Transamerica Oil Corporation Case Review 1

IN THE UNITED STATES COURT OF APPEALS FOR THE

TENTH CIRCUIT

Case No. 81-1505

Transamerica Oil Corporation, Plaintiff-Appellee,

v.

Lynes, Inc. and Baker International Corporation, Defendants-Appellants.

723F.2d 758; 1983 U.S. App. LEXIS 14288; 37 U.C.C. Rep. Serv. (Callaghan) 1076

PROCEDURAL HISTORY

The plaintiff purchaser (Transamerica Oil Corporation) brought action to recover damages resulting from defendant sellers’ (Lynes, Inc) breach of an express warranty under Kansas Uniform Commercial Code. The U.S. District Court for the District of Kansas awarded damages to the purchaser. The sellers appealed. The jury awarded Transamerica $196,577.62. The United States Court of Appeals for the 10th Circuit reversed the lower court’s decisions and remanded it United States District Court for further action.

FACTS

Transamerica’s president, Harold Brown saw an advertisement in a trade journal for the defendants’ production injection packers. The defendants’ advertisement stated it was suitable for permanent use in oil and gas wells to seal off one zone from another. Brown called Jack Spenser, a Lynes representative, to see if the production injection packers could be used for permanent completion device and was told, “I think they would be applicable.” Transamerica purchased ten production injection packers from Lynes, Inc. with six shipments. Transamerica received five shipments with an invoice for each delivery. The invoices reverse side had information disclaiming express or implied warranties. The invoices also had information in case there were defective equipment or parts. Transamerica filed suit in the United States District Court for the District of Kansas claiming the production injection packers failed to work as promised. The plaintiff changed their claim from implied warranty to breach of express warranty. The one invoice signed by Brown, who was an authorized contracting agent, makes the invoices germane as evidence of the plaintiff’s acceptance...