## Facts

- Belden, a wire manufacturer, supplied wire to AEC, a manufacturer of automobile sensors, in a long-term commercial relationship beginning in 1989.
- In 1996–1997, to satisfy AEC’s quality-control program, Belden provided material information and represented it would use insulation supplied by Quantum Chemical Corp.
- In June 2003, without notifying AEC, Belden changed its process and began using insulation supplied by Dow Chemical Co., which had different physical properties.
- In October 2003, Belden sold AEC wire made with Dow insulation; AEC incorporated the wire into sensors, and the insulation later cracked.
- Chrysler installed AEC’s sensors in about 18,000 vehicles, recalled about 14,000 vehicles, and repaired the remainder before sale; AEC agreed to reimburse Chrysler’s recall-related expenses.
- Ordering was handled through exchanged forms: AEC sent purchase orders with its terms; Belden responded with order acknowledgments stating acceptance was expressly conditional on AEC’s assent to Belden’s terms, including a limitation-of-liability clause on the reverse side.
- AEC did not expressly agree to Belden’s limitation clause; the parties nonetheless continued ordering, shipping, and paying.
- AEC sued for consequential damages; the parties’ cross-motions for summary judgment were limited to duty and limitation of remedy, not breach, causation, or damages.

## Issues

1. Whether Belden’s limitation-of-damages clause in its order acknowledgment became part of the parties’ contract under UCC § 2-207.
2. Whether Belden’s prior assurances about using Quantum insulation created an express warranty that was part of the contract for later sales.

## Decision

- The Indiana Court of Appeals affirmed partial summary judgment for AEC and denied Belden’s cross-motion.
- Belden’s limitation-of-damages clause did not become a term of the contract.
- Belden’s 1996–1997 assurances regarding insulation and quality requirements created an express warranty that applied to the parties’ later transactions.

## Legal Principles

- Under UCC § 2-207(1), a purported acceptance that is expressly conditional on the other party’s assent to additional or different terms does not form a contract by the writings absent express assent.
- Under UCC § 2-207(3), when the parties perform despite nonmatching forms, a contract is formed by conduct; its terms are those on which the writings agree plus UCC supplementary terms.
- A seller’s boilerplate limitation of damages that is not mutually agreed upon is excluded from a contract formed by conduct under UCC § 2-207(3).
- Repeated transmission of an acknowledgment containing a damages limitation, without the buyer’s express assent, does not establish incorporation of that term through course of dealing or performance when it conflicts with the buyer’s terms.
- An express warranty is created by an affirmation of fact, promise, or description of goods that becomes part of the basis of the bargain; in a continuing supply relationship, prior material assurances supporting the buyer’s quality requirements may remain operative absent notice of a material change.

## Conclusion

The court held that the parties’ contract arose from their performance under UCC § 2-207(3), excluding Belden’s unassented boilerplate damages limitation, and that Belden’s earlier representations about specified insulation and quality compliance formed a continuing express warranty for later wire shipments.


Belden, Inc. v. Am. Elec. Components, Inc., 885 N.E.2d 751 (Ind. Ct. App. 2008)