## Facts

- Borden sold Advent a water-based black dispersion (“Aquablak”) used by Advent to manufacture black ink supplied to R.R. Donnelley & Sons for telephone directory printing.
- Borden sued Advent on a book account for $16,227.50 for goods sold and delivered but unpaid.
- Advent refused payment, asserting prior Aquablak shipments were defective and breached implied warranties of merchantability and fitness for a particular purpose; Advent alleged Borden failed to “age” the dispersion, causing separation and press clogging.
- Advent counterclaimed for consequential damages, primarily lost profits allegedly resulting from Donnelley’s cancellation of its purchases.
- Borden’s invoices and drum labels contained (a) disclaimers of implied warranties and (b) limitations of liability excluding consequential damages such as lost profits.
- The invoice disclaimer appeared on the back in boilerplate type without any front-page notice directing the buyer to the reverse-side disclaimer; the drum label included disclaimer/limitation text in relatively small print beneath more prominent product information.
- Advent filed for Chapter 11 bankruptcy; the automatic stay was lifted by stipulation to allow pursuit of the counterclaim in state court.

## Issues

1. Whether Borden’s written disclaimers of the implied warranties of merchantability and fitness for a particular purpose were conspicuous and effective under U.C.C. § 2-316 (13 Pa. C.S. § 2316).
2. Whether Borden’s exclusion of consequential damages, including lost profits, was enforceable under U.C.C. § 2-719 (13 Pa. C.S. § 2719) even if the warranty disclaimers were ineffective.

## Decision

- The Superior Court affirmed summary judgment for Borden on Advent’s counterclaim.
- The court held Borden’s implied-warranty disclaimers were not conspicuous and therefore were ineffective under U.C.C. § 2-316.
- The court held the separate clause excluding consequential damages was enforceable under U.C.C. § 2-719 and barred Advent’s lost-profits counterclaim.
- Because Advent sought only consequential damages that were contractually excluded, no legally recoverable damages remained on the counterclaim, making summary judgment appropriate.

## Legal Principles

- A disclaimer of the implied warranty of merchantability must mention “merchantability,” and if written must be conspicuous; conspicuous terms are those a reasonable person ought to notice.
- Boilerplate terms on the reverse side of an invoice, without a front-side reference and without typographical prominence, may be inconspicuous as a matter of law.
- Under U.C.C. § 2-719, commercial parties may exclude consequential damages unless the exclusion is unconscionable.
- Warranty disclaimers and consequential-damages limitations perform different contractual functions and are severable; an ineffective disclaimer does not automatically invalidate an otherwise enforceable damages limitation.
- Where an enforceable limitation eliminates the only damages sought (e.g., lost profits), a counterclaim fails as a matter of law despite an assumed breach.

## Conclusion

The court ruled that Borden’s implied-warranty disclaimers failed for lack of conspicuousness, but enforced Borden’s separate exclusion of consequential damages under U.C.C. § 2-719, thereby barring Advent’s lost-profits counterclaim and supporting summary judgment for Borden.


Borden, Inc. v. Advent Ink Co., 701 A.2d 255 (Pa. Super. Ct. 1997)