Contractors purchasing materials or equipment for a project encounter the “standard,” pre-printed purchase order or sales agreement forms of the supplier. These forms contain language, authorized by the Uniform Commercial Code, which limits the supplier’s liability and disclaims much to the responsibility for the supplier’s product. Yet that product may very well have been specified by the project owner.
In a recent case, a contractor purchased steel reinforced concrete pipe from a supplier. The sales agreement included a “Limited One Year Warranty.” The supplier would repair or replace any defective goods, or make a full refund of the purchase price, within one year of delivery of the goods. This was the contractor’s exclusive remedy. Any other liability or responsibility was expressly disclaimed. Several years after project completion, a pipe failed and the project owner sued the contractor. The contractor then learned that the limitation of liability was enforceable under the UCC. The contractor had no recourse against the supplier.
I'd like input on how you respond to disclaimers in your suppliers’ paper work. Do you attempt to wage a “battle of the forms” in an effort to have your contract language supersede the supplier’s “standard,” nonnegotiable form? Any success in this regard?
As always, I welcome all comments below.
Don't miss, In the upcoming issues of Construction Claims Advisor . . . case summaries and articles covering:
- Contractor Left Exposed after Supplier Limited Liability
- Negative Performance Evaluation Cannot Be Set Aside
- “Delivery Receipt” of Proposal Was Not Proof of Agency Receipt
Bruce Jervis, Esq., Senior Editor