Brown Machine, Inc. v. Hercules, Inc. – 770 S.W.2d 416 (1989)

Case name: Brown Machine, Inc. v. Hercules, Inc.
Citation: 770 S.W.2d 416 (1989)
Plaintiff: Brown Machine, Inc.
Defendant: Hercules, Inc.

Issue: Whether the parties had agreed to an indemnification provision in their contract.

Key Facts: The plaintiff, Brown Machine, sold the defendant, Hercules, a T-100 trim press. Prior to the sale, a proposal was submitted to the defendant which stated an indemnification clause. The defendant reviewed the proposal and spoke on the phone with the plaintiff but objected to the payment term in the proposal. The plaintiff contested that the proposal was an offer and this conversation was an acceptance.
The defendant then submitted a purchase order (actual offer) for the trim press which stated that it “limits acceptance to the terms stated…any additional or different terms proposed by the seller are rejected unless expressly agreed to in writing.”
The plaintiff then sent the defendant an order acknowledgement which again stated the indemnification clause. The defendant responded with a latter that stated a specification in the product needed to be changed but “all other specifications are correct.” The plaintiff contended that this constituted assent by the defendant to the indemnification clause but the judge said it was obvious that “specifications” only referred to the product and not the terms and conditions.

Procedural History: The trial court awarded the plaintiff for the defendant violating the indemnification provision.

Analysis: If this was common law, we would use the last shot rule. However, under the UCC we use acceptance with additional terms (Section 2-207).

Holding: The parties had not agreed to an indemnification provision.

Judgment: The court reversed the trial court’s decision.

See our helpful UCC 2-207 Flowchart


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