Legal Memorandum: Sufficiently Conspicuous Contract Clause

Issue: Under Massachusetts law, when is a contract clause deemed sufficiently conspicuous to be enforceable?

Massachusetts law defines conspicuousness as a term or clause "so written that a reasonable person against whom it is to operate ought to have noticed it.  A printed heading in capitals (as: NON-NEGOTIABLE BILL OF LADING) is conspicuous.  Language in the body of a form is ‘conspicuous’ if it is in larger of either contrasting type or color."  Mass. Gen. Laws Ann. ch. 106, § 1-201(10) (West 1990). 

This issue of conspicuousness is a matter of law for the courts to decide.  In Winter Panel Corp. v. Reichhold Chems., Inc., 823 F. Supp. 963 (D. Mass. 1993), the court found that the warranty and damage limitations were conspicuous.  Although the clauses appeared on the back of the invoice, a clearly written sentence on the front advised the reader to "See the reverse side for Seller’s Standard Terms and Conditions which include a disclaimer of all warranties, expressed or implied, including warranty of merchantability."  823 F. Supp. at 973.  The reverse side of the document contained a bold and capitalized heading stating "STANDARD TERMS AND CONDITIONS."  Id.

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