Full opinion text
MEMORANDUM OF DECISION CLARIE, Senior District Judge. The plaintiff, The Standard Structural Steel Company (“Standard” or “the plaintiff”) commenced two separate suits in an effort to recover the property damage and economic loss it allegedly suffered during May and June 1974, while performing á contract to dismantle the ironwork in the Gold Star Memorial Bridge at New London, Connecticut, and erect a new bridge to replace it. Standard initially brought suit against the defendant, Bethlehem Steel Corporation (“Bethlehem”) in the Connecticut Superior Court, claiming that Bethlehem had breached its implied warranties of merchantability and fitness for a particular purpose in the sale of the “bridge strand” (lifting cable); and further, that Bethlehem was strictly liable in tort to Standard for having sold the plaintiff an unreasonably dangerous product.- Bethlehem, an out-of-state defendant, then petitioned to remove this, state court action to the federal court. Approximately three years later, the plaintiff decided to sue its own insurance carrier, the defendant Liberty Mutual Insurance Company (“Liberty”) in this Court, invoking the principle of diversity jurisdiction. In the latter suit, Standard averred that Liberty had improperly failed to pay the plaintiff pursuant to its policy coverage for the May, 1974 incidents. On January 24, 1979, the two cases were consolidated for the purposes of trial; and thereafter, by agreement of the parties, the consolidated cases were bifurcated, and have been tried to the Court on the issue of liability alone. The Court finds (1) that the bridge strand which Bethlehem sold to the plaintiff was not unreasonably dangerous so as to trigger strict liability in tort, (2) that Bethlehem successfully disclaimed both of the implied warranties alleged in the case, (3) assuming that the warranties had not been disclaimed, Bethlehem neither created a warranty of fitness for a particular purpose nor breached the warranty of merchantability, and (4) that the “CONTRACTORS’ EQUIPMENT FORM (All Risk)” policy issued to Standard by Liberty did cover the damage at issue in this case. The Court also finds that the defendant Bethlehem Steel Corporation is not liable in damages to the plaintiff for the May and/or June 1974 resulting damages which occurred in connection with the cable guide breaking at the weld, but finds the defendant Liberty Mutual Insurance Company liable to indemnify the plaintiff for the provable losses under the terms of the initial policy dated December 31, 1973. Due to the bifurcation of the. issues, the exact amount of provable damages due and owing cannot be determined without a further hearing. Findings of Fact The plaintiff Standard Structural Steel Company is a Connecticut corporation engaged in the business of fabricating and erecting structural steel. Its principal place of business is Newington, Connecticut. The defendant Bethlehem Steel Corporation is a Delaware corporation with its principal place of business in Bethlehem, Pennsylvania. The defendant Liberty Mutual Insurance Company is a Massachusetts corporation with its principal place of business in Boston, Massachusetts. In early 1973, Standard contracted to remove the existing truss spans of the original Gold Star Memorial Bridge, which crosses the Thames River between New London and Groton, Connecticut, and to erect new steel spans. The latter were to be prefabricated on shore and placed upon the existing concrete piers. To protect certain of its property during the course of this dismantling project, Standard entered into an initial contract of insurance, specifically called a “CONTRACTORS’ EQUIPMENT FORM (All Risk)” policy with Liberty, effective for the period from October 1, 1973 until October 1, 1974. To remove and replace the spans, the plaintiff chose to use a new and rather unique waterborne derrick system. After consulting many experts, the plaintiff, under the direction of Joseph Bachta, Assistant to the President of Standard, designed and constructed an apparatus consisting of a jacking system suspended from four shear-leg (boom) derricks, which were themselves floated on barge bases placed on the north and south sides of the bridge to be dismantled. Each derrick included two shear legs, or booms. The two barge bases upon which the derrick systems sat included three individual barges which were firmly affixed and connected one to another. The north and south barges themselves were also connected, but the plaintiff left a space between them to accommodate a movable transportation barge. As the derrick system would remove a section of the existing span, that section would be lowered and placed in a balanced posture upon the transportation barge and floated upstream, where it was dismantled on the shore. Standard rented the mechanical jacking system from the Elgood-Mayo Corporation of New York, which had used the system in previous projects. This jacking system included fixed spreader beams which were suspended from the derricks by “bridge strand” cables. Upper stationary grippers were bolted to these spreader beams. Lower grippers were bolted to a second, movable set of spreader beams. The upper and lower spreader beams were connected by a hydraulic cylinder, which was the actual jacking system. Above the top grippers were channels supported by stationary cables. The grippers consisted of wedge shaped shoes which operationally engaged the steel lifting cable through air pressure and mechanical power. The air pressure initially activated and opened the grippers. The mechanical power, which was derived from the weight of the system being lowered, exerted pressure on the lifting cable. As such, the carrying capacity was realized from the friction between the wedges, which were constricted by the gripper housing, and the lifting cable. Therefore, during operation, the grippers often squeezed the lifting cable with intense pressure. There were eight pairs of grippers in all: an upper and a lower gripper on each of the two shear legs positioned abroad each of the two barge bases. Each of these grippers, however, did not work at the same time. When the upper grippers were engaged, the lower grippers were disengaged, and the hydraulic jack moved the lower grippers up or down in relation to the cable. The lower grippers would then be engaged, and the upper grippers disengaged, to permit the jack to move the cable, and with it the suspended bridge span, would be moved up or down. When Elgood-Mayo employed this jacking system on past projects, it had utilized 23/4" diameter wire rope as the lifting cable. In fact, in early April, 1973, Elgood-Mayo offered 2%" wire rope to the plaintiff for use on this project. However, the plaintiff rejected this offer. Although the ElgoodMayo wire rope would have been sufficient for the Gold Star job, the plaintiff wanted to upgrade its system, by. increasing its lifting capacity for future jobs. (Bachta, direct, November 2, 1982; Bachta, cross, November 4, 1982). As a result, in May, 1973, Joseph Bachta, the plaintiffs chief engineer, decided to purchase 31/2" diameter wire rope for the system. (Bachta, direct, November 2, 1982; Plaintiffs Exhibit 11). In pursuance of this product, Bachta asked Bethlehem’s salesman John Bowles, who was the salesman normally assigned to Standard, for á price quote or bid for wire rope to be used as a lifting cable on