Office Supply Co., Inc. v. Basic/Four Corp.

*778 DECISION AND ORDER

This is an action for damages brought pursuant to 28 U.S.C. § 1332. The plaintiff Office Supply Co., Inc. (“Office Supply”) is a corporation located in Racine, Wisconsin, which sells office supplies. The defendant Basic/Four Corporation (“Basic/Four”) is a California corporation which manufactures and sells computer hardware and software. In 1975, Office Supply purchased computer hardware and leased computer software from Basic/Four. Office Supply claims that the system was defective and caused it to suffer substantial losses. It seeks compensation for “lost customers, income, good will and executive time and incurred additional hardware and software expense, office form expense, personnel expense and maintenance expense, all to its damage in the sum of $186,000 plus reasonable interest since April, 1975.” (Complaint, paragraph NINTH.)

Presently pending before the Court are the defendant’s motion for summary judgment, the plaintiff’s motion for partial summary judgment, and the plaintiff’s motion to compel answers to interrogatories and for compliance with a demand for the production of documents. For the following reasons the plaintiff’s motions will be denied and the defendant’s motion for summary judgment will be granted.

The Summary Judgment Motions

On January 31,1975, the plaintiff’s president, James F. Bruno, signed a contract for the purchase of computer hardware from the defendant and of computer software which was intended to control order processing, inventory control, sales analysis, and accounts receivable. 1 Mr. Bruno mailed the contract to the defendant, and it was accepted by the defendant’s assistant treasurer, R. C. Trost, on February 7, 1975. On April 1, 1975, the hardware was installed. In a letter dated May 22, 1975, the defendant advised the plaintiff that the warranty on the hardware would expire on July 1, 1975. The input of data on the software programs took longer to complete, and for a period of time the plaintiff ran parallel operations on the computer and manually as a check on the accuracy of the software applications. In a letter dated October 6, 1975, Mr. Bruno advised Basic/Four:

“All of the applications anticipated by our company in agreeing to acquire our BASIC/FOUR System are complete and the system appears to be satisfactory. This fulfills your contractual obligation.

“Although the applications programs appear to be operating satisfactorily, some ‘defects’ might become apparent [sic] later. (Defects might comprise misinterpretation of data, mishandling of a keyboarding error, or a confusing operator instruction — but would not include anything beyond the scope of the system design specification.) It is my understanding that you warrant your programs, when used in accordance with Basic/Four operating instructions, to be free from ‘defects’ for a period of ninety days, and that you will correct such ‘defects’ promptly when they are brought to your attention.” (Exhibit E to defendant’s memorandum in support of motion for summary judgment, filed December 15, 1981.)

Basic/Four took the position that its warranty on the software expired on January 6, 1976. As to complaints received after that date from Office Supply, it did continue to work with Office Supply in an effort to correct any claimed defects in the computer system. Office Supply also hired Ted Templeton, an independent programmer with a company called Computer Methods, Inc., who was recommended by Basic/Four, to work on its Basic/Four system starting some time after Basic/Four advised that the warranty period was over. The record established that Mr. Templeton made some modifications in the Basic/Four software. He also added at least one new program, *779 the ABC program which involved inventory control, to the system. Starting in January 1978, Office Supply also hired a programmer, Marc Jerome, as a fulltime employee. He found what he claims were three major defects in the software system. The record establishes that two of those defects were in programs which Basic/Four did not supply to the plaintiff. The third defect was in the UJ portion of the Basic/Four accounts receivable program, but there is no evidence that the defect arose in the UJ program until after July 1976, which was after the end of the ninety-day period during which Basic/Four continued to warrant its software applications to be free from defects.

The plaintiff’s vice president, David Carlson, testified during his deposition that starting at the end of October 1975 and continuing through early 1978, approximately 20% of the customer accounts were out of balance and the Basic/Four system performed up to 78% of expectation for Office Supply (Tr. at 50-51 and 63). Since February 1978, when Marc Jerome finished correcting the defects in the system, Carlson testified that it has performed up to 100% of expectation (Tr. at 46). The plaintiff’s president, James Bruno, testified that the system only performed up to 50% of expectation prior to 1978 (Tr. at 114), that the accounts receivable first went out of balance on the October 1975 monthly statement printed during the first week of November 1975 (Tr. at 43), that it printed through for the first time in February 1976 (Tr. at 135), but that thereafter the accounts receivable problem continued on an intermittent basis until it was corrected by Marc Jerome in early 1978 (Tr. at 87, 132-134, 136, and 142). Both men testified that there were also problems with the hardware but that those problems were always corrected by Sorbus, a service corporation related to Basic/Four with which Office Supply had a hardware maintenance contract, with only a very few minimal extra charges not covered by the monthly maintenance charges. (Carlson Tr. at 38; Bruno Tr. at 121.)

