Sierra Diesel Injection Service, Inc. v. Burroughs Corporation

James Cathey, owner of diesel-engine servicer Sierra Diesel Injection Service (plaintiff), who had no familiarity with computers, contracts, or accounting software, relied on Burroughs Corporation's (defendant) recommendation to purchase a B-80 computer instead of a simple posting machine for bookkeeping; the sales contract contained a warranty-disclaimer clause in all capital letters, partially bolded, but located on the back of the contract among other complex terms. When the B-80 proved incapable of performing bookkeeping functions, forcing Sierra to buy a replacement from another company, Sierra sued Burroughs for breach of warranty; the district court found the disclaimer not conspicuous and the warranties not excluded, and Burroughs appealed.