the ' Gold Star Memorial Bridge project. Bowles told Bachta that he would call in Ronald Bergmark, another Bethlehem salesman. (Bowles, direct. December 1, 1982). Although Bergmark customarily sold wire rope, he was not technically astute in the area. A high school graduate with one year of college education, Bergmark had begun work at Bethlehem as a mail boy and progressed to the occupation of salesman in 1968. His technical background in wire rope consisted of a two month refresher course on the manufacturing thereof given by his employer. (Bergmark, Tr. 2-3, 5). On May 31, 1973, at the request of his employer, Bethlehem Steel, Bergmark made his first (and only) visit to the plaintiff’s offices. There, he met with Joseph Bachta and Howard Shea, Bachta’s assistant. Bergmark spoke with Bachta for only a short period of time, spending the majority of his time in discussion with Shea. During this time, Bergmark understood that he was pursuing a wire rope order. (Bachta, cross, November 4, 1982; Berg-mark, Tr. 4-6, 17, 27). Shea and/or Bachta explained to Berg-mark that the plaintiff needed cable for a lifting system for fabricated steel. Standard’s personnel showed Bergmark some schematic drawings of components of the system, but never showed Bergmark a diagram of the entire system. After this meeting, Bergmark understood that the plaintiff needed cable to be used as a stationary member of the lifting system along which moving grippers would travel. (Bergmark, Tr. 7, 9, 15-18, 49-50). The plaintiff’s personnel then informed Bergmark that they intended to use 3V2" diameter wire rope, but asked him whether or not there was a way to increase the breaking strength of the cable without increasing the diameter. The plaintiff’s employees told Bergmark that if they were to use a cable with a larger diameter, the gripper shoes would have to be remachined. As a result of this conversation,. Bergmark understood the plaintiff’s primary concern to be how to obtain a greater breaking strength without increasing the cable diameter. (Bergmark, Tr. 8-10, 55-56; Bachta, direct, November 2, 1982). After consulting Bethlehem product catalogs which he had brought with him, Berg-mark suggested that the use of “bridge strand” might be an appropriate solution to the plaintiff’s problems. This 31/8" “bridge strand” consisted óf approximately 130 individual wires, and according to the catalogs, is stronger than wire rope for any given diameter. However wire rope, with many more individual wires, is more flexible than a comparable diameter of bridge strand. Due to his lack of technical expertise, Bergmark called Bethlehem’s Wire Rope Engineer William Schwenke on the telephone to discuss the issue in greater detail. (Bergmark, Tr. 8; Bachta, direct, November 2, 1982). First, Bergmark spoke to Schwenke, explaining the jacking system as he understood it, a system in which the cable would be used as a static member with the grippers moving along it. Next, for added clarity, Bergmark turned the telephone over to Shea who spoke directly to Schwenke concerning the matter at hand. (Bergmark, Tr. 9, 14). After speaking to both of these men, Schwenke stated that assuming the application of the lifting cable to be static, “bridge strand” might be more appropriate because its larger outer wires would be more conducive to gripping, (Bergmark, Tr. 15, 20) and that bridge strand would also provide the plaintiff with the lifting capacities which the plaintiff desired. Otherwise, Schwenke made no recommendation concerning the suitability of the lifting cable. Schwenke specifically told Bergmark, who in turn informed the plaintiff’s employees, that, in order for Bethlehem to- make a recommendation concerning the lifting cable, its engineers would have to be given an opportunity to review the technical drawings of the lifting system. (Bergmark, Tr. 15, 26-27). This statement accorded with a long-standing Bethlehem Steel policy, i.e., that Bethlehem will only make a recommendation after all design factors — load, strength, bend, speed, etc. — are known and can be evaluated by its engineers. (Schwenke, Tr. 56-57). After speaking with Schwenke, Berg-mark asked to see the drawings of the system. The plaintiff, however, only allowed Bergmark to see a drawing which illustrated a cable guide diameter of some seventeen feet; the actual diameter or arc of the first cable guide used in the operational system was only approximately three feet. The plaintiff would not allow Berg-mark to view any other drawings, as it considered this information to be confidential and a proprietary matter. (Bachta, cross, November 4, 1982; Bergmark, Tr. 24-25; Defendant’s Exhibit 9; Plaintiff’s Exhibit 21). Bachta articulated another concern of Standard’s to Bergmark during this sales visit, namely, the availability of the product. Bergmark told Bachta that bridge strand would be available many months sooner than wire rope. (Bachta, cross, November 4, 1982). As of this date, May 81, 1973, the plaintiff had not yet decided to use bridge strand. It was only at a future date that Bachta discussed prices of bridge strand with representatives of Bethlehem over the telephone. Moreover, at the meeting of May 31, 1973, Bachta did not discuss the terms and conditions of sale with Berg-mark. (Bachta, cross, November 4, 1982, direct, November 16, 1982; Bergmark, Tr. 37, 40). At some time during Bergmark’s visit, Standard decided to use “bridge strand”. This fact was evidenced in three ways. First, during a conversation with Bachta, which took place after Bergmark’s visit, Bowles asked Bachta for drawings of the system. Bachta responded by telling Bowles not to worry about drawings, because Standard knew what it wanted. (Bowles, direct, December 1, 1982). Secondly, in the very beginning of June, 1973, Standard requested and received a telephone price quotations from both Bethlehem and the United States Steel Corporation for eight pieces of 31/8" bridge strand, each 190 feet in length with 31/4 " modified open strand sockets. (Bachta, direct, November 2, 1982; Plaintiff’s Exhibits 13, 14, 75). Finally, on June 6, 1973, the plaintiff telephoned Bethlehem and placed an order for the bridge strand cable product. (Bachta, direct, November 2, 1982; Bergmark, Tr. 28-29). On June 7, 1973, in response to Standard’s order, Bethlehem sent a letter to Standard. That letter advised Standard that Bethlehem had entered its order on June 7, 1973, described the product to be delivered in detail, articulated the terms and conditions of shipment and delivery, and stated, “Terms and Conditions-Wire Rope attached are made part of this order. If you have any questions, please advise.” The “Terms and Conditions of Sale” page attached included language which posited, in relevant part: “All proposals, negotiations, and representations, if any, regarding this transaction and made prior to the date of this quotation or proposal are merged herein.” “EXCLUSION OF WARRANTIES— THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR PURPOSE ARE EXCLUDED FROM ANY CONTRACT RESULTING FROM THIS QUOTATION OR PROPOSAL.” (Bold print in original). (Plaintiff’s Exhibit 18). The letter also contained a subsection limiting the buyer’s remedies to replacement of “non-conforming materials” and to exclude labor expenditures and “any special, direct, indirect, incidental or consequential damages,” as well as a subsection which claimed that a