Acquisition Law Case Study

Acquisition Law Case Study Number 1

Transamerica Oil Corporation v. Lynes, 723 F.2d 758

Robert Lewis

Webster University

Procedural History:

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, arguing that the statute of limitations had expired and was thus illegal under Kansas state law. Further, Lynes claimed that Transamerica agreed to a limitation of liability as well as limitation of remedies by signing invoices that included disclaimers, and that the trial court was at fault for not allowing the invoices to be presented to the jury as Transamerica’s acceptance of the contract’s limitations of remedies.

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:

1. Transamerica’s president, Harold Brown, saw defendant’s advertisement for “production injection packers” in a trade journal. Brown was interested in the advertised device, so he called and spoke with a sales representative. Lynes sent Transamerica more written information, including additional advertisements and descriptive literature. The descriptive literature states that the production injection packer is suitable for use as a permanent completion device in open well holes. Brown had a subsequent conversation with a district manager at Baker, to whom the sales representative had referred him, regarding the use of the device as a permanent...