Judge Refuses To Enforce Terms And Conditions That Were Not Attached To The Agreement

In January 2013, an Argentinean equipment manufacturer sent a Pittsburgh-area buyer a written offer to sell the buyer a specific list of equipment.

About two weeks later, in February 2013, the buyer accepted the manufacture's offer by sending the manufacturer a purchase order for the specific list of equipment contained in the manufacture's January 2013 offer. Thus, a February 2013 purchase agreement was formed between the parties.

The purchase agreement obligated the manufacturer to deliver the purchased equipment by a certain date and the buyer to make the agreed upon payment for the equipment.

The buyer made the required payment, but the manufacturer failed to deliver the equipment by the agreed upon due date.

Buyer sues manufacturer in Pennsylvania

In July 2014, the buyer filed suit against the manufacturer in Pennsylvania--presumably, because Pennsylvania was the most convenient venue for the buyer, who was based in the Pittsburgh, Pennsylvania area. In the suit, the buyer claimed that the manufacturer breached the February 2013 purchase agreement by failing to deliver the equipment by the agreed upon due date.

In response, the manufacture claimed that the parties' February 2013 agreement included the following governing law provision:

This contract shall be governed by and construed in accordance with the laws of the State of Texas, and the parties agree to submit to the personal jurisdiction of any court of law in the state of Texas any controversy or claim arising out of or relating to this agreement.

This governing law provision, the manufacturer claimed, required all litigation arising from the agreement to occur in Texas, not in Pennsylvania.

Did the February 2013 agreement contain this governing law provision?

The trial court ended up agreeing with the manufacturer's claim, and, as a result, refused to hear the buyer's case.

In effect, this would have meant that, if the buyer still wished to litigate, the buyer would have then been forced to file the suit in Texas instead.

But the buyer disagreed with the trial court's finding--that the February 2013 agreement contained this governing law provision. So, rather than accepting the trial court's ruling and filing suit in Texas instead, the buyer appealed the ruling to the the Superior Court of Pennsylvania.

Accordingly, in February 2016, the court was asked on appeal to decide whether the February 2013 purchase agreement had included a governing law provision.

The manufacturer's argument

The manufacturer had made multiple offers to the buyer between early December 2012 and late January 2013. Some of those early offers included the manufacturer's standard terms and conditions as an attachment; and the subsequent offers which did not include that same attachment incorporated those terms and conditions by reference.

Thus, the manufacturer argued, when the buyer eventually accepted one of those offers, the manufacturer's standard terms and conditions became part of the agreement that was formed.

Because the governing law provision at issue was contained only in that separate terms and conditions document, the question of whether that separate terms and conditions document had become part of the February 2013 agreement was pivotal...