purchase order would not “RESULT IN A CONTRACT UNTIL IT IS ACCEPTED AND ACKNOWLEDGED BY THE SELLER’S GENERAL SALES OFFICE.” (Bold print in original) (Plaintiff’s Exhibit 18). Thereafter, Bethlehem, sent Standard such a formal “Acknowledgement” which provided, in pertinent part: “We thank you for the order listed above which we are pleased to have accepted subject to only those terms and conditions of sale which are set forth above and on the reverse side hereof. “Trusting that we have your assent to these terms and conditions we accordingly have entered your order in our mill schedule.” On the reverse side, under the heading, “TERMS AND CONDITIONS OF SALE,” (bold print in original), Bethlehem stated, in part: “In accordance with usages of the trade, your assent to the terms and conditions of sale set forth below and on the reverse side hereof shall be conclusively presumed from your failure seasonably to object in writing and from your acceptance of all or any part of the material ordered.” Thereafter, using virtually identical language, and, in the case of the exclusion of warranties, once again, in bold print, Bethlehem repeated the merger clause, the exclusion of warranties-, and the limitation of buyer’s remedies present in its June 7,1973 letter to Standard. The only difference in language between the two documents indicated that Bethlehem considered a contract to have been formed at the time of the Acknowledgment, but not when the June 7, 1983 letter was mailed. (Plaintiff’s Exhibits 18, 19). Standard received this Acknowledgment on June 14, 1973, (Plaintiff’s Exhibit 19), yet neither repudiated the terms and conditions contained in the June 7, 1973 Letter of Acknowledgment, nor even discussed these terms and conditions with any employee of Bethlehem. (Bachta, direct, November 16, 1982; Oral Stipulation, plaintiff’s counsel, November 3, 1982.) Bachta, the plaintiff’s officer most intimately involved with the purchase, read and clearly understood the terms and conditions included in both documents. Bethlehem and Standard were no strangers to each other. Bachta testified that the two companies had always had a close relationship; Bethlehem, in fact, had been a major supplier of Standard’s for some sixty-two years, as of the fall of 1982. (Bachta, Deposition Transcript, October 19, 1982, at 263). As a long-time customer of Bethlehem’s, Standard and indeed Bachta himself knew, and admitted that it was Bethlehem’s policy to sell products only under the terms and conditions listed on both documents, namely, disclaiming expressly the implied warranties of merchantability and fitness for a particular purpose. (Bachta, cross, November 4, 1982). Despite this knowledge, Bachta chose to ignore said terms and conditions. More important, it is to be noted that Bachta testified he deliberately attempted to avoid these terms and conditions by purposely failing to send a written purchase order to Bethlehem and by relying instead on what he viewed as an oral agreement struck with Ronald Berg-mark on May 31,1973. A written purchase order, introduced as Defendant’s Exhibit 9, was produced by plaintiff for its internal accounting purposes only and was never sent to Bethlehem. (Bachta, cross, November 4, 1982, Defendant’s Exhibit 9). Before the delivery of the ordered “bridge strand”, Bethlehem added a pad eye connection to each length of the strand. The pad eye connection was used in lieu of another connection and was secured to the butt end of the strand by welding. One function served by the pad eye connection was to prevent individual wires from unravelling. In addition, Bethlehem installed a socket connection on the lifting end of each strand. The lifting end of a length of bridge strand is situated at the opposite end of the pad eye connection. One purpose of the socket end connection was, like the pad end connection, to prevent individual wires from unravelling. Bethlehem installed the socket connection with molten zinc. Neither the plaintiff nor Bethlehem performed any further modifications upon or adaptations to the length of bridge strand ordered by Standard. The plaintiff paid for the bridge strand in full and, in October, 1973, Bethlehem delivered the ordered strand to the plaintiffs job site at the Gold Star Memorial Bridge. The strand was delivered by truck and was shipped on reels of 110 inch diameter and a 91/2 foot arc, with two pieces of strand per reel. (Bachta, direct, November 2, 1982, cross, November 4, 1982). From October, 1973 until April, 1974, the bridge strand was stored at the job site on the reels upon which it was delivered. (Bachta, cross, November 4, 1982). In late April, 1974, the bridge strand was removed from storage and the plaintiff began to install it into the jacking system. To install the cable, the plaintiff’s employees attached a boom to the strand by the strand’s pad eye bolt and threaded the strand through the grippers. The plaintiff’s employees removed the strand from the reel on which it had been stored by rolling the reel on a pipe. This rolling and threading process was long, slow and tedious. It involved the use of at least six and perhaps as many as ten men and consumed approximately four hours per cable. The cable unrolled at the rate of about one foot per minute. Quality control workers inspected the cable as it unrolled. (Bachta, cross, November 4, 1982). None of' the plaintiff’s personnel involved in the threading operation or the inspection noticed- any defects in the strand as it was removed from the reel. Although the slow, unrolling and threading process provided ample opportunity to observe kinks in the strand or individual wires appearing out of lay, no such problems were observed. With the exception of a weld break in the strand installed on the northwest shear leg, a break repaired by Standard and not considered serious enough to report to Bethlehem, the bridge strand appeared to be in the same condition when installed as when it was delivered to the plaintiff. (Bachta, cross, November 4, 1982; Gilbert, cross, November 16, 17, 1982). When the first cable was threaded, there were neither cable guides nor channel bars or. guides on the derricks. (Bachta, direct, November 3,1982). Soon after installation, however, both were added to protect the grippers and other parts of the jacking system, and to facilitate the jacking operation. At the very end of April or the very beginning of May, 1974, the plaintiff, according to specifications developed jointly by the plaintiff, Donald Brennan of ElgoodMayo, an expert engineer, and other expert consultants, welded cable guides to the shear legs for each of the bridge strand lifting cables. (Bachta, Deposition Transcript, October 26, 1982, at 351). These original cable guides consisted of steel pieces to which were welded ten inch diameter pipes. The guides had flanges on both ends to prevent the cable from slipping off and falling. Each guide was approximately three feet long, eighteen- inches deep, seven and one-half inches wide, and was shaped like an “I” beam. Each guide weighed approximately 150 pounds. (Bach-ta, direct, November 2, 3, 1982). The diameter' of the arc of the cables when they were hanging over the guides was no more than two to three feet. (Bachta, cross, November 4, 1982; Plaintiffs Exhibit 21). On or about May 7, 1974, the plaintiff installed two channel guides or bars according to its own plans and