Full opinion text
ORDER TRAXLER, District Judge. I. INTRODUCTION This action is before the court on the parties’ cross-motions for partial summary judgment pursuant to Rule 56(c) of the Federal Rules of Civil Procedure. In their second amended complaint, Plaintiffs, a conglomeration of corporations and their insurers, (collectively, “Myrtle Beach”), assert claims of common law negligence and breach of implied warranty of merchantability pursuant to the Uniform Commercial Code as adopted in South Carolina, see S.C.Code Ann. §§ 36-1-101 to 36-10-103 (Law.Co-op.1976 & Supp. 1992), against Defendant Emerson Electric Company (“Emerson”), contending that Emerson is liable to Myrtle Beach for damages resulting from injury to property owned by the United States. Conversely, Emerson asserts that Myrtle Beach cannot proceed on its common law negligence claim because this action is grounded solely in contract and therefore Myrtle Beach is relegated to the limited remedies embodied in the contract between the parties. Concluding that under South Carolina law Myrtle Beach’s negligence claim cannot be maintained and that the limited remedy of repair and replacement is the sole remedy to which Myrtle Beach is entitled under the breach of implied warranty, this court grants Emerson’s motion for partial summary judgment and denies Myrtle Beach’s motion for partial summary judgment. II. THE FACTS Myrtle Beach, a corporation with its headquarters in Houston, Texas, but transacting business in South Carolina, supplied and stored fuel for the United States Air Force at Myrtle Beach Air Force Base (“Base”), property owned by the United States. In 1979, Myrtle Beach and one of its principals, Standard Southern Corporation (“Standard”), also a Texas corporation, contracted with the United States to install a fuel metering system to link storage tanks of Myrtle Beach and the Government. Pursuant to this agreement, Myrtle Beach and Standard hired Gonzalo Ancira (“Ancira”) to design the metering system. Concluding that the metering system should incorporate an air eliminator, Ancira solicited several bids for the production of such a mechanism and recommended that the air eliminator manufactured by Brooks Instrument Division of Emerson Electric Company (“Brooks”) be incorporated into the metering system. Like Myrtle Beach and Standard, Brooks and Emerson are also Texas corporations. Brooks’s bid quoted a price of $1,145.00 for the cost of the air eliminator. Additionally, the quotation contained the following disclaimer: WARRANTY: All Brooks products (other than resale, custom and electro-mechanical equipment not manufactured by Brooks), when operated under the conditions stipulated by Brooks in the operating manual for the product are warranted against defect in workmanship and materials for one year from date of shipment and to conform to the written specifications. This constitutes Brooks’ only warranty in connection with this sale and is in lieu of all other warranties, expressed or implied, written or oral. THERE ARE NO IMPLIED WARRANTIES OF MERCHANTABILI- TY OR FITNESS FOR A PARTICULAR PURPOSE THAT APPLY TO THIS SALE. No employee, agent, dealer or other person is authorized to give any warranties on behalf of Brooks, nor to assume for Brooks any other liability in connection with any of its products without prior written approval by an officer of Brooks. Limitation of Remedy: Brooks will repair or replace at Brooks’ option, F.O.B. factory, any Brooks parts defective in workmanship or materials if such part is returned, freight prepaid, within one year from date of shipment to the nearest factory authorized service station or to the factory. It is agreed that such replacement or repair is the exclusive remedy available from Brooks should any of Brooks products prove defective. Brooks is not liable for damages of any sort, including incidental and consequential damages. The quotation supplied by Brooks therefore explicitly disclaimed any implied warranties, limited Myrtle Beach to a remedy of repair or replacement, and excluded incidental and consequential damages. These warranty provisions appeared on the reverse side of page one on the two-page quotation. Aneira forwarded this quotation to Standard, writing “[pjlease place purchase order with Brooks Instrument Division as quoted.” In turn, Standard wrote to Brooks, attached a copy of Brooks’s quotation, which included the provisions previously recited, and requested that Brooks “[p]lease ship the [air eliminator] ... [a]s per your quotation.” Brooks complied and shipped the air eliminator to South Carolina, where it was installed by Myrtle Beach