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In this case a pipe installation company sued the pipemanufacturer and the "middleman" in the sale for the cost ofremoving and replacing allegedly defective pipe. The trial courtgranted summary judgment to both defendants. To determine therights and responsibilities of the parties we have trekkedthrough the Uniform Commercial Code. We conclude the buyer ofthe pipe is attempting to walk away from contract provisions thatlimit its remedies. For that reason, we affirm the trial court.

FACTS

On March 12, 1996, Robert-James Sales, Inc. (Robert-James),a self-described "middleman" between pipe installers and pipemanufacturers, contacted Bristol Metals, Inc. (Bristol Metals), aself-described "leading manufacturer" of stainless steel pipe, toobtain price information. The next day, Bristol Metals sentRobert-James a two-page fax quotation on 42 lengths of variouspipe, including two-inch continuous seam welded stainless steelpipe. The bottom of the second page said, "THE GENERAL TERMS ANDCONDITIONS SHOWN ON THE ATTACHED SHEET ARE INCORPORATED HEREINAND MADE A PART OF THIS QUOTATION." The quotation, as it appearsin the record, did not include an attached sheet. But, in anaffidavit, Bristol Metals' Chris Blankenship (Blankenship) saidBristol Metals always included a copy of its terms and conditionswith each quotation. According to Blankenship, "When a purchaseraccepts Bristol's Quote, Bristol then sends a Confirmationconfirming the price and quantities accepted."

On March 15, 1996, Bristol Metals sent Robert-James a two-page "ORDER CONFIRMATION" on these 42 pipe lengths. The bottomof the second page again referred to the general terms andconditions on an attached sheet. On the attached sheet, BristolMetals' general terms and conditions said:

BRISTOL METALS, INC. PRODUCTS ARE WARRANTED TO BE FREEFROM MANUFACTURING DEFECTS WITHIN THE LIMITS OFAPPLICABLE SPECIFICATIONS. WE ASSUME NO RESPONSIBILITYFOR SUITABILITY FOR INTENDED USAGE. IF AN ITEM PROVESTO BE DEFECTIVE WITHIN ONE YEAR FROM SHIPMENT, PROVIDEDIT HAS BEEN USED AS RECOMMENDED, AND IN ACCORDANCE WITHRECOGNIZED PIPING PRACTICE, AND PROVIDING IT HAS NOTBEEN WORN OUT DUE TO SEVERE CORROSIVE OR ABRASIVEOPERATING CONDITIONS, IT WILL BE REPLACED WITHOUTCHARGE. WE WILL NOT ASSUME LIABILITY FOR LABOREXPENDED, OR DAMAGES ACCRUING FROM THE USE OF MATERIALPURCHASED FROM US. IF MATERIAL IS DEFECTIVE, THE LIMITOF DAMAGE IS THE PRICE OF THE DEFECTIVE MATERIAL. THISLIMITATION OF RESPONSIBILITY TO THE VALUE OF THEPRODUCT SHIPPED APPLIES TO SPECIAL AS WELL AS STANDARDITEMS AND BRISTOL METALS, INC. MAKES NO OTHER WARRANTY,EITHER EXPRESS OR IMPLIED."

Blankenship's affidavit continued: "Because it has been along term, substantial customer, Robert-James has received manycopies of Bristol's Terms and Conditions over the years. ToAffiant's knowledge, Robert-James never objected to those Termsand Conditions." According to Blankenship, a copy of the termsand conditions was found in Robert-James' file regarding theMarch 1996 sale.

On March 18, 1996, Robert-James sent Bristol Metals apurchase order for these 42 pipe lengths. It said, "THIS ISCONFIRMATION OF A PRIOR PURCHASE ORDER." Robert-James' purchaseorder did not mention Bristol Metals' terms and conditions.

In August 1996, Intrastate Piping & Controls, Inc.(Intrastate Piping), an experienced pipe installation companywith annual revenues of around $20 million, won a contract toinstall piping at the Ashland Chemical Company (Ashland Chemical)in Calumet City, Illinois. On August 13, 1996, Intrastate Pipingcontacted Robert-James for price information on 900 feet of two-inch continuous seam welded stainless steel pipe. According toRobert-James' Robert Baldauff (Baldauff), Robert-James conveyedprice information to Intrastate Piping, and Intrastate Pipingplaced a purchase order over several telephone calls within a fewhours. In an affidavit, Intrastate Piping's John Nastav (Nastav)said "*** there was no discussion of any kind as to anylimitations of recovery or waiver of warranty by either Robert-James or Bristol Metal." There is no indication in the recordany warranties, express or implied, were discussed.

