• November 17, 2010

Company A and Company B agree that A will buy components from B if/when needed, at certain unit prices depending on volume.  There is no commitment to buy any widgets.  That’s to be determined by later purchase orders, the prices and terms to be reflected in corresponding invoices.

In ebm-papst, inc. v. AEIOMed, Inc., plaintiff ebm-papst’s components had a defect rate that AEIOMed ultimately concluded precluded its use in AEIOMed’s sleep apnea-treating device (a CPAP machine).  AEIOMed therefore stopped paying ebm-papst invoices, refused delivery of orders, and, predictably, the result was litigation.

Of particular interest to commercial litigators will be U.S. District Court Judge Ann D. Montgomery’s (D. Minn.) analysis of plaintiff’s motion for summary judgment as to attorneys’ fees because ebm-papst’s invoices provided for fee-shifting if it had to bring suit for payment on the invoices (triggering the so-called “battle of the forms” under Article 2 of the Uniform Commercial Code).  Judge Montgomery, however, held that, “Given the specific factual context of this case, the attorney’s fees terms on the invoice are a material alteration of the terms of the contract between the parties,” and, on that basis, held that the term did not become part of the contract between the parties.

Judge Montgomery’s decision may also be of interest for its analysis of an unsuccessful “Daubert Motion.”

Leave a Reply

Your email address will not be published. Required fields are marked *