Hydraform Products Corporation v. American

The defendant, American Steel & Aluminum Corporation, appeals from the judgment entered on a jury verdict against it. The plaintiff, Hydraform Products Corporation, brought this action for direct and consequential damages based on claims of negligent misrepresentation and breach of a contract to supply steel to be used in manufacturing woodstoves. American claims that prior to trial, the Superior Court (Nadeau, J.) erroneously held that a limitation of damages clause was ineffective to bar the claim for consequential damages. American further claims, inter alia, that the Trial Court (Delianis, J.) erred (a) in allowing the jury to calculate lost profits on the basis of a volume of business in excess of what the contract disclosed and for a period beyond the year in which the steel was to be supplied; (b) in allowing the jury to award damages for the diminished value of the woodstove division of Hydraform's business; (c) in failing to direct a verdict for the defendant on the misrepresentation claim; and (d) in allowing Hydraform's president to testify as an expert witness. We hold that the trial court properly refused to enforce the limitation of damages clause, but we sustain the other claims of error and reverse the judgment. Hydraform was incorporated in 1975 and began manufacturing and selling woodstoves in 1976. During the sales season of 1977-78 it sold 640 stoves. It purchased steel from a number of suppliers until July 1978, when it entered into a ""trial run"" contract with American for enough steel to manufacture 40 stoves. Upon delivery of the steel, certain of Hydraform's agents and employees signed a delivery receipt prepared by American, containing the following language: