The National Academies Press

Currently Skimming:

Pages 10-16

The Chapter Skim interface presents what we've algorithmically identified as the most significant single chunk of text within every page in the chapter.
Select key terms on the right to highlight them within pages of the chapter.

From page 10... ... 10 supplies, the estimated cost of which exceeds the sum of ten thousand dollars, shall be made by the authority only upon public letting founded on sealed bids….89 Another New York statute provides that, except as otherwise stated, all purchase contracts for supplies, materials or equipment involving an estimated expenditure in excess of one hundred thousand dollars and all contracts for public work involving an estimated expenditure in excess of one hundred thousand dollars shall be awarded by the authority to the lowest responsible bidder….90 However, there are several instances in New York when a transit authority may declare that competitive bidding is inappropriate, including when "the authority wishes to experiment with or test a new product or technology or evaluate the service or reliability of a new source for a particular product or component…."91 In Virginia, the Virginia Information Technologies Agency (VITA) is responsible for procuring IT and telecommunications goods and services of every description for VITA's benefit or on behalf of other state agencies and institutions, as well as other agencies or institutions to the extent authorized by VITA.92 Virginia's statute requires that all statewide contracts and agreements made by VITA for the purchase of communications services, telecommunications facilities, and IT goods and services must "provide for the inclusion of counties, cities, and towns…."93 Localities, unless otherwise prohibited, "are authorized to purchase information technology goods and services of every description from VITA and its vendors…."94 IV. Read the entire page →
From page 11... ... 11 deliver timely the promised software developments, and because SEI would not allow Monsanto to review its source code, Monsanto terminated SEI's services.98 A federal district court in Minnesota, applying Missouri law,99 ruled first that Monsanto's counterclaims stated plausible claims for breach of contract, money had and received, and fraudulent and negligent inducement.100 The court agreed also that Monsanto's counterclaim was sufficient to state a claim for conversion of Monsanto's IP.101 In System Automation Corp. Read the entire page →
From page 12... ... 12 implied renewal of a contract, excused performance, and failure to pursue required administrative remedies. As discussed in part B.5 in the next section, when parties have disputes arising under a technology contract, the economic loss doctrine in some cases may preclude the joinder of tort claims with contract claims. Read the entire page →
From page 13... ... 13 Likewise, in Simulados Software, LTD v. Photon Infotech Private, LTD,132 Simulados Software, LTD (Simulados) Read the entire page →
From page 14... ... 14 seller at the time of contracting has reason to know any particular purpose for which the goods are required and that the buyer is relying on the seller's skill or judgment to select or furnish suitable goods, there is unless excluded or modified under the next section an implied warranty that the goods shall be fit for such purpose.149 Moreover, the UCC provides that, unless excluded or modified by section 2-316, "other implied warranties may arise from course of dealing or usage of trade."150 Two important implied warranties are the UCC's warranty of title and warranty against infringement. Under UCC section 2-312, a seller warrants in a sales contract that "the title conveyed shall be good, and its transfer rightful" and that "the goods shall be delivered free from any security interest or other lien or encumbrance of which the buyer at the time of contracting has no knowledge."151 The warranty may be "excluded or modified only by specific language or by circumstances which give the buyer reason to know that the person selling does not claim title in himself or that he is purporting to sell only such right or title as he or a third person may have."152 Furthermore, unless the parties have agreed to the contrary, "a seller who is a merchant regularly dealing in goods of the kind warrants that the goods shall be delivered free of the rightful claim of any third person by way of infringement or the like but a buyer who furnishes specifications to the seller must hold the seller harmless against any such claim which arises out of compliance with the specifications."153 As one commentator explains, "[i] Read the entire page →
From page 15... ... 15 Second, a transit agency may negotiate for the recovery of foreseeable damages that are within the contemplation of the parties at the time of contracting (e.g., a special hazard) that are not limited to or excluded by the contract.165 Third, the parties may agree that "substitution costs," similar to the UCC's concept of cover, are recoverable.166 UCC section 2-712(1) Read the entire page →
From page 16... ... 16 contract claim," the doctrine may not apply when a defendant had an "independent tort" duty to the plaintiff.187 Thus, when there is "a duty of care independent of any contractual obligations, the economic loss rule has no application and does not bar a plaintiff 's tort claim, because the claim is based on a recognized independent duty of care and thus falls outside the scope of the economic loss rule."188 Fourth, the economic loss rule does not apply, and a tort action may be brought when "a defective product causes physical harm to a person or to property other than [to] the product itself" that is the subject of the parties' contract.189 When other property is damaged by a breach of contract, the "‘other property' damage…triggers tort liability."190 However, the economic loss rule may preclude tort claims when the other property that was damaged was part of an "integrated system," a principle adopted by most states in connection with the economic loss rule.191 When there is physical harm to an integrated system, only damages for economic losses are recoverable for the product or integrated system that is the subject of the parties' contract; there is no additional remedy in tort.192 In sum, the economic loss doctrine "does not provide a ‘clear and predictable limit to liability'"; however, obtaining a "recovery in tort actions for purely economic losses is often difficult to obtain."193 C Read the entire page →

From page 10...