specifications. These channels were placed approximately one foot above each upper gripper as a supplement to the cable guides, which sat approximately six feet above the channel guides. The plaintiff installed these channels at the request of Elgood-Mayo, both to keep the cable from hanging over and damaging the grippers and to provide for a vertical entry and exit of the lifting cables into or from the grippers. (Bachta, direct, November 3, 1982). At the time this work was done, the “CONTRACTORS’ EQUIPMENT FORM (All Risk)” policy had already been acquired by the plaintiff. It was then in effect and had been since October 1, 1973. On May 11, 1974, the lifting system performed its first experimental lift, or “test pick,” without difficulty. During the test pick, the new center bridge span yet to be installed was lifted off of a barge in the river to a height of approximately fifteen feet and then lowered several times. The plaintiff undertook this exercise to ensure that all systems were functioning properly and to determine how long certain operations would take to complete. During the test pick, no stress was placed on the cable guides, as the lower, and not the upper section of the system, bore the weight. No defects or irregularities were noticed during this exercise. (Bachta, Deposition Transcript, October 26, 1982, at 357-60). On May 15, 1974, the plaintiff prepared for the first operational pick of the lifting system, the lowering of the old existing center span of the Gold Star Memorial Bridge. The plaintiff’s employees encountered two slight problems just prior to this pick. Before May 15, 1974, the lifting cable had only extended several feet above the upper gripper. However, as the length of the lifting cable above the upper gripper was increased in preparation for the first pick, an overhaul problem was experienced. In an attempt to remedy this problem, rope lines were tied to the pad eye ends and were held in place by ironworkers. Secondly, Standard experienced some difficulty in freeing the center span from the rest of the bridge. Eventually, the center span was cut away from the remaining sections of the bridge with an acetylene torch. When all four corners of the span had been cut, the bridge span swung free and its weight was transferred to the lifting system. (Bachta, direct, November 3, 1982; Gilbert, direct, November 16, 1982; Iacozza, direct, November 19, 1982). This event marked the first time that (1) the bridge strand cables had been lifted to their maximum height, and (2) the cable guides had borne the significant dead weight of the free end of the cable, approximately 2500 to 3000 pounds. (Bachta, direct and cross, November 3, 1982, cross, November 4, 1982, cross, November 12, 1982). Standard then began to lower the center span. After it had been lowered approximately one to two strokes of the hydraulic jack, about five to ten feet, a process which dragged the very heavy weight of the dead end of the cable over the single-point, small arc cable guides, the 150 pound cable guide on the northeast shear leg broke completely free from the shear leg at the weld, fell to the barge deck, and then bounced into the water. As a result, the approximately 2500 to 3000 pound free end of the cable cascaded violently into the channel bars below, striking and severely bending them just above the gripper system. This event also caused substantial damage to the A-l terminal box which housed critical components of the electrical, air and hydraulic systems, as well as a loss of electrical power. (Bachta, direct, November 3, 1982, cross, November 4, 1982, cross, November 10, 1982). Due to the loss of electrical power, the lowering operation ceased. Shortly thereafter, Standard discovered that the cable guide on the southwest shear leg, identical to that on the northeast shear leg, had begun to twist and was significantly bent. Damage, however, was limited to the northeast and the southwest cable guides. None of the remaining six cable guides exhibited damage at any time after this incident. None of the pieces of bridge strand deployed in the other six guides ever displayed damage to wires contained therein. (Baehta, direct, November 3, 1982, cross, November 4, 1982). Immediately, Standard began to repair the electrical and hydraulic systems and to install substitute cable guides on both the northeast and southwest shear legs. The new guides consisted of shackles, shives and chokers, also known as slings. The substitute guides allowed for a much greater arc for the bridge strand cable than did the original guides. In fact, the redesigned cable guide system installed permanently subsequent to May 23, 1974 increased the diameter of the arc of the cables from approximately 2 or 3 feet to 10 feet. Approximately forty minutes after the fall of the northeast cable guide, and when the remedial work was almost completed, one or more of the positioning cables holding the barges, which supported the entire lifting apparatus in place on the river, broke. The barge assembly drifted, and the derricks, still holding the suspended center span, or the suspended center span itself, made slight contact with the cantilever section of the remaining bridge. Tugboats were called in to secure the derricks. This accident, hereinafter referred to as the “second accident,” applied some force to the bridge strand lifting cable, as that cable was already supporting a 360 ton center span, when the contact occurred between the lifting system, the suspended center span, and the still-standing bridge section. Contrary to the plaintiffs contentions that a “big wind” caused the second accident, the Court finds that the wind was calm throughout the working day, and that, at the time of the second accident, the wind velocity was normal and calm, approximately ten to twenty knots. As a result of the second accident, further damage was sustained by the electrical, hydraulic and air systems. An electrical conductor was sheared and the hydraulic and air hoses and parts, which had previously been-secured to the derrick, became unsecured and dangled loose and damaged. Repair work continued until May 16, 1974. On May 17, 1974, Standard completed the lowering of the center span, placed it upon a transportation barge, and floated it away from the work site. On May 23, 1974, Standard began the second phase of the bridge dismantling procedure, namely, the lowering of the west cantilever portion of the bridge. The plaintiffs employees freed this section from the remaining structure, and began the lowering process of the section. Shortly after this second pick began,. Standard employees noticed that one or more of the wires contained in the northeast shear leg’s bridge strand had been severed and was being pushed away from the cable and outside of the grippers. (Baehta, direct, November 3, 1982). As a result, crew members encountered' great difficulty in working the cable through the gripper system, as the enlarged and damaged bridge strand could not pass through the grippers. To remedy the problem, Baehta ordered his crew to cut the broken wires and bind their ends to the cable with electrical tape. This operation allowed Standard to hand-feed the cable into and through. the grippers. (Bachta, direct, November 3, 1982). After the west cantilever span had been lowered several more strokes, Standard noticed a similar problem with the southwest shear leg