## Facts

- Two Pennsylvania corporations (Jaskey Finance and Leasing and Samrus Corp.) purchased a 32K computer system from Display Data Corp., a Maryland corporation, in October 1977.
- The sale and related services were governed by two single-page, double-sided written agreements: an equipment/programming/installation contract and a maintenance contract.
- The front of each agreement stated, in bold type, that the terms and conditions on the reverse side were part of the contract.
- The equipment contract’s reverse side included: (1) a warranty section disclaiming any warranties not specifically provided in the writing and (2) an integration clause stating the contract contained the parties’ entire agreement.
- The maintenance contract contained a similar warranty disclaimer.
- Plaintiffs alleged the system and components failed to operate properly and caused damages, including costs for alternate computer time (economic losses).

## Issues

1. Whether the complaint stated a claim for breach of express warranty where the written contracts contained an integration clause and a warranty limitation/disclaimer restricting warranties to those stated in the writing.
2. Whether the contracts effectively disclaimed the implied warranty of fitness for a particular purpose, defeating plaintiffs’ implied fitness claims.
3. Whether Pennsylvania law permits a negligent design claim in a commercial transaction seeking recovery for purely economic losses arising from alleged product malfunction.

## Decision

- The court granted the defendant’s Rule 12(b)(6) motion to dismiss the claims for breach of express warranties.
- The court granted the motion to dismiss the claims for breach of the implied warranty of fitness for a particular purpose.
- The court granted the motion to dismiss the negligent design claim.
- Other claims (including contract and other theories not targeted by the motion) were not resolved by this order.

## Legal Principles

- Where a written sales contract expressly incorporates reverse-side terms and contains an integration clause, the writing controls the parties’ agreement and limits enforceable express warranties to those set out in the contract.
- A conspicuous disclaimer stating that no warranties, express or implied, extend beyond the contract’s description can bar implied warranty claims, including fitness for a particular purpose, when the transaction is governed by the written agreement.
- In a commercial setting, a negligence claim cannot be used to recover purely economic losses that are the subject of contractual risk allocation through warranty and disclaimer provisions; such losses are addressed through contract and warranty law rather than tort.

## Conclusion

The court enforced the contracts’ integration and warranty-disclaimer terms and, because plaintiffs sought recovery for economic losses from alleged system malfunction, dismissed claims for express warranty, implied warranty of fitness, and negligent design while leaving remaining claims for further proceedings.


Jaskey Fin. & Leasing v. Display Data Corp., 564 F. Supp. 160 (E.D. Pa. 1983)