The sales agreement here does not conform to the requirement of the Uniform Commercial Code § 2-316(2) that any disclaimer of an implied warranty of merchantability must be made expressly, specifically reciting the word "merchantability". This was not done here; it merely states that there are no implied warranties.
The jury also found that Union Carbide knew or had reason to know of Neville's particular purpose in purchasing U-171, and that Neville relied upon Carbide to furnish material suitable for this purpose and thus an implied warranty of fitness for the purpose existed which was breached by Union Carbide.
In connection with this warranty, we believe that the disclaimer is insufficient to relieve Union Carbide of this warranty. The written contract in this case was executed about two years after the parties began their dealing in this product, a course of dealing had been established. The evidence showed many attempts to supply a product suited to Neville's needs. The typewritten portion of the sales agreement reduced to writing certain terms of price, quantities, delivery and certain limitations on physical properties. The printed portion of the contract contains the alleged limitations on the reverse side, in uniform size print, no more conspicuous than the other provisions. § 2-316(2) of the Uniform Commercial Code requires a disclaimer of a warranty of fitness to be "conspicuous". This imparts something that stands out from, in a fashion to draw attention to it, the other printing on the form.
In any event, warranties under the Uniform Commercial Code § 2-317 are cumulative, unless such a construction is unreasonable. We find nothing inconsistent or unreasonable in implied warranties of merchantability and fitness and express warranties of sale by sample construed together.
We do not find that the provisions of "Appendix A" of the sales agreement between the parties, entitled "Specifications -- Resin Intermediate U-171" meet the definition of "Exact or Technical Specifications" as used in § 2-317(a) or the situation of Comment 9 to § 2-316 which applies to "The situation in which the buyer gives precise and complete specifications to the seller * * *.". The specifications set forth in Appendix A refer only to the "Limits" of four qualities of the resin intermediate -- color, solubility, aniline point, and polymerizable content. This is in no sense "exact specifications" or "precise and complete specifications" which would displace an inconsistent sample, or an inconsistent implied warranty of merchantability.
Plaintiff's claim was based upon allegations of negligence as well as breach of warranty, and the jury's verdict supports this claim.
The disclaimer set forth in Par. 7 of the agreement does not specifically disclaim liability for negligence. Such disclaimers are closely scrutinized by the courts when asserted as exculpating from liability for negligence. Dilks v. Flohr Chevrolet, 411 Pa. 425, 192 A.2d 682 . They are construed strictly against any party seeking their protection. Crew v. Bradstreet, 134 Pa. 161, 19 A. 500, 7 L.R.A. 661. They must spell out the intention of the parties with the greatest particularity. Morton v. Ambridge Borough, 375 Pa. 630, 101 A.2d 661 .
In Morton v. Ambridge Borough, supra, the Court noted that nowhere in the disclaimer clause did the word "negligence" or any of its cognates appear. Thus it was held that while the disclaimer would apply to damages for trespass on land, it did not impair the normal right to recover for damages suffered as a result of negligence.
This strict limitation on disclaimers of liability for damages for negligence is a social development of recent years and is strongly emphasized in many recent decisions of the Supreme Court of Pennsylvania. Dilks v. Flohr Chevrolet, supra ; Pittsburgh Steel Co. v. Patterson-Emerson-Comstock, Inc., 404 Pa. 53, 171 A.2d 185 ; Employers Liability Assurance Corp. v. Greenville Businessmen's Assoc., 423 Pa. 288, 224 A.2d 620  and Galligan v. Arovitch, 421 Pa. 301, 219 A.2d 463 . Because of this strongly reiterated statement of public policy, we do not consider cases of earlier vintage on the effect of such disclaimers to be of valid current authority. Cf. Shafer v. Reo Motors, 205 F.2d 685 [3rd Cir., 1953] and Charles Lachman Co. v. Hercules Powder Co., 79 F. Supp. 206 [E.D.Pa., 1948].
III. DAMAGES FOR SETTLEMENT OF CUSTOMER CLAIMS
Defendant attacks the adequacy of plaintiff's proof of liability to its own customers, the reasonableness of such settlements and the charge of the court thereon. Defendant argues that since the jury found plaintiff not guilty of negligence, it should follow that its own liability to its customers would be under its warranties to its customers. It is noted that plaintiff sold to its customers under a printed warranty, with disclaimers, similar to that contained in the sales agreement between plaintiff and defendant.
Defendant argues that there is no evidence that plaintiff was held legally liable to its customers, and that at best it settled customer claims on advice of counsel. This alone would not be enough. Martinique Shoes Inc. v. New York Progressive Wood Heel Co., 207 Pa.Super. 404, 217 A.2d 781 . The above case cites the Pennsylvania rule as that cited in 42 C.J.S. Indemnity § 25.
"Thus, while a person who is liable for injuries caused by the negligence or wrongful act of another may adjust and pay the claim therefor and need not await the result of a suit in order to be entitled to indemnity from the wrongdoer, the amount claimed must be reasonable and just, and the payment must have been made in good faith, after notice to the indemnitor; and a person so paying assumes the risk, in an action against the wrongdoer for indemnity, of being able to prove the actionable facts on which his liability depends as well as the reasonableness of the amount which he pays".
While the Martinique case denied indemnity to the plaintiff, the opinion in that case reveals that an essential element of plaintiff's liability to its customer was not proven.
"However, how Mrs. Witt's accident happened was not proved." [p. 407, 217 A.2d p. 782].