International Business Machines Corp. v. Lufkin Industries, Inc. (Opinion)Annotate this Case
In this case involving a contract to purchase a business-management software system, the Supreme Court held that contractual disclaimers barred Buyer from recovering in tort for misrepresentations Seller made both to induce Buyer to enter into the contract and to induce Buyer later to agree to amend the contract but that Seller’s breach of contract caused Buyer to suffer damages.
Buyer sued Seller for, inter alia, common law fraud, fraudulent inducement, and breach of contract. The jury found Seller liable on all claims. The jury awarded damages for fraudulent inducement and common law fraud but awarded zero damages for breach of contract. The court of appeals affirmed liability for fraudulent inducement but reversed the fraud award, concluding that the claim was based on the same misrepresentations as the fraudulent-inducement claim. The Supreme Court affirmed in part and reversed in part, holding (1) Buyer could not recover from recover for fraudulent inducement or common law fraud because Buyer expressly disclaimed any reliance on Seller’s misrepresentations; and (2) Buyer was entitled to a new trial on its claim for breach of contract because the evidence conclusively established that Buyer suffered some amount of damages as a result of Seller’s breach.