On June 17, 1980, Office Supply commenced its action against Basic/Four.

The portion of the Office Supply-Basic/Four contract dealing with the purchase of the hardware is a straightforward document. It describes on the front of the document the computer model and features and the purchase price. Additional terms and conditions of sale are set forth on the reverse. In relevant part it provides on the reverse that it constitutes the entire agreement and understanding between the parties, that it shall be governed by the law of California, and as to warranties and remedies for breach of warranty:

“3. For ninety (90) days after the Equipment is installed * * * the Seller warrants the Equipment to be free from defects in material, workmanship, and operating failure from ordinary use, and the Seller’s liability is limited solely to correcting any such defect or failure without charge. * * * ”

In italic print paragraph 3 also states:

“The warranties contained in this Agreement are in lieu of all other warranties, express or implied, including any regarding merchantability or fitness for a particular purpose, arising out of or in connection with any Equipment (or the delivery, use or performance thereof). The Seller will not be liable * * * (b) for loss of profits or other incidental or consequential damages * * *.”

The portion of the contract dealing with the lease of the software is not as clearly drafted. On its first page, which is page 3 of the contract, it states:

“This Addendum to the Agreement for the Purchase of BASIC/FOUR Equipment, dated as of the 31 day of January 1975, between Basic/Four Corporation and Office Supply Inc. is hereby incorporated therein and made a part thereof.”

Page 3 describes the program applications and their price. Additional terms and conditions are set forth on the reverse side. As to warranties and limitation of remedies, paragraph 3 provides:

“The Seller believes that the programming being furnished hereunder is accurate and reliable and when programming *780 accomplishes the results set forth in the ‘Design Specifications,’ to be agreed to by the Seller and the Purchaser, such programming will be considered completed.”

Paragraph 3 continues in italics:

“However, the amounts to be paid to the Seller under this Agreement and this Addendum do not include any assumption of risk, and the Seller disclaims any and all liability for incidental or consequential damages arising out of the delivery, use or operation of the programs provided herein.

“If the purchaser, without the written consent of the Seller, makes any modification to the programming or any deviations from the operating instructions or violates the provisions of paragraph 2, all warranties set forth herein cease immediately.

“All warranties set forth herein are in lieu of all other warranties, express or implied, including any regarding merchantability or fitness for a particular purpose, arising out of or in connection with any program (or the delivery, use or performance thereof).”

The contract also contains a fourteen-page description of the program applications.

The parties agree that the contract is a sales contract, that the choice of law provision which it contains is valid, and consequently that the parties’ rights and liabilities are governed by the Uniform Commercial Code (“UCC”) as adopted in California. They agree about very little else.

The defendant contends in its motion for summary judgment that this action is barred by the applicable statute of limitations, that the warranty disclaimer and damage limitation provisions in the contract are valid and binding and therefore the plaintiff is entitled to no relief, and that the plaintiff’s second cause of action, which is based not on the UCC but on a negligence tort theory, does not state a cognizable claim. The plaintiff’s summary judgment motion consists of a denial of each of those contentions and arguments favoring the application of contrary rules of law at the ultimate trial of this action.

Each of the defendant’s contentions, along with the arguments as to the applicable legal principles raised by the plaintiff in opposing defendant’s summary judgment motion, is discussed separately below.

(1) The Statute of Limitations

UCC § 2-725 contains a four-year period of limitation governing actions for breach of a sales contract. California has adopted the four-year limitation period, § 2725, Cal. Comm.Code, but Wisconsin has adopted a six-year limitation period, § 402.725, Wis. Stats.

The parties agree that normally the forum’s statute of limitations will govern the timeliness of a breach of contract action even though the law of a different state is applied under the forum’s choice of law rules to the substantive provisions of the contract. Estate of Schultz, 252 Wis. 126, 30 N.W.2d 714 (1948); Air Products & Chemicals, Inc. v. Fairbanks Morse, Inc., 58 Wis.2d 193, 206 N.W.2d 414 (1973). In this ease, however, the defendant argues, the California statute of limitations should be applied because the contract specifically provides for the application of California law and because § 893.07, Wis.Stats., mandates that the California statute be applied. 2

Section 893.07 provides in part:

*781 “(1) If an action is brought in this state on a foreign cause of action and the foreign period of limitation which applies has expired, no action may be maintained in this state.”

