## Facts

- Blendtec, Inc. manufactured and sold blending machines and bought component parts used in production from SFEG Corp., a designer and manufacturer of electrical power products.
- Blendtec issued purchase orders to SFEG for component parts. The purchase orders set out items, quantities, pricing, and other commercial terms.
- After receiving a purchase order, SFEG sent Blendtec an order acknowledgment that confirmed the purchase-order terms.
- Sometimes—but not consistently—SFEG also sent its separate “Terms and Conditions of Sale” with the order acknowledgment and/or with shipments.
- SFEG’s Terms and Conditions included warranty limitations and stated that SFEG’s acceptance of Blendtec’s purchase order was “expressly subject” to Blendtec’s assent to those Terms and Conditions.
- It was undisputed that Blendtec never expressly agreed to, or expressly objected to, SFEG’s Terms and Conditions.
- Even after receiving copies of SFEG’s Terms and Conditions at times, Blendtec continued to accept shipments and continue placing orders.
- The business relationship later deteriorated, and SFEG sued Blendtec for breach of contract based on allegedly unpaid amounts.
- Blendtec disputed SFEG’s claims and sought to avoid SFEG’s asserted warranty/limitation provisions, contending those terms were not part of the parties’ contracts.

## Issues

1. Whether SFEG’s “Terms and Conditions of Sale,” including warranty and remedy limitations, became part of the parties’ contracts under UCC § 2-207 when they were provided only intermittently and Blendtec did not expressly assent.
2. Whether SFEG’s order acknowledgments were acceptances or counteroffers under UCC § 2-207(1) based on language stating acceptance was “expressly subject” to Blendtec’s assent.
3. Whether SFEG could rely on its Terms and Conditions to support affirmative defenses based on contractual warranty and remedy limits.
4. Whether Blendtec was entitled to partial summary judgment limiting categories of SFEG’s damages under the governing contract terms and UCC default rules.

## Decision

- The court granted Blendtec’s motion for partial summary judgment that SFEG’s Terms and Conditions of Sale were not part of the parties’ contract and granted summary judgment against affirmative defenses resting on those terms.
- The court granted Blendtec’s motion for partial summary judgment limiting SFEG’s damages.
- The court denied SFEG’s motion for summary judgment.
- The court concluded that SFEG could not impose warranty/limitation provisions through sporadic acknowledgments or shipments without Blendtec’s express agreement, particularly where SFEG continued to perform without obtaining assent.

## Legal Principles

- Under UCC § 2-207, a definite and seasonable expression of acceptance generally forms a contract even if it states additional or different terms, unless the acceptance is clearly made conditional on the other party’s assent to those terms.
- Boilerplate language stating acceptance is “expressly subject” to assent is not enough, by itself, to make an acknowledgment a conditional counteroffer when the seller’s conduct shows it was willing to ship and proceed without receiving assent.
- In a transaction between merchants, additional terms proposed in an acceptance may become part of the contract only if they do not materially alter the bargain; warranty and remedy limitations commonly are treated as material alterations and therefore require express agreement.
- When the parties form a contract through their conduct and exchanged forms do not match on disputed provisions, the resulting contract consists of agreed terms plus UCC gap-fillers, not one side’s unilateral limiting language.
- A party cannot base affirmative defenses on contractual limitations that were never incorporated into the parties’ agreement.

## Conclusion

SFEG and Blendtec formed sales contracts through Blendtec’s purchase orders and the parties’ performance, but SFEG’s intermittently supplied Terms and Conditions—despite stating acceptance was “expressly subject” to assent—were not incorporated absent Blendtec’s express agreement; the court therefore granted Blendtec partial summary judgment rejecting defenses based on those terms, limited SFEG’s damages, and denied SFEG’s request for summary judgment.


SFEG Corp. v. Blendtec, Inc., 91 UCC Rep. Serv.2d 878, 2017 WL 395041 (2017)