in 1980. These transactions were negotiated in Texas. On January 15, 1981, approximately ten months after installation, the air eliminator ruptured and roughly 123,000 gallons of fuel spilled on Base premises. The United States, concluding that Myrtle Beach was responsible for the spill, requested that it be reimbursed for the loss of the fuel. Myrtle Beach initially denied liability and refused reimbursement, but the dispute was subsequently settled on Myrtle Beach’s payment of $80,000 to the Government for the fuel. Myrtle Beach incurred $23,000.00 in attorneys’ fees and expenses in this litigation. Greater than the costs of the spilled fuel, however, and the principal damages sought by Myrtle Beach, are the costs incurred by Myrtle Beach in cleaning up the spill at the Government’s order. Faced with high clean up costs, Myrtle Beach filed a complaint in the District of South Carolina in June of 1986. In its original complaint, Myrtle Beach, contending that South Carolina law applies to this action, alleged four claims: (1) strict liability in tort; (2) violation of the South Carolina Unfair Trade Practices Act, see S.C.Code Ann. §§ 39-5-10 to 39-5-160 (Law.Co-op.1976); (3) breach of implied warranty; and (4) negligence. Emerson, asserting that Texas law governed disposition of this action, moved for partial summary judgment with respect to all of Myrtle Beach’s claims. Another district judge to whom this case was originally assigned granted Emerson’s motion with respect to the strict liability and unfair trade practices claims in 1988. The prior district judge, however, without comment, denied Emerson’s motion regarding the breach of implied warranty of merchantability and negligence claims. In its second amended complaint before this court, the only claims are for breach of implied warranty of merchantability and negligence. Despite the prior ruling, all parties have resubmitted the issues to this court. Because of developments in the law, this court finds reviewing these issues appropriate. Accordingly, at the behest of the parties, this court considers the claims against Emerson for breach of implied warranty and negligence. The court commences its disposition by determining what law governs this action. III. CHOICE OF LAW The threshold issue facing the court is determining the applicable law. Myrtle Beach contends that South Carolina law applies with respect to the alleged negligence claim because the alleged injury occurred in this forum; likewise, Myrtle Beach contends that South Carolina law applies to the breach of implied warranty claim under South Carolina’s choice of law provision pursuant to the South Carolina Uniform Commercial Code. Conversely, Emerson asserts that Texas law governs the disposition of the breach of implied warranty claim pursuant to the Texas Uniform Commercial Code and that the statute of limitations has expired on this claim thereby barring it. Pursuant to Erie Railroad v. Tompkins, 304 U.S. 64, 78-79, 58 S.Ct. 817, 822-23, 82 L.Ed. 1188 (1938), a federal court exercising diversity jurisdiction, as here, must apply the substantive law of the forum state in which it sits. Extrapolating from Erie, the Supreme Court held in Klaxon Co. v. Stentor Electric Manufacturing Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 1021, 85 L.Ed. 1477 (1941), that choice of law is a substantive matter, and therefore federal courts sitting in diversity must apply the choice of law rule of the forum state, here, South Carolina. With these propositions in mind, the court addresses the choice of law rule with respect to each claim. A. The Tort Claim South Carolina law provides that the substantive law governing a tort action is determined by the state in which the injury occurred, commonly referred to as the lex loci delicti rule. See Algie v. Algie, 261 S.C. 103, 198 S.E.2d 529, 530 (1973); Oshiek v. Oshiek, 244 S.C. 249, 136 S.E.2d 303, 305 (1964). Under the lex loci delicti rule, this court must apply the substantive law of South Carolina because the alleged injury occurred here. Accordingly, because South Carolina is the situs of the injury, the law of South Carolina applies to Myrtle Beach’s alleged negligence claim. B. The Contract Claim Myrtle Beach’s breach of implied warranty claim is asserted pursuant to S.C.Code Ann. § 36-2-314 of the South Carolina Uniform Commercial Code, S.C.Code Ann. §§ 36-1-101 to 36-10-103 (Law.Co-op. 1976) (“Uniform Commercial Code”). The Uniform Commercial Code provides for choice of law: Except as provided hereafter in this section, when a transaction bears a reasonable relation to this State and also to another state or