strand. Similar repairs were conducted and the lowering continued. After the repaired sections of the cable passed through the grippers, Standard employees noticed that several more wires had been broken by the grippers and that some wires which comprised the strand had gone out of lay. (Bachta, direct, November 3, 1982). Standard employees expended three working days hand-feeding and repairing the broken strand. Eventually, the lowering of the west cantilever section was completed in this fashion. On May 29, 1974, in response to a call from Standard, Carl Smollinger, a Bethlehem Steel engineer in the Wire Rope Division, travelled to the Gold Star Bridge site for a field inspection. He was accompanied by Bethlehem Steel salesman John Bowles. Upon arriving, Smollinger and Bowles met briefly with Joseph Bachta and Howard Shea of Standard and with Gerald Levy and Donald Brennan of Elgood-Mayo, Smollinger, accompanied by Bowles and an ironworker, then proceeded to inspect the damaged cables while riding in a scale box, a platform hung by cables from a crane, along the suspended cables. Upon close observation, Smollinger observed seven broken wires, three in one of the cables and four in the other. The damage on the northeast bridge strand was thirty-seven (37) feet from the lifting end and one hundred forty-nine (149) feet from the eye or free end; the damage on the southwest bridge strand was seventy-eight (78) feet from the lifting and one hundred ten (110) feet from the eye end. The northeast damage extended for approximately nine (9) feet, and the southwest damage for approximately two (2) feet. The damage on the southwest cable was one hundred ten (110) feet away from the point at which wires had broken free from the weld, and there was no evidence of damage in between. (Bachta, cross, November 12, 16, 1982; Broderick, Tr. 109, 183). The damaged area on the northeast cable extended from slightly below the bottom gripper up to the channel bar, against which the dropped cable had fallen on May 15, 1974. (Bachta, cross, November 16,1982; Broderick, Tr. 183-84). The damage on the southwest strand was on the loose or free end, having passed over the cable guide, at time of the bending accident on May 15, 1974. With Bachta’s permission, Smollinger had an ironworker cut four samples from some of these broken wires for analysis. Several other samples had already been burned off by the time Smollinger arrived. Upon visual inspection, Smollinger noticed that the broken wires had been severed, not pulled apart or broken by fatigue. (Smollinger, Tr. 104, 113-14). The cable guide configuration which Smollinger observed on May 29 was the configuration in place at the time of the second pick on May 23. Upon dismounting the scale box, Smollinger informed Bachta that the broken wires had not significantly decreased the strength of the strand. In fact, Smollinger estimated that the broken wires resulted in only a 4% loss of strength, and so informed Bachta. Moreover, even representatives of United States Steel Corporation, a competitor of Bethlehem’s, told Bachta that several broken wires would not significantly weaken the bridge strand. (Bachta, cross, November 4, 1982). The other six cables, those not part of the northeast or southwest booms, were undamaged and were used without incident throughout the remainder of the job. Bachta, Bowles and Smollinger then went to lunch together. At this time, Bachta told Smollinger that he was about to have the lifting sockets burned off the damaged cables. This news upset Smollinger, because, as he informed Bachta, new sockets would be difficult to obtain upon such short notice. Without sockets, there was no longer any possibility of using the damaged cable strands to complete the job, despite the fact that they remained sufficiently strong to satisfy the plaintiff’s needs. (Smollinger, Tr. 159-61, 189-91; Bowles, direct, December 1, 1982). Smollinger’s efforts then turned from repair to replacement. Smollinger contacted the Bethlehem plant and was informed that there was no 3V8" diameter strand available, but that 3V4" strand was available and ready for shipping. Bethlehem was well aware at' that time that the new strand would be used for lifting. The plaintiff accepted this size bridge strand, asked for two 200-foot long pieces, and then proceeded to load the reels and the burned-off sockets onto a truck. (Bachta, direct, November 3, 1982; Bowles, direct, December 1, 1982; Smollinger, Tr. 193-94). At this time, Bachta understood that Standard would pay for the replacement strand, and Standard did. Bachta also specifically requested “bridge strand” and not wire rope, as the replacement cable strand. (Bachta, direct, November 3, 1982; Smollinger, Tr. 195-96). Thé truck carried Smollinger, the sockets and the reels to the Bethlehem plant in Williamsport, Pennsylvania. There, the sockets were installed on the replacement strand, and the new pieces were delivered to the Gold Star job site on June 1, 1974, approximately thirty-six hours after Smollinger’s visit. (Bachta, direct, November 3, 1982; Bowles, direct, December 1, 1982; Smollinger, Tr. 195). The new strand was successfully installed into the northeast and southwest shear legs and along with the six other, original pieces of bridge strand, was used without damage or problem throughout the rest of the job. Standard still owns the strand today, and plans to market its lifting system, using strand, for future jobs. In 1975, Bachta estimated that the strand was worth some $32,000 to Elgood-Mayo, the owners of the jacking system. ‘(Bachta, direct, November 3, 1982, cross, November 4, 1982; Defendant’s Exhibit 13). Experts from both sides of this dispute agreed that the broken wires in the northeast and southwest bridge strands were severed by the force of the grippers squeezing an out of lay, or displaced wire or wires into other wires. (Bachta, direct, November 3, 1982; Broderick, Tr. 177; Smollinger, Tr. 114-16; Defendant’s Exhibit ,5). Although the parties offered many, various theories concerning how these wires were displaced or popped out of lay, the Court finds only one of these theories persuasive. Forsaking its original spring of 1973 plans, which allowed for a diameter of over ten feet of are for the cable passing over the cable guides, the plaintiff and Brennan of Elgood-Mayo defectively designed new cable guides with an insufficient diameter, which were in place on May 15, 1974, the date of the initial problem. This defective design precipitated the damage in the following manner. Each cable guide, a single-point system, with an arc of only approximately three feet, caused the bridge strand to bend at an overly-Sharp angle, especially when the dead weight of the end length of the strand (approximately 2500-3000 pounds) was suspended over the cable guide. The pressure resulting from this bending forced the cable to go kitty-corner on the cable guide, and as the section of bridge was being let down, it pulled the cable over it with great friction and pressure, so as to snap off the northeast shear leg cable guide and severely bend the southwest shear leg cable guide. (Bachta, Deposition Transcript, October 26, 1982, at 370). As a consequence of the snapping of one cable guide and the bending of another, and the friction of the cable bending over the small arc of the cable guides, wires of the strands carried over each guide were