Step-Saver Data Sys., Inc. v. Wyse Tech – Case Brief Summary (Federal Court)

In Step-Saver Data Sys., Inc. v. Wyse Tech., 939 F.2d 91 (3d Cir. 1991), Step-Saver, a value added retailer, placed telephone orders for software and confirmed with purchase orders. The manufacturer then forwarded an invoice back to Step-Saver. The software later arrived with a license agreement printed on the packaging. Step-Saver, 939 F.2d at 95-96

Finding the license "should have been treated as a written confirmation containing additional terms," the Third Circuit applied U.C.C. section 2-207 and held the warranty disclaimer and limitation of remedies terms were not part of the parties' agreement because they were material alterations. Step-Saver, 939 F.2d at 105-06.

Step-Saver Data Sys., Inc. v. Wyse Tech., involved a claim by a value added retailer, Step-Saver, for breach of warranties against the software vendor, The Software Link (TSL).

The court explained Step-Saver's purchase of the software as follows:

First, Step-Saver would telephone TSL and place an order. (Step-Saver would typically order twenty copies of the program at a time.) TSL would accept the order and promise, while on the telephone, to ship the goods promptly. After the telephone order, Step-Saver would send a purchase order, detailing the items to be purchased, their price, and shipping and payment terms. TSL would ship the order promptly, along with an invoice. The invoice would contain terms essentially identical with those on Step-Saver's purchase order: price, quantity, and shipping and payment terms. No reference was made during the telephone calls, or on either the purchase orders or the invoices with regard to a disclaimer of any warranties.Printed on the package of each copy of the program, however, would be a copy of the box-top license. 939 F.2d at 95-96.

Although TSL argued that the contract between it and Step-Saver did not come into existence until Step-Saver received the program, saw the terms of the license, and opened the program packaging, the court rejected this argument.

Finding that TSL's shipment of the order and Step-Saver's payment and acceptance demonstrated the existence of the contract, the court held the dispute involved the terms of the contract. Id. at 98.

The court resorted to U.C.C. § 2-207(3) to resolve this question:

"When the parties's conduct establishes a contract, but the parties have failed to adopt expressly a particular writing as the terms of their agreement, and the writings exchanged by the parties do not agree, UCC § 2-207 determines the terms of the contract." Step-Saver, 939 F.2d at 98.

Viewing the shrinkwrap license agreement as "a written confirmation containing additional terms," the court held the license was not part of the agreement because it would materially alter the parties' agreement. Id. at 105-06.