Once Intrastate Piping placed a purchase order, Robert-Jamesgenerated its August 13 sales order acknowledgment. The frontside of this form said, "SEE REVERSE SIDE FOR TERMS ANDCONDITIONS OF SALE." The back side, under the heading"Warranties," said: "[Robert-James] shall not be liable for anyconsequential, incidental, indirect or contingent damages arisingfrom use or failure of any product or otherwise." According toRobert-James' William Barto (Barto), Robert-James generated anacknowledgment "[w]hen the work order is created," and sent theacknowledgment before shipping the pipe. Barto said eachacknowledgment included Robert-James' terms and conditions andits remedy limitation, and Intrastate Piping never objected tothese terms.

Shortly after its December 1996 installation, a portion ofthe pipe began to leak. Representatives from Ashland Chemical,Intrastate Piping, Robert-James, and Bristol Metals met at theAshland Chemical plant on December 29, 1996. The next day,Robert-James and Bristol Metals agreed to supply 900 feet ofreplacement pipe, more than enough to repair the leaky segments. Over the next six to eight weeks, Intrastate Piping removed thedefective pipe and installed the replacement pipe, allegedlyincurring over $200,000 in labor costs. Intrastate Pipingdemanded Robert-James and Bristol Metals reimburse these costs. When they refused, Intrastate Piping filed a complaint againstthem.

After extensive discovery, all the parties filed summaryjudgment motions. In a May 5, 1999, MEMORANDUM AND ORDER, thetrial court granted summary judgment to Bristol Metals andRobert-James. Intrastate Piping's appeal followed.

DECISION

Summary judgment should be granted if "*** there is nogenuine issue as to any material fact and *** the moving party isentitled to a judgment as a matter of law." 735 ILCS 5/2-1005(c)(West 1998). We review de novo the trial court's decision togrant summary judgment. Murneigh v. Gainer, 177 Ill. 2d 287,298, 685 N.E.2d 1357 (1997).

Intrastate Piping insists this case involves warrantydisclaimers. The trial court reviewed the contract betweenBristol Metals and Robert-James and concluded:

"In this case, where the goods provided by Bristol aredefective, the terms and conditions of the contractlimit recovery to the price of the defective material. This is clearly a limit on remedy rather than a waiverof warranty, since it anticipates that a breach of thewarranty against defects has already occurred. It doesnot attempt to limit the warranty of merchantability bydisclaiming liability, but merely provides that Robert-James may only recover the price of the defectivematerial."

The court also reviewed the contract between Robert-Jamesand Intrastate Piping and found the terms and conditions of thesales order acknowledgment included a remedy limitation, not awarranty disclaimer: "The language of this contract speaks onlyof limiting damages for defective products; it does not attemptto waive liability for defective products."

We agree with the trial court's characterizations of the twocontracts. Both Bristol Metals' and Robert-James' terms andconditions attempted to limit remedies in the event of liabilityfor a warranty breach; they did not attempt to avoid liability. Reibold v. Simon Aerials, Inc., 859 F. Supp. 193, 197 (E.D. Va.1994); see Sorce v. Naperville Jeep Eagle, Inc., 309 Ill. App. 3d313, 326, 722 N.E.2d 227 (1999)(limitation of damages anddisclaimer of warranties are distinct matters); see also 810 ILCSAnn. 5/2-316, Uniform Commercial Code Comment 2, at 230 (Smith-Hurd 1993)(noting remedy limitations are not governed by the codesection on warranty disclaimers).

Before addressing the substance of these remedy limitations,we must determine whether they were part of the contracts in thiscase.

The Uniform Commercial Code does not prevent a remedylimitation from operating against a "downstream" buyer. See 810ILCS Ann. 5/2-318, Uniform Commercial Code Comment, at 245(Smith-Hurd 1993) ("To the extent that the contract of salecontains provisions under which *** remedies for breach arelimited, such provisions are equally operative againstbeneficiaries of warranties under this section"); Riebold, 859 F.Supp. at 196.