The statute was adopted in 1979 and subsection (1) has not been construed in any reported decisions. The Judicial Council Committee’s Note states that subsection (1) is an application of § 893.05, Wis.Stats., “that the running of a statute of limitations extinguishes the right as well as the remedy to a foreign cause of action on which an action is attempted to be brought in Wisconsin in a situation where the foreign period has expired.” See also Maryland Casualty Company v. Beleznay, 245 Wis. 390, 14 N.W.2d 177 (1944). Nevertheless, I believe that the Wisconsin state courts would apply the Wisconsin statute of limitations in the situation here presented.

In general when parties include a provision in their contract as to the governing law, the courts consider that the provision applies only to the substantive law and is not to be deemed to govern the statute of limitations. 78 A.L.R.3d 639, “Choice of Law as to Applicable Statute of Limitations in Contract Actions,” § 2[b] at 646. An exception is made when under the governing foreign law the running of the statute of limitations extinguishes the cause of action as well as the remedy. Id., § 2[a] at 643 and § 4[a] at 652. California is not within the exception since under California law the running of a statute of limitations does not extinguish the cause of action but only bars relief:

“ * * * The general rule is that the running of the statutory period does not extinguish the cause of action, but merely bars the remedy. That is the law in California. [Citation omitted.] The law of the forum rather than where the obligation arose governs statutes of limitation and their applicability. * * * ” Western Coal & Mining Co. v. Jones, 167 P.2d 719, 724, 27 Cal.2d 819 (1946).

See also Wohlgemuth v. Meyer, 293 P.2d 816, 818-819, 139 Cal.App.2d 326, 328-329 (1956).

Furthermore, Wisconsin’s formulation of the borrowing of a foreign statute of limitations as set forth in § 893.07(1) refers to a “foreign cause of action.” It is my opinion that the Wisconsin courts would not consider the plaintiff’s cause of action “a foreign cause of action” even though the substantive terms of the contract are by California law.

In Air Products & Chemicals, Inc. v. Fairbanks, supra, a breach of contract action arising under Article 2 of the UCC involving engines manufactured in Wisconsin and sold to a corporation having its principal place of business in Pennsylvania, the parties and the Court agreed that Pennsylvania law should govern the parties’ substantive rights and liabilities under the contract, but the Wisconsin Supreme Court determined that using a “center-of-gravity” or “grouping-of-contacts” approach to conflict of law issues, Wisconsin’s six-year statute of limitations rather than Pennsylvania’s four-year statute should apply. Unlike this case, in that case the foreign party was the plaintiff in the action and therefore application of Wisconsin’s statute of limitations would not affect Pennsylvania’s interest in protecting defendants from stale claims. 58 Wis.2d at 203, 206 N.W.2d 414. In reach *782 ing its decision, however, the Wisconsin Supreme Court also relied on its conclusions that “Pennsylvania is in no position to in any way influence what Wisconsin feels to be an appropriate period of protection for both itself and defendants from stale lawsuits” and that “by the decision of the legislature to permit aggrieved parties six instead of four years to prosecute their claims, a decision contrary to the recommended period by drafters of the Uniform Commercial Code which was ultimately adopted in Pennsylvania, the legislature determined that the interests of Wisconsin are best advanced by a longer period.” 58 Wis.2d at 204, 206 N.W.2d 414.

Furthermore applying the “center-of-gravity” approach to the contract itself in this case compels the conclusion that the plaintiff’s cause of action arose in Wisconsin. The contract was negotiated primarily in Wisconsin, was signed by the plaintiff in Wisconsin, called for installation of the computer system in Wisconsin, and provided for the defendant’s performance of its express warranty obligations in Wisconsin.

Had the Wisconsin legislature intended under those circumstances that a foreign statute of limitations should govern the action, it could have adopted in § 893.07(1) a reference to “the otherwise applicable law,” which in this case would be California’s. See the Restatement (Second) of Conflict of Laws § 143. Instead, the legislature chose to adopt the formulation of a “foreign cause of action” which suggests that where the cause of action arises in Wisconsin, Wisconsin’s statute of limitations is applicable to it.