... 10 supplies, the estimated cost of which exceeds the sum of ten thousand dollars, shall be made by the authority only upon public letting founded on sealed bids….89 Another New York statute provides that, except as otherwise stated, all purchase contracts for supplies, materials or equipment involving an estimated expenditure in excess of one hundred thousand dollars and all contracts for public work involving an estimated expenditure in excess of one hundred thousand dollars shall be awarded by the authority to the lowest responsible bidder….90 However, there are several instances in New York when a transit authority may declare that competitive bidding is inappropriate, including when "the authority wishes to experiment with or test a new product or technology or evaluate the service or reliability of a new source for a particular product or component…."91 In Virginia, the Virginia Information Technologies Agency (VITA) is responsible for procuring IT and telecommunications goods and services of every description for VITA's benefit or on behalf of other state agencies and institutions, as well as other agencies or institutions to the extent authorized by VITA.92 Virginia's statute requires that all statewide contracts and agreements made by VITA for the purchase of communications services, telecommunications facilities, and IT goods and services must "provide for the inclusion of counties, cities, and towns…."93 Localities, unless otherwise prohibited, "are authorized to purchase information technology goods and services of every description from VITA and its vendors…."94 IV.

Read the entire page →

From page 11...

... 11 deliver timely the promised software developments, and because SEI would not allow Monsanto to review its source code, Monsanto terminated SEI's services.98 A federal district court in Minnesota, applying Missouri law,99 ruled first that Monsanto's counterclaims stated plausible claims for breach of contract, money had and received, and fraudulent and negligent inducement.100 The court agreed also that Monsanto's counterclaim was sufficient to state a claim for conversion of Monsanto's IP.101 In System Automation Corp.

Read the entire page →

From page 12...

... 12 implied renewal of a contract, excused performance, and failure to pursue required administrative remedies. As discussed in part B.5 in the next section, when parties have disputes arising under a technology contract, the economic loss doctrine in some cases may preclude the joinder of tort claims with contract claims.

Read the entire page →

From page 13...

... 13 Likewise, in Simulados Software, LTD v. Photon Infotech Private, LTD,132 Simulados Software, LTD (Simulados)

Read the entire page →

From page 14...

... 14 seller at the time of contracting has reason to know any particular purpose for which the goods are required and that the buyer is relying on the seller's skill or judgment to select or furnish suitable goods, there is unless excluded or modified under the next section an implied warranty that the goods shall be fit for such purpose.149 Moreover, the UCC provides that, unless excluded or modified by section 2-316, "other implied warranties may arise from course of dealing or usage of trade."150 Two important implied warranties are the UCC's warranty of title and warranty against infringement. Under UCC section 2-312, a seller warrants in a sales contract that "the title conveyed shall be good, and its transfer rightful" and that "the goods shall be delivered free from any security interest or other lien or encumbrance of which the buyer at the time of contracting has no knowledge."151 The warranty may be "excluded or modified only by specific language or by circumstances which give the buyer reason to know that the person selling does not claim title in himself or that he is purporting to sell only such right or title as he or a third person may have."152 Furthermore, unless the parties have agreed to the contrary, "a seller who is a merchant regularly dealing in goods of the kind warrants that the goods shall be delivered free of the rightful claim of any third person by way of infringement or the like but a buyer who furnishes specifications to the seller must hold the seller harmless against any such claim which arises out of compliance with the specifications."153 As one commentator explains, "[i]

Read the entire page →

From page 15...

... 15 Second, a transit agency may negotiate for the recovery of foreseeable damages that are within the contemplation of the parties at the time of contracting (e.g., a special hazard) that are not limited to or excluded by the contract.165 Third, the parties may agree that "substitution costs," similar to the UCC's concept of cover, are recoverable.166 UCC section 2-712(1)

Read the entire page →

From page 16...

... 16 contract claim," the doctrine may not apply when a defendant had an "independent tort" duty to the plaintiff.187 Thus, when there is "a duty of care independent of any contractual obligations, the economic loss rule has no application and does not bar a plaintiff 's tort claim, because the claim is based on a recognized independent duty of care and thus falls outside the scope of the economic loss rule."188 Fourth, the economic loss rule does not apply, and a tort action may be brought when "a defective product causes physical harm to a person or to property other than [to] the product itself" that is the subject of the parties' contract.189 When other property is damaged by a breach of contract, the "‘other property' damage…triggers tort liability."190 However, the economic loss rule may preclude tort claims when the other property that was damaged was part of an "integrated system," a principle adopted by most states in connection with the economic loss rule.191 When there is physical harm to an integrated system, only damages for economic losses are recoverable for the product or integrated system that is the subject of the parties' contract; there is no additional remedy in tort.192 In sum, the economic loss doctrine "does not provide a ‘clear and predictable limit to liability'"; however, obtaining a "recovery in tort actions for purely economic losses is often difficult to obtain."193 C

Read the entire page →

Key Terms

← Previous Chapter Skim

Next Chapter Skim →

This material may be derived from roughly machine-read images, and so is provided only to facilitate research.
More information on Chapter Skim is available.