Court Rules in Favor of Allmetal, R.O.W. Window Co. Appeal in Breaches of Implied Warranty Case Denied

Judges with the Third District Appellate Court of Illinois have denied R.O.W. Window Co.'s appeal of a trial court's ruling that Allmetal Inc. had disclaimed implied warranties in a case that could have further implications across the industry.

R.O.W. filed a lawsuit against Allmetal in 2003, alleging "breach of implied warranty of fitness for a particular purpose and breach of implied warranty of merchantability" stemming from the purchase corner keys and spacers from Allmetal, which it said failed to perform in R.O.W. products as anticipated and consequently forced R.O.W. insulating glass windows to fail during the 10-year warranty period offered by the company. R.O.W. sought more than $1 million in damages in its original lawsuit.

In 2005, Allmetal filed a motion to dismiss the complaint presenting the argument that its catalog and invoices included a disclaimer disavowing liability for "warranties either express or implied, including any implied warranty of merchantability or fitness for a particular purpose." R.O.W. responded to the motion to dismiss, with three counter arguments of its own: that the disclaimers were not conspicuous, that the company was not bound by them because they were not part of the sales contract-R.O.W. ordered on recommendation, not from the catalog and generated invoices from its own computers rather than receiving them from Allmetal-and that "former sales manager and president … was not aware of the disclaimer or limitation of warranty," while the employee in charge of ordering the corner keys and spacers "did not have the authority to waive any warranty for the items he had purchased." The trial court ruled in its favor of Allmetal and R.O.W. subsequently filed an appeal of the ruling.

The appeals court ruled that the "disclaimers were presented in a manner reasonably sufficient to draw attention to them" as they were set off either by open space above and below it (on the invoice) or in a separate text box with a boarder or shading to set it off from the rest of the page (in the catalog).

The court also ruled that R.O.W. could not claim lack of knowledge about the disclaimer based the argument that it was not part of the sales contract, stating that "there was a course of dealing that took place over several years" and "that course of dealing supplements the terms of the parties' agreement and establishes that the exclusion of implied warranties was a part of the bargain." Additionally, the judges overseeing the case ruled that, "the plaintiff accepted and used those products, paid out on the invoices, and allowed the purchasing employee to order more products without objection and without ever communicating any limitations to the defendant. The facts establish that the purchasing employee had, at the very least, apparent authority to enter into transactions with the defendant" and dismissed R.O.W's appeal.

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