In sum, in my opinion the plaintiff’s cause of action in this case is not a “foreign cause of action” within the meaning of § 893.07(1), Wis.Stats., because although its substantive provisions are governed by foreign law, the parties’ most significant contacts involving the contract are with Wisconsin and thus the cause of action arose in Wisconsin and the six-year statute of limitation policy of the State of Wisconsin is applicable to the action and it may proceed. 3 That result also comports with the policy of the State of California that the law of the forum governs statutes of limitation. Western Coal & Mining Co. v. Jones, supra.

(2) Disclaimer of Warranties

The Office Supply-Basic/Four contract specifically provides that it constitutes the entire agreement and understanding between the parties. That being so, parol evidence is not admissible under California law to vary the terms of the agreement. APLications, Inc. v. Hewlitt-Packard Co., 501 F.Supp. 129 (S.D.N.Y. 1980). The language of the contract must be interpreted in an effort to determine the intent of the contracting parties. S. M. Wilson & Company v. Smith International, Inc., 587 F.2d 1363 (9th Cir. 1978).

If there are no exclusions or modifications in the contract, every sales contract governed by the UCC contains an implied warranty of merchantability and, if the seller has reason to know of a particular purpose for which the goods are required, an implied warranty of fitness for a particular purpose. Section 2315, Cal.Comm.Code. Express warranties are created if the seller makes an affirmation of fact or promise to the buyer and the affirmation becomes part of the bargain between the parties. Section 2313, Cal.Comm.Code. Thus, any express warranties must be found in the language of the contract. Implied warranties, in contrast, will be held to exist unless they are specifically excluded.

With regard to the computer hardware, the contract expressly warrants the hardware to be free from defects in material, workmanship, and operating failure from ordinary use for ninety days after installation. (Page 2, paragraph 3.)

*783 With regard to the computer software, the most reasonable interpretation of the contract is that the same ninety-day warranty of material, workmanship, and operating failure applies, dating from the time when the “programming accomplishes the results set forth in the ‘Design Specifications’ ” (page 4, paragraph 3), which in this case was on October 6, 1975, when plaintiff’s president so advised the defendant.

The plaintiff contends that the language just quoted is a warranty of future performance, and that in fact the programming did not accomplish the desired results until 1978. Courts have been parsimonious in finding warranties of future performance where there is no explicit language in the contract creating such a warranty. Standard Alliance Industries, Inc. v. Black Clawson Company, 587 F.2d 813, 820 (6th Cir. 1978). For example, a representation as to the performance ability of an existing product will not be construed as an explicit warranty of future performance ability of the product. Jones & Laughlin Steel Corporation v. Johns-Manville Sales Corporation, 626 F.2d 280, 291 (3d Cir. 1980) (interpreting California law). Section 2316(1), Cal.Comm.Code, provides in part:

“(1) Words or conduct relevant to the creation of an express warranty and words or conduct tending to negate or limit warranty shall be construed wherever reasonable as consistent with each oth QY * * * »

The first page of the software addendum (page 3 of the contract) provides that it is incorporated within and made a part of the hardware purchase agreement. That agreement contains the ninety-day express warranty provision which, as a result of the incorporation, also applies to the software purchase. In light of the ninety-day express warranty, the most reasonable construction of the software addendum language regarding the results to be accomplished by the programming is that the completion of the programming and installation of all of the bargained-for applications starts the running of the ninety-day warranty period, and not that the applications are warranted to run perfectly once their installation is apparently successfully completed.

The UCC allows contracting parties to exclude or modify all implied warranties. There is no correlative requirement that if implied warranties are excluded, express warranties must be given. Thus it is permissible, for example, to exclude all implied warranties and to provide for a ninety-day express warranty limited to repair or replacement of defective goods. APLications, Inc. v. Hewlitt-Packard Co., supra (ninety-day express warranty on the sale of a computer system under California law); Badger Bearing Co. v. Burroughs Corp., 444 F.Supp. 919 (E.D.Wis.1977), aff’d, without opinion, 588 F.2d 838 (7th Cir. 1978).