popped out of lay. (Taylor, Deposition Transcript, at 27-30). When these displaced, or out of lay wires passed through the grippers, and were squeezed by the tremendous force generated thereby, the wires ruptured. This conclusion is reinforced and substantiated by persuasive evidence. First of all, it was virtually impossible for Bethlehem to have manufactured bridge' strand through its machinery with a wire out of lay. The machines utilized by Bethlehem to form individual wires into a completed bridge strand processed the individual wires through a head plate, or die, which aligned them. Any wires which overlapped or were displaced could not have fit through the headplate and would have been twisted off or broken. An engineer employed by Bethlehem since 1948 testified that he had never seen this occur. (Schwenke, Tr. 24-27, 40-42). Moreover, the strand sold to the plaintiff was part of a larger batch manufactured at the same time by Bethlehem and sold to another customer. Bethlehem never received any complaints from this other customer regarding the quality of the strand. (Smollinger, Tr. 180). Finally, although industry standards dictate that the outer wires of the strand should not be welded, evidence adduced by Bethlehem indicated that these outer layers were not, indeed, welded. (Schwenke, Tr. 49-55, 115). The plaintiff presented no evidence to the contrary. Secondly, the plaintiffs chief expert, Joseph Bachta, believed that the lack of a proper cable guide caused the damage to the bridge strand, and admitted that there were no defects in the strand itself. (Brennan, Deposition Transcript, at 45, 77; Andrews, cross, December 1, 1982). And in spite of the ample opportunity which they had to inspect the strand while it was being unrolled from its storage reel, no Standard employees discovered any defect in the bridge strand until after May 15, 1974, the date of the incidents being litigated here. (Bachta, cross, November 3, 4, 1982; Gilbert, cross, November 17, 1974). Thirdly, Bethlehem’s visual, chemical and metallurgical tests indicated that the wire samples met all specifications. The visual examination specifically revealed that the “cupped or dished contour” of the severed wires matched the dimension of the wires themselves, and concluded that “displaced external strand wires were squeezed under high loads until rupture occurred.” (Defendant’s Exhibit 5). Although in possession of damaged lengths of bridge strand from the very date of the accident, the plaintiff had never tested the samples itself, and has never sought to analyze the samples tested by Bethlehem. As a result, the Bethlehem tests stand uncontroverted. Fourthly, although neither Bethlehem nor the wire rope industry as a whole had published any recommendations concerning the arc of cable guide systems at the time of the incidents at issue, there is ample evidence that the plaintiff was then aware of the possible danger involved with an insufficient diameter. Under normal circumstances, bridge strand, if allowed to make its own arc, will not become noticeably out of round. However, during May, 1974, just before the May 15,1974 incident, Donald Brennan, an Elgood-Mayo engineer, informed Howard- Shea and even Joseph Bachta, that he feared the diameter was too small and that the cable guide, or fair leader should be some fifty to sixty times the diameter of the bridge strand used to protect the strand from damage. After May 15, 1974, Brennan informed Bachta that he definitely considered the small diameter to have been the cause of the damage. (Brennan, Deposition Transcript, at 17-18, 22, 24, 40-41; Bachta, direct, November 1982). Otherwise, a cable guide with an insufficient diameter could cause the bridge strand to kink or to flatten out or could indeed cause individual wires to break or to pop out of lay. (Brennan, Deposition Transcript, at 41; Taylor, Deposition Transcript, at 22). Moreover, in May, 1974, after the cable guides were installed, John Taylor, the superintendent in charge of the steel erection under Bach-ta, informed the latter that the friction or pressure generated by the cable bending over the small arc of the cable guides would damage the cable or would break the guides. (Taylor, Deposition Transcript, at 27-31). Most persuasively, after May 23, 1974, and after consulting with Brennan who theorized that a small cable guide diameter caused the damage to the strand, the plaintiff permanently redesigned the cable guide with a diameter of over ten feet. (Bachta, direct and cross, November 3, 1982; Bachta, cross November 12, 1982; Brennan, Deposition Transcript, at 17-18, 40-41). Since that time, and throughout the remainder of the raising and lowering operation at the Gold Star Memorial Bridge, no further damage occurred to any of the cable strand used or to the cable guides themselves. Bridge strand was appropriate for use in the jacking system employed by Standard in dismantling the Gold Star Memorial Bridge and erecting the new one. While strand is normally used in static applications, it has certain advantages over wire rope in lifting operations, having a' higher strength to weight ratio and a similar diameter for a given strength then does wire rope. Moreover, when used in conjunction with grippers, the smooth surface of bridge strand is beneficial for distributing the bearing pressures of the gripper along the entire face of the strand. Wire rope, which does not have a smooth surface, could not distribute the pressure equally along its outer layer. As long as bridge strand can travel along an arc with a sufficiently large diameter, and is protected from sharp edges, it serves well as lifting cable for a jacking system such as Standard’s. The fact that it was used in this fashion quite satisfactorily after the cable guide arc diameter was redesigned after May 23, 1974 illustrates this point. (Schwenke, Tr. 59-65, 71-72; Bachta, direct, November 3, 1982; Brennan, Deposition Transcript, at 47.) The Court finds that Bethlehem did not manufacture the ultimately damaged strand with any defect. Moreover, drawing reasonable conclusions as a consumer would, based upon knowledge common in the community, the Court finds that said strand was not unreasonably dangerous; it was not dangerous to an extent beyond that which would be contemplated by the ordinary consumer. Further, the Court finds that, at the time Bethlehem sold the strand to Standard, Bethlehem employees thought (1) that the strand was to be used as a static member of the proposed lifting system, and (2) that the cable guides would allow for a much greater diameter to the arc of the strand passing over them (some seventeen feet) than they actually did (approximately three feet) at the time of the incidents at issue. In sum, it was Standard’s design and use of such strand as an operational, and not a static member of the lifting system, stretching said strand over a single-point cable guide at an overly-sharp angle with an insufficient diameter to its arc which caused the damage to the strand. On or about October 1, 1973, Standard originally purchased a CONTRACTOR’S EQUIPMENT FORM (All Risk) insurance policy from the defendant Liberty Mutual. This policy covered the period from October 1, 1973 until October 1, 1974, and was in effect at the time of the incidents complained about. The CONTRACTORS’ EQUIPMENT FORM (All Risk) insurance policy (hereinafter, “the policy”) stated, in