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Service Merchandise Co. v. Hunter Fan Co.7/11/2005
ufacture, construction or design of Products or the failure of Products to comply with specifications or any express or implied warranties of Vendor . . . .
Under Paragraph 1, the terms and conditions of the 1993 agreement became binding on Hunter only after SM ordered products from Hunter and Hunter shipped all or part of the products so ordered. Paragraph 11 obligated Hunter to indemnify SM for lawsuits and liability arising from the death or injury to any person alleged to result from any defective products that Hunter sold to SM. In other words, Hunter was obligated to indemnify SM in the event of a death resulting from or claimed to be the result of improper manufacturing, construction, or design defects in Hunter's products sold to SM.
Paragraph 14 (e) under "MISCELLANEOUS TERMS" stated:
This Agreement and subsequent Purchase Orders constitute the full understanding of the parties hereto, and a complete and exclusive statement of the terms of agreement as to the subject matter contained therein. No amendment or modification shall be binding unless hereafter made in writing and signed by the party to be bound.
Thus, unless the 1993 agreement was subsequently amended or modified by express written agreement, Hunter and SM remained bound by terms in the 1993 agreement. Nothing in the two-page 1993 purchase agreement, however, expressly required Hunter to indemnify SM in the event that the claims, lawsuit, or losses were caused by or were the result of SM's own fault, negligence, or error.
In 1995, Hunter and SM adopted a new purchase agreement that contained the same or substantially the same acceptance and indemnification provisions as the 1993 contract. The terms of the 1995 agreement are not at issue here.
In 1998, Hunter and SM adopted a new contract consisting of three pages and also entitled "Purchase Terms and Conditions -- Hardlines -- Perpetual" Agreement. Like the 1993 document, the 1998 contract had the same terms of acceptance, meaning that the agreement took effect upon Hunter's shipment of products ordered by SM. However, the 1998 purchase agreement set forth new terms with respect to warranties and representations, buyer information, indemnification, and liability insurance. Specifically, Paragraph 13 of the 1998 agreement allowed SM to disavow any warranty with respect to "BUYER INFORMATION" that SM supplied to Hunter. In the event that SM provided Hunter with "Buyer Information," including the names, addresses and phone numbers of customers who had purchased Hunter's products from SM, under Paragraph 13, SM disavowed any responsibility for the accuracy or completeness of such information. In addition, the 1998 agreement significantly altered the terms of indemnification by adding language concerning fault or negligence on the part of SM. In pertinent part, Paragraph 14 stated the following:
14. INDEMNIFY AND HOLD HARMLESS. Vendor agrees to protect, defend (at Buyer's election), hold harmless, and indemnify Buyer from and against any and all claims, actions, lawsuits, liabilities, product recalls, losses, royalties, damages, or costs and expenses (including attorneys' fees): . . . (b) arising out of any actual or alleged death of or injury to any person, or damage to any property, or any other damage or loss by whomever suffered, resulting or claimed to result in whole or in part from any actual or alleged defect in Products, whether latent or patent, including actual or alleged improper or negligent manufacture, construction or design of Products or the failure of Products to comply with specifications or any express or implied warranties of Vendor, and regardless of whether or not the death, injury or loss
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