In order to make an effective waiver of implied warranties, the provisions of § 2316(2), Cal.Comm.Code, must be followed:

“ * * * to exclude or modify the implied warranty of merchantability or any part of it the language must mention merchantability and in case of a writing must be conspicuous, and to exclude or modify any implied warranty of fitness the exclusion must be by a writing and conspicuous. * * * ”

There is no dispute that the language contained in the contract was in this case sufficient to waive all implied warranties. The issue is whether the disclaimer was “conspicuous.” Section 1201(10), Cal.Comm. Code, provides:

“(10) ‘Conspicuous.’ A term or clause is conspicuous when it is so written that a reasonable person against whom it is to operate ought to have noticed it. A printed heading in capitals (as: NONNEGOTIABLE BILL OF LADING) is conspicuous. Language in the body of a form is ‘conspicuous’ if it is in larger or other contrasting type or color. But in a telegram any stated term is ‘conspicuous.’ Whether a term or clause is ‘conspicuous’ or not is for decision by the court.”

Basic/Four points out that it disclaimed the implied warranties not once but twice, and that the disclaimers were written in itali *784 cized print, in contrast to the regular print used on the rest of the contract. Nevertheless, the disclaimers are not conspicuous. In Dorman v. International Harvester Company, 46 Cal.App.3d 11, 120 Cal.Rptr. 516 (1975), the California court of appeals noted that under pre-Code California law, disclaimers of warranty are strictly construed, and, applying the code, it found that an attempted disclaimer written in only slightly contrasting print and without a heading adequate to call the buyer’s attention to the disclaimer clause was not effective. That decision controls in this case. The two disclaimers in the Office Supply-Basic/Four contract are on the reverse sides of the first two pages of the contract. They are not positioned close to the buyer’s signature line. The contracts are printed on pale green paper and the disclaimers are set forth in print which, although italicized, is only slightly contrasting with the remainder of the contract. There are no headings noting the disclaimers of warranty. Since there is only “ ‘some slight contrasting set-off’ ” and there is “ ‘only a slight contrast with the balance of the instrument,’ ” Dorman, supra, 120 Cal.Rptr. at 522, quoting Woodruff v. Clark County Farm Bureau Coop. Assn. (1972), 153 Ind.App. 31, 286 N.E.2d 188, 198, quoting in turn Greenspun v. American Adhesives, Inc., 320 F.Supp. 442 (E.D.Pa.1970), therefore, the disclaimers are not conspicuous.

Discussion of the effectiveness of the disclaimer provisions in the contract does not end with the finding of lack of conspicuousness. In their treatise Uniform Commercial Code § 12-5 at 444 (2d ed. 1980), Messrs. White and Summers note “with apprehension” the growing number of cases which hold that if a buyer is actually aware of a warranty disclaimer, then the disclaimer is effective even if not conspicuous. See also 73 A.L.R.3d, “Construction and Effect of UCC § 2-316(2) Providing that Implied Warranty Disclaimer must be ‘Conspicuous,’ ” § 5[b], pointing out the same line of cases. The Official Comment to UCC § 2-316 states that the section is designed “to protect a buyer from unexpected and unbargained language of disclaimer.” Pointing to that language, the Court in Dorman, supra, 120 Cal.Rptr. at 521-522, indicated that California will follow the trend:

“ * * * [W]e must rely predominantly on the official comments to sections 2316 and 1201, subdivision (1), and to foreign law. The official comment to subdivision (10) of section 1201 states that the ‘test [of conspicuousness] is whether attention can reasonably be expected to be called to [the disclaimer provision].’ (Cf. Gray v. Zurich Insurance Co., 65 Cal.2d 263, 271, 54 Cal.Rptr. 104, 419 P.2d 168.) We must examine this comment in the light of the official comment to section 2316, which states: ‘This section is designed principally to deal with those frequent clauses in sales contracts which seek to exclude “all warranties, express or implied.” It seeks to protect a buyer from unexpected and unbargained language of disclaimer by denying effect to such language when inconsistent with language of express warranty and permitting the exclusion of implied warranties only by conspicuous language or other circumstances which protect the buyer from surprise.’ (Emphasis added.) In other words, section 2316 seeks to protect the buyer from the situation where the salesman’s ‘pitch,’ advertising brochures, or large print in the contract, giveth, and the disclaimer clause — in fine print — taketh away.”

The Dorman Court also noted that under pre-Code California law as well, a provision disclaiming implied warranties “was ineffectual unless the buyer assented to the provision or was charged with notice of the disclaimer before the bargain was completed.” Id., 120 Cal.Rptr. at 521.