pertinent part: “3. THIS POLICY - INSURES AGAINST: All risks of direct physical loss or damage to the insured property from any external cause, except as hereinafter provided. “4. THIS POLICY DOES NOT INSURE AGAINST: (g) Loss or damage due and confined to wear and tear, mechanical breakdown, inherent vice, latent defect, gradual deterioration or depreciation, insects or vermin;” (Bold print in original) (Plaintiff’s Exhibit 1). On or about June 7, 1974, Standard gave written notice to Liberty Mutual that it had experienced “difficulty” in the operation of the floating derrick lifting system at the Gold Star Memorial Bridge job site. (Plaintiffs Exhibit 26). Standard filed a proof of loss under the date of June 9, 1974. This proof of loss, signed by Mr. Golding, Standard’s President, indicated that certain losses occurred on May 15, 1974 as a result of “wind storm damage,” and that such damage was not discovered until May 24, 1974. (Plaintiff’s Exhibits 27, 28, and 29), The damage was therein described as “removal and replacement of damaged cable.” The cost was estimated at approximately $150,000.00. In its investigation, Liberty Mutual, and Teledyne engineers it had hired to inspect the damage, encountered some difficulty with Standard employees on visits to the Gold Star site on the dates of July 15, 1974 and August 15, 1974. However, the Court finds that Standard provided Liberty Mutual with reasonable notice and cooperation under the circumstances, that Liberty Mutual was able to conduct an investigation satisfactory for its needs, that Liberty Mutual was not prejudiced in any material way in its investigation of the damages claimed by Standard, and that Liberty Mutual’s interests were not adversely affected in any substantial or material way. The defective design of the cable guides by the plaintiff was the proximate cause of all damage to the bridge strand cable itself, to the northeast cable guide that broke off and fell into the river, the southwest cable guide, which was bent, the northeast channel bars or guides, and to the electrical, hydraulic, and air systems which became impaired when terminal box A-l was hit by the falling cable. In short, the defective design of the cable guides caused all the damage which resulted from the fall of the northeast cable guide and the bending of the southwest cable guide. In early 1973, the cable guides were originally correctly designed in the preliminary drawings and specifications, with a planned arc of approximately ten feet in diameter. On June 6, 1973, however, the plaintiff finalized its plan for a cable guide allowing for an arc of only two to three feet in diameter. These defectively designed cable guides were ultimately installed in early May, 1974. At the time of the issuance of the insurance policy, neither party thereto was aware of the defective cable guide design. The second accident for which a claim was filed concerned the breaking of one of the positioning cables, which caused further damage to the electrical, hydraulic and air systems. This damage included the shearing of an electrical conductor, and the unfastening of certain hydraulic and air hoses and parts. As this case was bifurcated, and tried on the issue of liability only, damages cannot be established until a hearing in damages occurs. Conclusions of Law The Court’s jurisdiction over this ease is based upon diversity of citizenship under 28 U.S.C. § 1332. As such, the Court must apply the substantive law of the forum state, Connecticut, Erie R.R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), including Connecticut’s choice of - law rules. Klaxon v. Stentor Electric Manufacturing Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 1021, 85 L.Ed. 1477 (1941), Gannett Co. v. Register Publishing Co., 428 F.Supp. 818, 824 (D.Conn.1977). Both actions presented here revolve around contracts which had their operative effect or place of performance in Connecticut: (1) a contract to deliver bridge strand for use at a job site in Connecticut, and (2) a contract to provide insurance coverage for certain property in Connecticut. Therefore, Connecticut law governs. Jenkins v. Indemnity Insurance Co., 152 Conn. 249, 253, 205 A.2d 780 (1964): Whitfield v. Empire Mutual Insurance Co., 167 Conn. 499, 506, 356 A.2d 139, 143 (1975). A. Strict Liability Claim Against Bethlehem Steel Standard avers that Bethlehem is strictly liable in tort for allegedly having manufactured a defective product which harmed the plaintiff. As the events in this case occurred before the effective date of Connecticut’s Product Liability Act, Conn.Gen. Stat. § 52-572m et seq., this case is governed by pre-act Connecticut common law, which drew heavily upon § 402A of the Restatement (Second) of Torts. Under § 402A, the plaintiff must prove, by a preponderance of the evidence, five elements. These elements are, that: “(1) the defendant was engaged in the business of selling the product; (2) the product was in a defective condition unreasonably dangerous to the consumer or user; (3) the defect caused the injury for which compensation was sought; (4) the defect existed as the time of the sale; and (5) the product was expected to and did reach the consumer without substantial change in condition.” Giglio v. Connecticut Light & Power, 180 Conn. 230, 234, 429 A.2d 486 (1980). No dispute exists concerning elements (1) and (5), but the Court finds that the plaintiff has failed to prove an unreasonably dangerous defect under (2) or causation under (3) by a fair preponderance of the evidence. As element (2) indicates, the plaintiff must prove a defective condition in the product which is “unreasonably dangerous” to those using the product. The Connecticut Supreme Court has defined this term as “ ‘dangerous to an extent beyond that which would be contemplated by the ordinary consumer who purchases it, with the ordinary knowledge common to the community as to its characteristics.’ ” Id., citing Comment i, § 402A Restatement (Second) Torts, (1965). A plaintiff need not prove a “specific defect,” as long as he can prove an “unspecified dangerous condition.” Id., 180 Conn. at 235, 429 A.2d 486. The question of “whether a product is unreasonably dangerous is a question of fact to be determined by” the trier of fact, drawing its own reasonable conclusions based upon the expectations of an ordinary consumer and community common knowledge. Id. The Connecticut cases illustrate that the “unspecified dangerous condition” doctrine stands for the proposition that, given the facts surround many strict liability cases (which often involve grave damage to, or total destruction of the allegedly defective property), a strict liability plaintiff may not be able to specify which component part of a product caused the harm and need not do so. Rather, as in any case, such a plaintiff may marshal “circumstantial evidence to establish the dangerous condition of the product.” Liberty Mutual Ins. Co. v. Sears, Roebuck & Co., 35 Conn. Supp. 687, 690-91, 406 A.2d 1254 (1979). See also Kileen v. General Motors Corporation, 36 Conn.Supp. 347, 349, 421 A.2d 874 (1980). As such, where “other identifiable causes are absent,” then “mere evidence of a malfunction” may be enough to allow the trier of fact to draw an inference, by a preponderance of the evidence, that the product was unreasonably dangerous and defective. Id., Liberty Mutual, supra. Such is not