attempted to alter the contract but was rebuffed by IBM.
Although with hindsight the terms of Vanguard's contract with IBM seem somewhat one-sided, both Vanguard and its president, Albert Epprecht, had sufficient experience in the industry to comprehend fully the terms of the bargain. The doctrine of unconscionability was not intended to relieve experienced merchants from misfortunes occasioned by their poor business judgments. Vanguard made a bad bargain, but I do not have the power to correct its mistake.
Plaintiff also relies upon the implied covenant of good faith and fair dealing which plaintiff claims should be viewed as part of every contract. In support of his position plaintiff cites a number of construction contract cases in which contractors were awarded damages due to the other parties' breach of their obligation not to impede or hinder the contractors in performance of their obligations. See, e.g., North Shore Sewer & Water, Inc. v. Corbetta Const. Co., 395 F.2d 145 (7th Cir. 1968); Fairbanks Builders, Inc. v. Morton DeLima, Inc., 483 P.2d 194 (Alaska 1971).
The general duty not to hinder or delay, however, can be disclaimed by an exculpatory clause that prohibits claims for delay damages. Kalisch-Jarcho, Inc. v. City of New York, 58 N.Y.2d 377, 448 N.E. 2d 413, 461 N.Y.S.2d 746 (N.Y. 1983). Although public policy might prohibit an exculpatory clause from insulating a party from liability for intentional wrong doing or grossly negligent conduct, such a clause would "have little purpose if it were not read to extend acceptability to a range of unreasonable [conduct]." 448 N.E. 2d at 416.
Plaintiff has neither claimed nor proven that IBM's conduct with respect to the gauges constituted gross negligence or intentional wrong doing. I find, therefore, that to whatever extent IBM's conduct, vis-a-vis the gauges, delayed or hindered Vanguard in the performance of its contract, IBM cannot be held liable for that conduct due to its disclaimer of warranties concerning the gauges.
Judgment will therefore be entered against plaintiff and for IBM as to all of plaintiff's claims for damages arising out of IBM's consignment of gauges to Vanguard.
Plaintiff has made an additional claim for damages unrelated to the gauges. Plaintiff claims that while Vanguard was in the process of filling an IBM purchase order for 500 assemblies (purchase order No. A 173344 830 S), IBM made several engineering changes which forced Vanguard to scrap more than 500 parts it had already machined to conform to IBM's original specifications.
Regardless of how many parts Vanguard was forced to scrap, IBM's responsibility cannot extend beyond the 500 parts requested in the purchase order. If Vanguard chose to manufacture parts not yet on order, it cannot claim damages when its customer orders parts which do not correspond to those Vanguard, on its own, decided to produce. By producing parts before receiving an order, Vanguard assumed the risk that the orders it anticipated would not be forthcoming.
Epprecht testified that IBM's engineering changes forced Vanguard to scrap more than 500 parts. Documentary evidence submitted by plaintiff in support of his position, however, shows that Vanguard waited almost two years before requesting that IBM pay for the scrapped parts. IBM has presented testimony and documentary evidence that the parts delivered in accordance with the purchase order at issue were inspected to the specifications that existed before IBM made its engineering change. See Ex. T.D-13 and T.D-669. Since IBM was inspecting the parts according to the older engineering specifications, there was no reason for Vanguard to scrap parts made to satisfy those older specifications. I therefore find that plaintiff has not sustained its burden of proving that Vanguard scrapped 500 parts due to IBM's engineering change.
Plaintiff admits that Vanguard is obligated to return all tools and gauges that it received from IBM. Accordingly, I conclude that any such tools or gauges are the property of IBM and must be returned.
Similarly, plaintiff admits that it is holding an undetermined number of printhead assemblies which IBM returned for reworking and for which IBM has already paid. Accordingly, plaintiff must give IBM all such parts or return the money received for such parts.
Finally, IBM seeks recovery for the costs it incurred in reworking nonconforming assemblies it received from Vanguard. A party is entitled to recover the cost incurred to perform work which was the responsibility of another party to perform. United States v. Klefstad Engineering Co., 324 F. Supp. 972, 976 (W.D. Pa. 1971). I conclude that IBM is therefore entitled to receive all costs incurred to rework nonconforming parts delivered by Vanguard. The evidence submitted by IBM shows those costs to have been $5,026.74.
An appropriate order follows.
O R D E R
AND NOW, this 18th day of October, 1985, it is hereby ORDERED AS FOLLOWS:
1. Judgment is entered AGAINST PLAINTIFF and IN FAVOR OF DEFENDANT in the amount of $5,026.74.
2. Plaintiff SHALL RETURN all tools and gauges that it received from defendant to be used in the production of the printhead assemblies.
3. Plaintiff SHALL EITHER RETURN all of the printhead assemblies in its possession for which defendant has paid OR RETURN the money it has received for such parts.