O'NEIL, CANNON, HOLLMAN, DEJONG & LAING S.C.: Critical Legal Risks in Terms & Conditions for Sellers | Erayaha

When Boilerplate Fails: Uncovering High-Stakes Legal Risks in O'NEIL, CANNON, HOLLMAN, DEJONG & LAING S.C.'s Terms & Conditions

Imagine a seller facing a $2.5 million product liability lawsuit, only to discover that their standard terms offer no shield. Our analysis of O'NEIL, CANNON, HOLLMAN, DEJONG & LAING S.C.'s terms reveals several critical gaps that could expose sellers to severe financial and legal risks—especially in the high-stakes world of the "Battle of the Forms."

1. Absence of Express Limitation of Liability: A Multi-Million Dollar Exposure

The terms discuss the risk of UCC "gap fillers" applying when forms conflict, but fail to mandate a clear limitation of liability for sellers. Without this, sellers may be liable for consequential damages, which can easily exceed $1 million in a single dispute.

Legal Analysis

critical Risk

Removed

Added

If a dispute arises, one party may argue that there was no agreement on certain terms because such terms were additional terms prohibited by the UCC. Under Section 2-207, if an acceptance or confirmation includes additional terms, those extra terms will become partSeller’s liability for any claim arising out of or relating to the contract unless: the offergoods or this agreement is expressly limits acceptancelimited to the termspurchase price of the offer; the additional terms materially alter the offer;goods. In no event shall seller be liable for any consequential, incidental, or notificationspecial damages, including lost profits, regardless of objection has been given or is given within a reasonable time after the additional terms are receivedcause of action.

Legal Explanation

Explicitly limiting liability is essential to avoid exposure to consequential damages under UCC gap fillers. The revision provides a clear, enforceable cap, reducing the risk of catastrophic financial loss.

2. No Explicit Disclaimer of Implied Warranties: Regulatory and Litigation Risk

The document notes that UCC gap fillers include implied warranties, but does not require sellers to expressly disclaim them. This omission could result in sellers being held to broad warranty obligations, exposing them to claims and regulatory scrutiny under UCC §§2-314 and 2-315.

Legal Analysis

high Risk

Removed

Added

These are called “gap fillers” and are very buyer friendly. They include: ImpliedSeller expressly disclaims all implied warranties, including but not limited to the implied warranties of merchantability and fitness; No limitation on seller’s liability; Consequential damages; Four-year statute of limitations; Payment due on delivery; Insurance risk remains with for a particular purpose, to the seller until delivery of goods; and Additional buyer and seller remediesfullest extent permitted by law.

Legal Explanation

A clear disclaimer of implied warranties is required to avoid default UCC obligations. This revision ensures sellers are not held to unintended warranty standards, reducing litigation and compliance risk.

3. Failure to Specify Governing Law and Jurisdiction: Unpredictable Litigation Costs

The guidance recommends specifying applicable law and forum, but the sample terms do not require this. Without a governing law clause, sellers risk litigating in unfavorable jurisdictions, potentially increasing legal costs by $100,000+ per case.

Legal Analysis

high Risk

Removed

Added

Also note that certain protectionsThis agreement shall be governed by and construed in a selleraccordance with the laws of the State of [Seller’s termsState], and conditions shouldany disputes arising hereunder shall be considered to be non-negotiableresolved exclusively in the state or federal courts located in [Seller’s County], including: [Seller’s State]... Specifying what law applies and what courts have jurisdiction.

Legal Explanation

Specifying governing law and jurisdiction reduces uncertainty, controls litigation costs, and avoids unfavorable forums. The revision provides predictability and strategic advantage for the seller.

4. Ambiguity Around Acceptance and Objection Procedures: Enforceability Loopholes

The terms advise sellers to object to buyer terms, but lack a precise, mandatory procedure for doing so. This ambiguity can lead to enforceability challenges and loss of key protections, especially under UCC §2-207.

Legal Analysis

medium Risk

Removed

Added

Carefully review theSeller shall provide written notice of objection to any conflicting or additional terms and conditions in the buyer’s forms and respond with express objections priorwithin five (5) business days of receipt. Failure to commencing performanceprovide such notice shall not constitute acceptance of those terms.

Legal Explanation

Mandating a clear objection procedure strengthens enforceability under UCC §2-207 and reduces the risk of losing key protections due to procedural ambiguity.

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Conclusion: Proactive Redlining to Prevent Catastrophic Losses

Our examination shows that even sophisticated legal commentary can leave sellers exposed to catastrophic losses without precise, enforceable terms. Addressing these four issues could save sellers millions in litigation, regulatory fines, and lost business.

Are your standard terms truly protecting your bottom line?
How often do you audit your contracts for enforceability gaps?
What would a $2 million liability mean for your business?

**This analysis is for educational purposes only and does not constitute legal advice. For actual legal guidance, consult with a licensed attorney. This assessment is based on publicly available information and professional legal analysis. See erayaha.ai's terms of service for liability limitations.**