the case .here. The Court, sitting as the trier of fact in this court-tried case found, by drawing upon community common knowledge and ordinary consumer expectations, that the totality of credible evidence, both direct and circumstantial, demonstrates that the strand was neither defective nor unreasonably dangerous. The cable strand in issue was not “dangerous to an extent beyond that which would be contemplated by the ordinary consumer who purchases it,” and was manufactured free of defect. Moreover, the Court has identified the cause of the damage to the strand. Only when the strand was stretched over a cable guide improperly designed with an insufficient arc to its diameter, did the northeast cable guide snap and the southwest cable guide bend, causing the damage to the “bridge strand.” See Findings of Fact, at 26-32. The plaintiff has failed to carry its burden of persuasion concerning the product being defective and unreasonable dangerous. Similarly, as the Court has found the damage resulted from a source external to the strand itself, the plaintiff cannot prove a causal connection between any “defect” inherent in the strand and the damage to the strand, even if the plaintiff had been able to prove an unreasonably dangerous defendant in the strand. Thus, the plaintiff cannot recover from Bethlehem under a theory of strict liability in tort. B. Implied Warranty Claims Against Bethlehem Steel The plaintiff claims that Bethlehem has breached its implied warranty of merchantability under Conn.Gen.Stat. § 42a-2-314 and its implied warranty of fitness for a particular purpose under Conn.Gen.Stat. § 42a-2-315. The Court finds (1) that Bethlehem successfully disclaimed both implied warranties, and (2) assuming arguendo that Bethlehem did not effectively disclaim both implied warranties, (a) no implied warranty of fitness for a particular purpose was ever created, and (b) the plaintiff has failed to prove a breach of the implied warranty of merchantability. The Court shall address these issues seriatim. 1. Bethlehem Successfully Disclaimed Both Warranties. Connecticut General Statutes § 42a-2-314, the implied warranty of merchantability section, states, in pertinent part: “(1) Unless excluded or modified as provided by section 42a-2-316, a warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind____ “(2) Goods to be merchantable must be at least such as (a) pass without objection in the trade under the contract description; ... (c) are fit for the ordinary purpose for which such goods are used, and (d) run, within the variations permitted by the agreement, of even kind, quality and quantity within each unit and among all units involved____” Connecticut General Statutes § 42a-2-315, the implied warranty of fitness for a particular purpose section, provides as follows: “Where the seller at the time of contracting has reason to knew 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 section 42a-2-316 an implied warranty that the goods shall be fit for such purpose.” Both of these implies warranties, by their own terms, are subject to exclusion or modification by the disclaimer section, Conn.Gen.Stat. § 42a-2-316. This section posits, in relevant part: “(2) Subject to subsection (3), 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 in writing and conspicuous____ “(3) Notwithstanding subsection (2) ... (c) an implied warranty can also be excluded or modified by course of dealing----” The Code defines “course of dealing” as “a sequence of previous conduct between the parties to a particular transaction which is fairly to be regarded as establishing a common basis of understanding for interpreting their expression and other conducts.” Conn.Gen.Stat. § 42a-1-205(1).- Further, under the Code, “[a] course of dealing between parties ... give[s] particular meaning to and supplements] or qualif[ies] terms of an agreement.” Id., at (3). The Official Code Comment to this section, adopted by the Connecticut legislature, teaches that, “ ‘course of dealing’ may enter the agreement ... by tacit recognition,” as well as by explicit provisions listed in the agreement itself. Id., Official Comment 3. In determining whether Bethlehem has effectively excluded the implied warranties of merchantability and fitness for a particular purpose, the Court is guided by the general purposes and policies of the Code. The Code was designed to “simplify, clarify and modernize the law of commercial transactions.” Conn.Gen.Stat. § 42a-1-102. See also W. Starr, “Connecticut Code Comments,” Conn.Gen.Stat. § 42a, Art. I Introduction, at 40 (hereinafter “Starr”). The authors intended the Code to render “the law of commercial transactions ..., so far as reasonable, liberal and nontechnical.” J. White, R. Summers, Uniform Commercial Code, (2d Ed.1980), at 15 (hereinafter “White & Summers”). In this spirit, “the Code ‘de-formalizes’ the requirements for the formation of contract in Article Two,” id., and restates the law concerning “warranties and the effect of disclaimers of warranties ... in terms more consistent with current business ethics and with less emphasis on the technicalities of the common law.” Starr, Art. 2 Introduction, at 88. Nowhere is the handiwork of this spirit clearer than when dealing with merchants. “Merchants,” by Code definition, include, inter alia, those who deal “in goods of the kind ... involved in the transaction” at hand. Conn.Gen.Stat. § 42a-2-104(1). Article 2 of the Code “assumes that transactions between [such] professionals in a given field require special and clear rules which may not apply to a casual or inexperienced seller or buyer,” Conn.Gen.Stat. § 42a-2-104, Official Comment 1, and applies a special standard of “good faith” to a merchant’s behavior. While the Code requires “good faith” of all parties in the “performance and enforcement of all agreements or duties,” Conn.Gen.Stat. § 42a-1-203, Official Comment, it also requires merchants to be “honest[] in fact” and to observe “reasonable commercial standards of fair dealing in the trade.” Conn.Gen.Stat. § 42a-2-103. The final preliminary step before deciding whether Bethlehem effectively excluded both implied warranties in its sale of “bridge strand” to Standard is to examine the parties individually and their previous course of dealing with each other. Both parties were merchants in this transaction. Bethlehem both manufactured and distributed the bridge strand it sold to Standard. Standard, although never previously a purchaser of bridge strand, had often bought and used wire rope, a product of the same “kind” as bridge strand, in its operations. The two parties had a long-standing, 62-year relationship as buyer and seller of steel-based products at the time of the transaction at issue. During this relationship, which constituted a course of dealing, as that phrase has been defined by the Code (see § 42a-1-205(1), supra) Joseph Bachta, Standard’s purchasing agent for this project, came to understand that Bethlehem would not sell its products without excluding the implied warranties of merchantability and fitness for a particular purpose. Thus, from the course of dealing between Standard and Bethlehem, Bachta knew that any purchase of steel products from Bethlehem would be contingent upon the exclusion of both of these implied warranties. Bearing all of these principles — the Code definitions of warranty and effective disclaimer, the general policies a