Step-Saver Data Systems, Inc. v. Wyse Technology Case Brief

Summary of Step-Saver Data Systems, Inc. v. Wyse Technology
United States Court of Appeals, Third Circuit, 1991.

Facts: This is how the transactions between P (SS) and D (TSL) took place:

1st: SS would call TSL and place an order.

2nd: TSL would promise on the telephone to ship the goods promptly.

3rd: SS would send a purchase order with details of items to be purchased, their price, and shipping and payment terms.

4th: TSL would ship the order along with an invoice containing terms identical to SS’s purchase order.

On the boxes containing the programs were additional terms which stated that:

  1. customer has nontransferable license to use the program
  2. no express and implied warranties except for a warranty that the disks contained in the box are free from defects.
  3. Opening of the package indicates SS’s acceptance of these terms. If SS does not agree with these terms, it has 15 days to return the package unopened and refund will be issued.

As soon as SS began marketing the system which used defendant’s program, it started facing problems and some of SS’ customers brought lawsuits against it. SS brought suit against TSL.

Procedure: The district court held that the box-top license was the final and complete expression of the terms of the parties’ agreement. Therefore, no warranty was issued and TSL is not liable to SS.

P’s Argument: The contract was completed when TSL agreed on the telephone to ship the items. Furthermore, the additional terms on the box were material alterations and did not become part of the contract under UCC 2-207.

D’s argument: The term on box that stated that if P agrees with the terms by opening the box shows that acceptance of these terms made TSL’s acceptance expressly conditional on assent to the additional or different terms. Furthermore, the refund policy listed proves that TSL’s acceptance was conditioned on P’s assent to the terms of the box-top license.

Ct. Found: No conditional acceptance. It cannot be determined form the fact that D intended the transaction to be based on P’s acceptance of the box-top terms.

D’s next argument: Multiple transactions between P and D so it can be concluded under 2-207(3) that P accepted the box-top terms.

Ct’s ruling: “We are not convinced that TSL’s unilateral act of repeatedly sending copies of the box-top license with its product can establish a course of dealing between TSL and SS that resulted in the adoption of the terms of the box-top license."

Ct. found that the additional terms found on the box materially altered the K and therefore under UCC 2-207(2)(b), did not become part of the K.

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