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IBM Corp. v. Catamore Enterprises, Ine., 548 F.2d 1065 (1st Cir. 1976) (full-text), cert. denied, 431 U.S. 960 (1977).
Factual Background Edit
Plaintiff, a jewelry manufacturer, and IBM had entered into two oral contracts before they signed a final written agreement, the "Agreement for IBM Systems Engineering Services" (SES). The SES agreement stated that it was the complete and exclusive statement between the parties, superseding all prior negotiations. The agreement also stated that IBM would not be liable for lost profits or any other claims and should any claims arise under the agreement, they could not be brought more than one year after the cause of action had accrued.
Trial Court Decision Edit
Plaintiff sued for breaches of the oral promises made prior to the SES agreement. The claims were brought more than a year after the cause of action accrued. The jury returned a verdict for plaintiff/supplier, International Business Machines Corp., in the amount of $68,453.23 for unpaid rental and service fees against defendant/customer, Catamore Enterprises.
The jury awarded Catamore $11 million, based primarily on its finding of a breach of an oral agreement by IBM to supply programming support to Catamore.
Appellate Court Decision Edit
The plaintiff appealed the judgment on the counterclaim, asserting that as a matter of law, there was no basis for a finding of liability.
The court held that the oral agreement had been integrated in a subsequent written contract containing a one-year limitation of liability clause. Since Catamore failed to bring its action within the one-year period, the appellate court reversed the verdict, and the matter was remanded for a new trial.