer which relates to tire goods and becomes part of the basis of the bargain creates an express warranty that the goods shall conform to the affirmation or promise.” 810 ILCS § 5/2-313.
. The implied warranty of fitness for a particular purpose is created "where the seller at the time of contracting has reason to know any particular purpose for which the goods are required and that the buyer is relying on the seller’s skill or judgment to select or furnish suitable goods, there is unless excluded or modified under the next section an implied warranty that the goods shall be fit for such purpose.” 810 ILCS § 5/2-315.
.These assumptions have been made solely for purposes of this case and should not be construed as expressing an opinion on the merits of the underlying issues.
. The district court concluded that the parties are "merchants” within the meaning of 810 ILCS § 5/2-104. This finding is not disputed on appeal.
. The First District Appellate Court of Illinois sits in Chicago, and encompasses all of Cook County.
See
I.L. Const, art. VI, § 2. Unlike the state's other four district appellate courts, the first district is divided into separate divisions (there are currently six).
See J.
Timothy Eaton et al., Illinois Civil Appellate Practice Chapter 1 Reviewing Courts: State and Federal, II.B(2)[1.8] (Ill.Inst. for Continuing Legal Educ. September 1997). Therefore, the first district is the only intermediate appellate court in Illinois that can have an internal split of authority. From what we can gather, a split of authority among the first district’s six divisions can only be resolved by the Supreme- Court of Illinois.
See, e.g., Schiffner
v.
Motorola, Inc.,
. Players argues that "in
Intrastate Piping,
the limitation of remedy was agreed to by the buyer before any product was shipped,” and “unlike the present case ... the parties in
Intrastate Piping
had a long course of dealing over several years in which limitations of remedies was a part of every contract.” We will briefly touch on these assertions. First, the buyer in
Intrastate Piping
did not agree to the remedy limitation before the goods were shipped. Had that been the case there would have been no dispute. The court merely noted that "the remedy limitation was sent the same day [the contract was made] ... and was received before any pipe was shipped.”
Intrastate Piping,
. Like the
Intrastate Piping
court, this circuit has previously recognized that the contract clauses listed in Comment 5 to § 5/2-207 are reasonable as a matter of law under the statute, and therefore cannot constitute a material alteration of a sales contract.
See, e.g., Sethness-Greenleaf, Inc. v. Green River Corp.,
. Because Players has not asserted that the remedy limitation is to be excluded on either of the other grounds listed in § 5/2-207(2)(a), (c), i.e., conditional offer or seasonable objection, those issues have been waived.
See, e.g., Hoffman v. Caterpillar, Inc.,
. At the hearing, the district court judge made the following statements, "Now you've got two things. You’ve got the disclaimer of warranties which may or may not be ade- ■ quate; that’s up in the air. But you also have something that’s even more interesting and often overlooked. You have what’s called a limitation of remedy. And the limitation of remedy is different than the disclaimer of warranty.... [I]t seems to me ... [that] irrespective of the issue of warranties, you have a limitation of remedy here which is an entirely different thing.... You’ve got a limitation remedy which just kind of gets around all of the issues concerning warranties.”
. Players’s counsel objected to the judge raising the issue sua sponte, arguing "Judge, they haven’t argued that. They haven’t raised it. They have not relied on it. It hasn’t been briefed. They haven't made that their argument. ... It's difficult for me to address that because of the fact that they haven’t argued it, haven't briefed it, and it’s difficult for me to respond to a section of the code that hasn't been raised by anyone except the court until this morning....” The district court judge’s only response to this objection was as follows: "Well, I understand, but you haven't either.” In dismissing the case, the district court concluded, "[n]otwithstanding any argument Plaintiff has concerning the viability of the *678 disclaimer of warranties, there is no question that the limitation of remedy provision is sufficient and serves to bar the damages that Plaintiff seeks....”
. We note in passing that it is unclear from the record whether Players ever requested that Triangle reimburse it for the purchase price of the Encacel V. Players does not raise the issue on appeal, however, and we will therefore not remand on that basis either.