Step-Saver Data Systems, Inc. v. Wyse Technology

Step-Saver Data Systems, Inc. (plaintiff) bought computer terminals from Wyse Technology (defendant) and multi-user software from The Software Link (TSL) to build a multi-user system for professional offices, but customers complained the systems malfunctioned and neither Wyse nor TSL fixed the problems. Step-Saver sued for breach of the implied warranties of merchantability and fitness for a particular purpose. At trial, Wyse presented evidence that over a million of its terminals had been sold and outsold competitors, that Step-Saver itself had tested the terminals before finalizing its system configuration, and that the terminals worked with hundreds of other software programs -- with no evidence the specific TSL software incompatibility reflected a general merchantability problem. The district court directed a verdict for TSL on the implied-warranty claim, declined to instruct the jury on the merchantability claim, and the jury found for Wyse on the fitness-for-particular-purpose claim; Step-Saver moved for a new trial, challenging the refusal to instruct on merchantability.