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KEYSTONE AERO. CORP. v. R. J. ENSTROM CORP.

August 16, 1973

KEYSTONE AERONAUTICS CORPORATION, a corporation, Plaintiff,
v.
R. J. ENSTROM CORPORATION, a corporation, Defendant and Third-Party Plaintiff, v. FOUNDRY ALLIED INDUSTRIES, INC., a corporation, Third-Party Defendant


McCune, District Judge.


The opinion of the court was delivered by: MCCUNE

McCUNE, District Judge.

 This litigation arose out of the crash of a helicopter sold by the defendant to the plaintiff.

 The matter is now before the court on defendant's motion for summary judgment. The central question presented is whether strict liability imposed by § 402A Restatement, (Second), Torts, may be waived in a commercial contract between two corporations for the sale of goods.

 The front page of the purchase agreement contained the following provision:

 
"Customer takes 'AS IS' without warranty of any kind except will convey good title."

 On the back of the purchase agreement a standard warranty provision had been deleted and the following language inserted instead:

 
"The R. J. Enstrom Corporation will be held harmless of any liability in connection with sale.
 
"Sale of these helicopters is unconditional and no warranty of any kind is made or implied."

 On September 23, 1970, helicopter No. 46 crash landed while being flown by a Keystone employed pilot. The pilot was uninjured but the aircraft was substantially damaged.

 At the request of the Federal Aviation Agency, which investigated the crash, Keystone removed helicopters No. 24 *fn2" and 34 from service until the cause of the crash could be determined and the helicopters inspected to detect similar faults and correct them. During the interim Keystone apparently leased other helicopters in order to carry out its contractual commitments with clients.

 Keystone subsequently brought this suit seeking damages on the theories of negligence, breach of warranty *fn3" and strict liability under § 402A of the Restatement, (Second), Torts. Keystone seeks to recover the cost of parts and repair of No. 46, as well as damages for the amount of lost profits while it was not in use. Keystone also seeks to recover for lost profits and the costs of leasing replacements for the two grounded but undamaged helicopters.

 Enstrom has moved for summary judgment arguing that under the terms of the contract Keystone is entitled to no damages as a matter of law. Both parties agree that there are no material facts in dispute and that on ...


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