nation the parties may agree that the law either of this State or of such other state or nation shall govern their rights and duties. Failing such agreement this act applies to transactions bearing an appropriate relation to this State. S.C.Code Ann. § 36-1-105(1). Under this choice of law provision, the law of South Carolina applies provided that the transactions between the parties bear an “appropriate relation” to the forum state; and the parties have not, as here, provided for choice of law. Unfortunately, what constitutes an “appropriate relation” is not defined in subsection 36-1-105(1); and the courts of South Carolina have not construed or interpreted the term with respect to South Carolina choice of law rules. The Fourth Circuit, however, has concluded that the “appropriate relation” test mirrors the “most significant relationship” test of conflicts of laws analysis, which holds that “the law of the state with the ‘most significant relationship’ to the matter at issue is applied.” Compliance Marine, Inc. v. Campbell (In re Merritt Dredging), 839 F.2d 203, 206-07 (4th Cir.), cert. denied, 487 U.S. 1236, 108 S.Ct. 2904, 101 L.Ed.2d 936 (1988). The Merritt Dredging court therefore defined “appropriate relation” in terms of whether the forum state had a significant interest in resolving the disputed issue. Id. Apart from binding precedent, this court notes that the South Carolina Reporter’s Comments to subsection 36-1-105(1) state that “the forum state shall apply its law if it has a reasonable relationship with the contract.” Accordingly, this court must determine whether South Carolina has a suffieiently “significant interest” justifying application of the forum’s law. Under the facts of this case, the court concludes that South Carolina law should be applied. First, while the negotiations occurred in Texas, the injury was sustained in South Carolina; thus, the injury occurred in the forum. This occurrence strongly favors application of South Carolina law. Second, Myrtle Beach transacts business in South Carolina; therefore, a party with contacts in South Carolina is bringing this action in the forum. Again, this favors application of the forum’s law. Finally, the air eliminator was shipped to South Carolina and installed by Myrtle Beach in South Carolina; hence, the part was finally attached in the forum. The court concludes that these reasons compel application of South Carolina law to the breach of implied warranty of merchantability claim. See generally Thornton v. Cessna Aircraft Co., 703 F.Supp. 1228, 1234 (D.S.C. 1988) (holding that because decedent was a resident of South Carolina, purchased the defective product in South Carolina, and maintained the defective product in South Carolina, subsection 36-1-105(1) compelled that South Carolina law should be applied because South Carolina had an appropriate relation to the action), aff'd, 886 F.2d 85 (4th Cir.1989). IV. THE SUMMARY JUDGMENT STANDARD Rule 56(c) of the Federal Rules of Civil Procedure provides that summary judgment “shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Thus, the Rule requires that the court enter judgment against a party who, “after adequate time for ... discovery fails to make a showing sufficient to establish the existence of an element essential to that party’s case, and on which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). The party seeking summary judgment shoulders the initial burden of demonstrating that there is no genuine issue of material fact. Id. at 323, 106 S.Ct. at 2553. Accordingly, to prevail on a summary judgment motion, the movant must demonstrate that: (1) there is no genuine issue as to any material fact; and (2) that he is entitled to judgment as a matter of law. A fact is deemed “material” if proof of its existence or nonexistence would affect the disposition of the case under the applicable law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). An issue of material fact is “genuine” if the evidence so offered is such that a reasonable jury might return a verdict for the non-movant. Id. at 257, 106 S.Ct. at 2515. In determining whether a genuine issue has been raised, the court must construe all inferences against the movant and in favor of the non-movant. Id. at 257-58, 106 S.Ct. at 2514-15. On a summary judgment motion, the court “cannot try issues of fact; it can only determine whether there are issues to be tried.” Heyman v. Commerce & Indus. Ins., 524 F.2d 1317, 1319-20 (2d Cir.1975). The non-movant, however, “cannot create a genuine issue of material fact through mere speculation or the building of one inference upon another.” Beale v. Hardy, 