James Bruno testified during his deposition taken on November 3,1980, that before he purchased the Basic/Four system, he spent approximately two months comparing it with other systems (Tr. at 10), and that he drew up a written comparison of the Basic/Four and Qantel systems, including their guarantees. Basic/Four, 90 days; and Qantel had one year.” (Tr. at 30.) He read the back of the contract before he signed it *785 (Tr. at 52-53), when he received the contract from Basic/Four he made out a list of questions to ask Basic/Four before signing and one subject on his list was the ninety-day guarantee (Tr. at 77-78), and before he signed he showed the warranty provision in the contract to someone he knew in the data processing field (Tr. at 81-82). He discussed the warranties with Basic/Four before signing and tried to have them modified:

“Q Did you read the provisions of the warranty?

“A Yes.

“Q And did you discuss those provisions with Basic/Four, or with someone from Basic/Four?

“A Yes.

“Q And what was said to you about those provisions?

“A That that was the condition that I had to accept.

“Q All right. And was that discussion before or after the contract was signed?

“A I would say before.

* * * * * *

“Q * * * did you call up Darryl Bannister, for example, and say I want to buy this system but I refuse to agree to the warranty provisions in the contract?

“A Well, I argued with him, but it was to no avail. Nothing.” (Tr. at 84-85.)

He also was aware of the warranty limitations before he signed the contract:

“Q Well, were you aware of the provisions of that warranty before you signed the contract?

“A That there were limitations?

“Q That there are limitations to the warranty? Were you aware of that?

“A Certainly.

“Q You were?

“A Yes.” (Tr. at 87.)

That testimony establishes that the warranty disclaimers were neither unexpected nor unbargained for, and that, consequently, under Dorman, they should be enforced.

On December 15, 1981, Basic/Four filed its motion for summary judgment. In opposition to the motion, on January 21, 1982, the plaintiff filed an affidavit signed by Mr. Bruno in which he states:

“3. * * * that there was no statement by the Basic/Four sales executives that they would not stand behind their system after 90 days were up; that affiant did not have these Agreement [sic] reviewed by his attorney, nor was he aware from the documents signed by affiant on 1-31-75 that there were any disclaimers by Basic/Four; * *

The plaintiff has offered no explanation of the discrepancy between the affidavit and the deposition testimony. The issue now before the Court, therefore, is whether the discrepancy is sufficient to create a genuine issue of fact for trial as to the plaintiff’s awareness of the warranty limitations contained in the contract before it was signed.

An affidavit of a witness which conflicts with his deposition testimony should, despite the greater reliability usually attributed to the deposition, be considered on a summary judgment motion in determining if there is a genuine issue for trial. 6 Moore’s Federal Practice ¶ 56.22[1] at 56-1325 through 56-1326; 10 Wright and Miller’s Federal Practice and Procedure § 2738 at 686; Adams v. United States, 392 F.Supp. 1272, 1274, 1275 (E.D.Wis.1975). Summary judgment may nevertheless be granted based upon the deposition testimony if the court is satisfied that the issue created by the affidavit is not “genuine.” Perma Research and Development Company v. Singer Company, 410 F.2d 572, 578 (2d Cir. 1969); Radobenko v. Automated Equipment Corporation, 520 F.2d 540 (9th Cir. 1975); Farnsworth, McKoane & Co. v. North Shore Savings & Loan Association, 504 F.Supp. 673, 680 (E.D.Wis.1981); Dudo v. Schaffer, 91 F.R.D. 128 (E.D.Pa.1981); Choudhry v. Jenkins, 559 F.2d 1085, 1090 (7th Cir. 1977).

In this case it was the president of the plaintiff, and not officers or employees of *786 the defendant, who testified at deposition long before the summary judgment motion was filed that he knew of the warranty limitations before he signed the contract, tried to get them changed and, when he was unable to do so, signed the contract anyway. It is upon that testimony that the defendant has relied in moving for summary judgment. Thus, this is not a case where the plaintiff can complain of lack of access to material facts or can put forth newly discovered evidence in an effort to defeat summary judgment. Perma Research and Development Company v. Singer Company, supra, at 578. He was cross-examined at length about the warranty clauses during his deposition and has failed to explain his change of mind as reflected in his affidavit. Dudo v. Schaffer, supra, at 133. In Radobenko v. Automated Equipment Corporation, supra, at 544, when confronted with a similar situation, the Ninth Circuit concluded:

