Step-Saver Data Systems v. Wyse

Citation: Step-Saver Data Sys., Inc. v. Wyse Technology, 939 F.2d 91 (3d Cir. 1991).

Factual Background
Step-Saver, a computer reseller, ordered and resold 142 copies of a software program from The Software Link after having been given specific oral representations about the program's compatibility with other software. In each case, Step-Saver placed its orders by telephone. After a telephone transaction was complete, each party sent the other confirming documentation. When the software programs were delivered, however, they were packaged in boxes sealed in shrinkwrap, on which was affixed a license purporting to disclaim warranties and limit liability. These terms had not been discussed during any of the telephone orders, and were not set forth in either party's confirming documentation.

Appellate Court Decision
The court considered Step-Saver's telephone calls to constitute offers, which The Software Link accepted by promising to ship the software. Applying U.C.C. § 2-207, the section adopted to address "battle of the forms" transactions where a general agreement has been reached but the specific governing terms are unclear, the court held that the shrinkwrap license, like the last form sent between merchants, constituted a proposal for additional terms to the sales contract, which are deemed binding unless material. Since the warranty disclaimer and remedy limitations set forth in the shrinkwrap license were material, the court determined they were not part of the contract between Step-Saver and The Software Link. Although Step-Saver was aware of the terms of the shrinkwrap license after the first order was shipped, the court wrote that "repeatedly sending a writing, whose terms would otherwise be excluded under UCC § 2-207, cannot establish a course of conduct . . . that adopted the terms of the writing."