On March 12, 1996, Robert-James requested price informationfrom Bristol Metals. On March 13, Bristol Metals sent Robert-James a quotation, which may not have included the documentcontaining Bristol Metals' terms and conditions and its remedylimitation. The record does not reflect additional contract-forming discussions between Bristol Metals and Robert-James, butit does contain Bristol Metals' March 15 "ORDER CONFIRMATION,"which included the remedy limitation, and Robert-James' March 18purchase order, which confirmed a "prior" purchase order.

On August 13, 1996, Intrastate Piping requested priceinformation from Robert-James. After several telephone calls,Intrastate Piping placed a purchase order. Robert-James thengenerated its August 13 sales order acknowledgment, whichincluded its remedy limitation.

Under section 2-207 of the Uniform Commercial Code, whichgoverns this "battle of the forms" contest:

"(1) A definite and seasonable expression ofacceptance or a written confirmation which is sentwithin a reasonable time operates as an acceptance eventhough it states terms additional to or different fromthose offered or agreed upon, unless acceptance isexpressly made conditional on assent to the additionalor different terms.

(2) The additional terms are to be construed asproposals for addition to the contract. Betweenmerchants such terms become part of the contractunless:

(a) the offer expressly limits acceptance to theterms of the offer;

(b) they materially alter it; or

(c) notification of them has already been given oris received within a reasonable time after notice ofthem is received." 810 ILCS 5/2-207 (West 1998).

After scouring the record for evidence indicating when theparties formed their contracts, we conclude Bristol Metals andRobert-James formed a contract on March 15, 1996, when BristolMetals sent its "ORDER CONFIRMATION" containing its remedylimitation. We also conclude Robert-James and Intrastate Pipingformed a contract on August 13, 1996, when Robert-James sent itssales order acknowledgment containing its remedy limitation. Businesses routinely use written confirmations andacknowledgments to comply with the Statute of Frauds (see 810ILCS 5/2-201(2) (West 1998); Bureau Service Co. v. King, 308 Ill.App. 3d 835, 838-39, 721 N.E.2d 159 (1999)), and their tradingpartners anticipate them as part of the contract.

Even if, as Intrastate Piping contends, the parties enteredinto oral contracts before any confirmations or acknowledgmentswere sent, the additional terms in these documents--the remedylimitations--became part of the contracts by operation ofstatute. Robert-James never objected to Bristol Metals' remedylimitation, and Intrastate Piping never objected to Robert-James'remedy limitation. These clauses had appeared in contracts amongthese parties for several years, and all the parties werefamiliar with them. A remedy limitation which becomes part ofthe parties "course of dealing" (see 810 ILCS 5/1-205 (West1998)) binds the parties (see 810 ILCS 5/1-201(3) (West1998)("agreement" definition includes course of dealing); CapitolConverting Equipment, Inc. v. Lep Transport, Inc., 750 F. Supp.862, 867-68 (N.D. Ill. 1990)).

Relying on Album Graphics, Inc. v. Beatrice Foods Co., 87Ill. App. 3d 338, 408 N.E.2d 1041 (1980), Intrastate Pipingcontends the warranty disclaimers and remedy limitationsmaterially altered, and therefore never became part of, theparties' oral contracts. In Album Graphics, a cosmetics companysued its glue manufacturer for breach of warranty when a weakadhesive allowed its cosmetics packages to fall apart. Indefense, the glue manufacturer contended each of its gluecontainer labels and each of its shipping invoices bore warrantydisclaimers and remedy limitations.

On appeal, the court assumed the parties formed theircontract before delivery of the labels or the invoices. AlbumGraphics, 87 Ill. App. 3d at 345. The court then assumed thelabel and the invoices were "confirmatory memoranda" undersection 2-207. Album Graphics, 87 Ill. App. 3d at 346. But thecourt found the warranty disclaimers and the remedy limitationsdid not become part of the contract: "A term disclaimingwarranties, and we might add a term limiting remedies, isundoubtedly a term that materially alters a contract." AlbumGraphics, 87 Ill. App. 3d at 347.

