Opinion ID: 767431
Heading Depth: 2
Heading Rank: 1

Heading: existence of contract

Text: 9 Prior to the theft of the golf balls, Dunlop contracted with NNR on 47 separate occasions for the importation of its goods. For each transaction, NNR sent Dunlop an invoice identical in its terms and conditions. INA argues, however, that it should not be held to the liability limit of $50 contained in the invoice as the limitation term was not a part of Dunlop's oral agreement with NNR. In so doing, INA asks us to disregard the invoices sent by NNR to Dunlop. 10 Liability is a term inherent to shipping contracts. See In re CFLC, Inc., 166 F.3d 1012, 1018 (9th Cir. 1999). We have thus tacitly approved the use of a course of dealing analysis in interpreting such contracts where the agreement is silent with respect to liability. See id. Today we rule that invoice terms and conditions may supplement shipping agreements if there has been a sufficient course of dealing and thereby, find that INA is subject to the terms and conditions of the invoice for the stolen golf balls. In enforcing the $50 liability limit, we are in consonance with our sister circuits. See e.g. Capitol Converting Equip. Inc. v. LEP Trans., Inc., 965 F.2d 391, 395-96 (7th Cir. 1992) (upholding a liability limit contained in an invoice); Calvin Klein Ltd. v. Trylon Trucking Corp., 892 F.2d 191, 195-96 (2d Cir. 1989) (enforcing the liability terms of an invoice); Transamerica Oil Corp. v. Lynes, Inc., 723 F.2d 758, 764-65 (10th Cir. 1983) (ruling that invoice provisions are relevant in defining a contract); Alcoa Steamship Co. v. Charles Ferran & Co., 383 F.2d 46, 54-55 (5th Cir. 1967), cert. denied, 393 U.S. 836 (1968) (upholding a limitation of liability clause in an invoice delivered upon completion of the contract). 11 A course of dealing is a sequence of previous conduct between the parties to a particular transaction which is fairly to be regarded as establishing a common basis of understanding for interpreting their expressions and other conduct. Cal. Com. Code S 1205(1) (1964). An inference of the parties' common understanding that is based upon a prior course of dealing is a question of fact. See In re CFLC, Inc., 166 F.3d at 1017. Although INA contends that the invoice did not modify the terms of the oral contract, we do not conflate a course of dealing inquiry with a material alterations analysis where, as here, a transaction in goods is not at issue. See UCC S 2102 (West 1999). 12 The germane inquiry is whether Dunlop's receipt of 47 identical invoices for 47 separate transactions is sufficient to constitute a course of dealing. We find our analysis with respect to bills of lading most instructive because, like invoices, they can serve the dual purpose of billing customers and stipulating terms and conditions. In ascertaining the volume of transactions necessary to presume a familiarity with the terms contained in a bill of lading, we have found a course of dealing based on the receipt of three to four bills of lading with identical limitation of liability terms. See Royal Ins. Co. v. Sea-Land Serv. Inc., 50 F.3d 723, 727 (9th Cir. 1995). Consistent with this reasoning, we find that 47 identical invoices sent by NNR over a period of three years put Dunlop on notice of the terms and conditions contained in them. 13 INA contends that actual knowledge of the $50 liability limit should be a determinative factor in whether we enforce the invoice term. In doing so, INA mistakenly relies on a district court case, Independent Mach. v. Kuehne & Nagel, Inc., 867 F. Supp. 752 (N.D. Ill. 1994). The court, in enforcing a liability limit based on as few as five prior dealings, notes that Independent Machinery was aware of the invoice terms. See id. at 765. In its analysis, however, the court also emphasizes that the course of dealing should have put Independent Machinery on notice of the terms irrespective of whether it had actual knowledge: 14 [Independent Machinery] would be hard-pressed to [profess ignorance] with any credibility: Each invoice has a legend in capital letters and red print referring the reader to the terms and conditions on the reverse side, and each of the relevant clauses appears on the reverse side in a readily readable (though very small) typeface and is preceded by its title . . . in bold (though again small) print . . . 15 Id. The invoices sent by NNR to Dunlop likewise state, NNR handles shipments subject to the terms and conditions set forth on the reverse side of this invoice and the reverse side is entitled in bold letters, TERMS AND CONDITIONS OF SERVICE (Please Read Carefully). Each of the clauses on the reverse side is, moreover, explained in clear language and is preceded by a readily identifiable title. We therefore presume INA's knowledge of the terms based on the prior dealings. 16