Acquisition Law Case Study Number 1
Transamerica Oil Corporation v. Lynes, 723 F.2d 758
Transamerica Oil Corporation filed suit in the United States District Court for the District of Kansas against Baker International Corporation and its subsidiary, Lynes Inc. for breach of express warranty under the Kansas Universal Commercial Code. As the plaintiff, Transamerica argued that the product purchased from the defendant (Lynes) did not perform as specified. The trial jury found in favor of the plaintiff (Transamerica) and awarded damages in excess of the product’s cost.
Lynes Inc. (Defendant) appealed the trial court decision, ...view middle of the document...
The comments of the district manager are in dispute. Brown asserts that he was “assured” that the device would perform as a permanent completion device; while the district manager remembers saying that he thought the device “would be applicable” as a permanent completion device.
2. Transamerica purchased ten projection injection packers in six shipments from the defendant over the period in question. Lynes delivered invoices with five of those shipments. The invoices contained contract language limiting both liability and remedy on the reverse side.
3. Of the five invoices, at least one was signed by Brown. The other invoices were signed by agents of Transamerica who were not authorized to act as contracting agent for the plaintiff. The one invoice signed by Brown, who was an authorized contracting agent, makes the invoices germane as evidence of the plaintiff’s acceptance of the limitations of liability and remedies terms and conditions.
1. Was Transamerica barred from filing suit against Tynes Inc. because the court action was taken after the expiration of the statute of limitations?
2. Did Transamerica agree to limitations of liability and limitations of remedy by signing invoices that contained disclaimers?
3. Was the trial court correct in excluding the invoices that contained the disclaimers from the evidence that was presented to the jury?
Answer / Holding
The appellate court upheld the rulings of lower court, ruling that the lower court had been properly briefed regarding the assessment of liability for the breach of an express warranty; therefore the appellate court...