The court cited section 2-207's Comment 4 (see 810 ILCS Ann.5/2-207, Uniform Commercial Code Comment 4, at 118 (Smith-Hurd1993)), which discusses only warranty disclaimers. If our caseinvolved only warranty disclaimers, Album Graphics would be morepersuasive. But, according to section 2-207's Comment 5, ignoredby the court in Album Graphics, a remedy limitation whichprovokes no objection becomes a part of the contract because aclause "limiting remedy in a reasonable manner" does not involve"unreasonable surprise" or materially alter a contract. See 810ILCS Ann. 5/2-207, Uniform Commercial Code Comment 5, at 118(Smith-Hurd 1993); see also In re Chateaugay Corp., 162 B.R. 949,956 (Bankr. S.D.N.Y. 1994). Additionally, the remedy limitationin Album Graphics appeared only when the goods were shipped, longafter the parties entered into their contract. Here, the Robert-James remedy limitation was sent the same day the parties enteredinto their contract and was received before any pipe was shipped.

Now we move to what becomes the central issue in this case:whether the remedy limitations were valid.

Section 2-719 of the Uniform Commercial Code provides:

"(1) Subject to the provisions of subsections (2)and (3) of this Section ***,

(a) the agreement may provide for remedies inaddition to or in substitution for those provided inthis Article and may limit or alter the measure ofdamages recoverable under this Article, as by limitingthe buyer's remedies to return of the goods andrepayment of the price or to repair and replacement ofnon-conforming goods or parts; and

(b) resort to a remedy as provided is optionalunless the remedy is expressly agreed to be exclusive,in which case it is the sole remedy.

(2) Where circumstances cause an exclusive orlimited remedy to fail of its essential purpose, remedymay be had as provided in this Act.

(3) Consequential damages may be limited orexcluded unless the limitation or exclusion isunconscionable. Limitation of consequential damagesfor injury to the person in the case of consumer goodsis prima facie unconscionable but limitation of damageswhere the loss is commercial is not." 810 ILCS 5/2-719(West 1998).

In remedy limitation cases, the court must make threeinquiries:

(1) whether the contract limited the remedy to repairor replacement; (2) whether, if the remedy were solimited, it failed of its essential purpose; and (3)whether, if the limited remedy failed of its essentialpurpose, consequential damages may be recovered becausetheir exclusion is unconscionable." Myrtle BeachPipeline Corp. v. Emerson Electric Co., 843 F. Supp.1027, 1041 (D.S.C. 1993); accord J.D. Pavlak, Ltd. v.William Davies Co., 40 Ill. App. 3d 1, 3-5, 351 N.E.2d243 (1976).

Illinois courts have recognized and enforced exclusiveremedy provisions, even without the word "exclusive," when thecontract as a whole warrants such a construction. OmnitrusMerging Corp. v. Illinois Tool Works, Inc., 256 Ill. App. 3d 31,34, 628 N.E.2d 1165 (1993); accord Veath v. Speciality Grains,Inc., 190 Ill. App. 3d 787, 797, 546 N.E.2d 1005 (1989); seeCogniTest Corp. v. Riverside Publishing Co., 107 F.3d 493, 498(7th Cir. 1997)("Illinois looks to whether a reasonableconstruction of the contract indicates that the parties intendeda limited remedy to be exclusive"); Schultz v. Jackson, 67 Ill.App. 3d 889, 893, 385 N.E.2d 162 (1979)("While this portion ofthe agreement is not a model of draftsmanship, we believe thislanguage is sufficient to rebut the presumption that remediesstated in the contract are cumulative to those contained in theCode.")

Here, both contracts limit the remedies available for awarranty breach. Bristol Metals' terms and conditions said, "IFMATERIAL IS DEFECTIVE, THE LIMIT OF DAMAGE IS THE PRICE OF THEDEFECTIVE MATERIAL." Robert-James' terms and conditions saidRobert-James shoulders no liability for "*** consequential,incidental, indirect or contingent damages ***." These clausesclearly excluded all remedies except direct damages--the cost ofthe pipe.

Having determined the exclusive remedy provisions limitedIntrastate Piping to the price of the replacement pipe, we turnto our next inquiry: whether the remedy limitations failed oftheir essential purpose. (Intrastate Piping does not employ thisargument against Bristol Metals.)