“While the facts embraced in these three recitals [made in the plaintiff’s affidavit and contradicting his earlier deposition testimony] are both material and relevant to the issues raised by the pleadings, we reject appellants’ efforts to characterize them as genuine issues of fact. When confronted with the question of whether a party should be allowed to create his own issue of fact by an affidavit contradicting his prior deposition testimony, the Court of Appeals for the Second Circuit held that no genuine issue of fact was raised. Perma Research & Development Co. v. Singer Co., 410 F.2d 572, 578 (2d Cir. 1969). Therein the Court noted:

“ ‘[i]f a party who has been examined at length on deposition could raise an issue of fact simply by submitting an affidavit contradicting his own prior testimony, this would greatly diminish the utility of summary judgment as a procedure for screening out sham issues of fact.’ 410 F.2d at 578.

“The very object of summary judgment is to separate real and genuine issues from those that are formal or pretended, so that only the former may subject the moving party to the burden of trial. [Citation omitted.] Here we are convinced that the issues of fact created by Radobenko are not issues which this Court could reasonably characterize as genuine; rather, they are sham issues which should not subject the defendants to the burden of a trial. * * * ”

In this case the deposition testimony upon which the defendant relies so clearly indicates that the plaintiff knew of the warranty limitations before the contract was signed, and at a minimum discussed the ninety-day provision with the defendant, that the plaintiff should not now be permitted to compel a trial on the issue by filing an affidavit denying the admissions made during the deposition. I therefore conclude that the record establishes that the plaintiff was aware of the warranty limitations before the contract was signed, that no genuine issue of material fact exists on that point, and that under California law the warranty limitation provisions in the contract are therefore valid.

(3) Limitation of Remedies

In addition to its exclusion of implied warranties, the contract states that the remedy available to Office Supply is limited to repair or replacement of defective parts and that Basic/Four has no liability for incidental or consequential damages.

Section 2316(4), Cal.Comm.Code, provides:

“(4) Remedies for breach of warranty can be limited in accordance with the provisions of this division on liquidation or limitation of damages and on contractual modification of remedy (Sections 2718 and 2719).”

Section 2719, Cal.Comm.Code, on contractual modification or limitation of remedies, provides in part:

“(1) * * * (a) The agreement may provide for remedies in addition to or in substitution for those provided in this division and may limit or alter the measure of damages recoverable under this division, as by limiting the buyer’s remedies to return of the goods and repay *787 ment of the price or to repair and replacement of nonconforming goods or parts; and

* * * * * *

“(3) Consequential damages may be limited or excluded unless the limitation or exclusion is unconscionable. * * * Limitation of consequential damages where the loss is commercial is valid unless it is proved that the limitation is unconscionable.”

Office Supply contends that if the exclusion of warranties clause is found to have been invalid because it was not conspicuous, then the limitation on remedies contained in the contract automatically fails as well and the plaintiff may pursue all of the remedies set forth in the code, including its claims for incidental and consequential damages. The argument is without merit. The Code provisions on limitation of damages are set forth in a separate section from that containing the warranty disclaimer provisions, and the section does not require that a limitation on damages, in order to be effective, be conspicuous. See also White and Summers, Uniform Commercial Code, supra, § 12-9 et seq.

The plaintiff also contends, first, that the exclusion of incidental and consequential damages was unconscionable, and second, that the limitation of remedy to repair or replacement of defective parts failed to provide the plaintiff with a functioning computer system and therefore the disclaimer is invalid and plaintiff should be able to pursue all of the remedies available under the Code. The defendant argues that the plaintiff modified the software applications without written consent and therefore the warranty is terminated.

As to the modifications which Ted Templeton of Computer Methods, Inc., made to the system and which plaintiff’s own programmer, Marc Jerome, made to the system, paragraph 3 (in italics) of the contract at page 4, relating to additional terms and conditions for the purchase of the software, provides in part:

“If the purchaser, without the written consent of the Seller, makes any modification to the programming * * * all warranties set forth herein cease immediately.”

There is no claim that any of the modifications were made prior to the expiration of the warranty period on January 6, 1976. Therefore, if any defects remained in the system as of that date which Basic/Four had failed to correct under its warranty obligation, plaintiff’s subsequent modification of the programs would have no effect on its right to recover for those defects.

As for the limitation of remedies, § 2719(2), Cal.Comm.Code, provides:

“(2) Where circumstances cause an exclusive or limited remedy to fail of its essential purpose,