The Uniform Commercial Code does not delineate when a remedylimitation fails of its essential purpose, but the OfficialComment to section 2-719 gives us a persuasive clue:

"Under this section parties are left free to shapetheir remedies to their particular requirements andreasonable agreements limiting or modifying remediesare to be given effect.

However, it is of the very essence of a salescontract that at least minimum adequate remedies beavailable. If the parties intend to conclude acontract for sale within this Article they must acceptthe legal consequence that there be at least a fairquantum of remedy for breach of the obligations orduties outlined in the contract. *** [U]ndersubsection (2), where an apparently fair and reasonable clause because of circumstances fails in its essentialpurpose or operates to deprive either party of thesubstantial value of the bargain, it must give way tothe general remedy provisions of this Article." 810ILCS Ann. 5/2-719, Uniform Commercial Code Comment 1,at 488 (Smith-Hurd 1993). See AES Technology Systems,Inc. v. Coherent Radiation, 583 F.2d 933, 939 (7th Cir.1978); Interlake Packaging Corp. v. Strapex Corp., 842F. Supp. 304, 306 (N.D. Ill. 1993).

While the Uniform Commercial Code disfavors contractualprovisions which leave the non-breaching party without a remedy,it does not disfavor limits on recoverable damages. See ColeEnergy Development Co. v. Ingersoll-Rand Co., 8 F.3d 607, 611(7th Cir. 1993). We believe this includes incidental, as well asconsequential, damages.

The "essential purpose" of a damage or remedy limitation isproviding "*** the seller an opportunity to tender conforminggoods and thereby limit [its] exposure to risk for other damages,while simultaneously providing the purchaser with the benefit ofhis bargain--i.e.--conforming goods." Myrtle Beach Pipeline, 843F. Supp. at 1042.

This is not a case where the seller unreasonably delayedreplacement of the product or refused to replace it at all. SeeMyrtle Beach Pipeline, 843 F. Supp. at 1043 (collecting Federalcases which conclude "*** the limited remedy of repair orreplacement is generally held to have performed its essentialpurpose if the seller timely cures the defects"); but see AESTechnology, 583 F.2d at 940 (remedy limitation failed itsessential purpose when the seller never corrected defects in itsproduct); Custom Automated Machinery v. Penda Corp., 537 F. Supp.77, 83 (N.D. Ill. 1982)(remedy limitation failed its essentialpurpose when the seller did not correct the defects in itsproduct "within a reasonable time"). See also Riegel Power Corp.v. Voigt Hydro, 888 F.2d 1043, 1045 (4^th Cir. 1989)(supplying asix-factor test to determine whether a remedy limitation failedits essential purpose). Instead, as the trial court found,Bristol Metals and Robert-James replaced the defective materialsfree of charge: "Ultimately, the Defendants [Bristol Metals andRobert-James] went above and beyond their contractual duty byreplacing not just the defective pipe, but all of the pipe."

Again, we agree with the trial court. Robert-James andBristol Metals, mere weeks after Intrastate Piping discovered theleak, replaced not only the defective pipe, but all 900 feet ofpipe. Because Intrastate Piping received the only remedy towhich it was entitled under the contracts--the benefit of itsbargain, non-defective pipe--the remedy limitations here did notfail of their essential purpose.

Having found the remedy limitations did not fail of theiressential purpose, we briefly consider section 2-719(3) and theissue of whether this limitation was unconscionable. See Frank'sMaintenance & Engineering, Inc. v. C.A. Roberts Co., 86 Ill. App.3d 980, 989, 408 N.E.2d 403 (1980). We note Intrastate Pipingdoes not press an unconscionability argument. See Sorce, 309Ill. App. 3d at 325. Intrastate Piping, Robert-James, andBristol Metals were sophisticated businesses, capable ofprotecting their own interests--and appropriately allocatingrisks--in the bargaining process. That is what they did. SeeCogniTest, 107 F.3d at 499; AES Technology, 583 F.2d at 939;Lefebvre Intergraphics, Inc. v. Sanden Machine, Ltd., 946 F.Supp. 1358, 1372 (N.D. Ill. 1996). The remedy limitations werenot unconscionable.

CONCLUSION

The trial court correctly granted summary judgment toBristol Metals and Robert-James. We affirm.

Affirmed.

CAHILL, P.J., and CERDA, J., concur.