769 F.2d 213, 214 (4th Cir. 1985). Rather, if the evidence “is so one-sided that one party must prevail as a matter of law,” the court must enter summary judgment. Anderson, 477 U.S. at 251-52, 106 S.Ct. at 2512. Hence, the non-movant, to survive the motion, may not rest on the allegations averred in his pleadings; rather, he must demonstrate that specific, material facts exist that give rise to a genuine issue. Celotex Corp., 477 U.S. at 324, 106 S.Ct. at 2553. Summary judgment serves the useful purpose of disposing of meretricious, pretended claims before the court and parties become “entrenched in a frivolous and costly trial.” Donahue v. Windsor Locks Bd. of Fire Comm’rs, 834 F.2d 54, 58 (2d Cir.1987). The courts, therefore, should not be reluctant to grant summary judgment in appropriate cases; indeed, summary judgment is mandated where appropriate. See, e.g., Herman v. City of Chicago, 870 F.2d 400, 404 (7th Cir. 1989); Meiri v. Dacon, 759 F.2d 989, 998 (2d Cir.), cert. denied, 474 U.S. 829, 106 S.Ct. 91, 88 L.Ed.2d 74 (1985); United States v. Porter, 581 F.2d 698, 703 (8th Cir.1978); Estate of Detwiler v. Offenbecher, 728 F.Supp. 103, 104 (S.D.N.Y.1989); Burleson v. Illinois Farmers Ins. Co., 725 F.Supp. 1489, 1490 (S.D.Ind.1989). In a recent trilogy of decisions — Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); and Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) — the Supreme Court has consistently reaffirmed its endorsement of pretrial resolution and summary disposition. These decisions reflect the mandatory nature of Rule 56. In Celotex Corp., the Court stated: Summary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole____ Rule 56 must be construed with due regard not only for the rights of persons asserting claims and defenses that are adequately based in fact to have those claims and defenses tried to a jury, but also for the rights of persons opposing such claims and defenses to demonstrate in the manner provided by the Rule, prior to trial, that the claims and defenses have no factual bases. Celotex Corp., 477 U.S. at 327, 106 S.Ct. at 2555 (citations and internal quotation marks omitted). The law therefore compels that summary judgment be entered if the complainant’s action cannot be maintained. Against this procedural standard, the court examines the merits. Y. THE MERITS Before addressing the merits, this court makes some general, yet crucial, observations concerning this action. Undisputedly, both Myrtle Beach and Emerson are sophisticated commercial entities that enjoy relatively equal bargaining power. The impetus giving rise to this suit is a commercial transaction governed by the law of contracts as codified by the Uniform Commercial Code. Stripped to its essentials, therefore, this a contract action executed in a commercial setting between two merchants that bargained for a particular product. In this context, this court examines Myrtle Beach’s claims. Myrtle Beach attempts to assert both a breach of implied warranty of merchantability claim and a tort claim against Emerson, contending that the contract claim does not preclude the tort claim. Emerson counters that this case is solely governed by the law of contract and that no tort claim lies. The court addresses Myrtle Beach’s claims separately. A. The Contract Claim The Uniform Commercial Code provides for both express and implied warranties. See S.C.Code Ann. §§ 36-2-313 to 36-2-315. The Uniform Commercial Code, however, also provides that parties may exclude or modify, or both, the implied warranties of merchantability or fitness for a particular purpose subject to certain conditions, see S.C.Code Ann. § 36-2-316(2), (3), but that express warranties may not be disclaimed, see § 36-2-316(1). The court therefore must first determine the type of warranties, if any, that were created in this transaction and then determine if any implied warranties were properly excluded. 1. Implied Warranty a. Creation Implied warranties are created and disclaimed pursuant to the Uniform Commercial Code. See generally §§ 36-2-313 to 36-2-318. For example, a warranty of merchantability is implied in a contract for the sale of goods if the vendor is a merchant with respect to goods of that type. See § 36-2-314. Similarly, an implied warranty of fitness for a particular purpose arises if the vendor knows when the contract is formed that the purchaser is relying on the vendor’s skill or judgment in furnishing the goods. See § 36-2-315. Both of these implied warranties may be disclaimed. See § 36-2-316. Because the implied warranty of merchantability arose in this case, the court must now determine whether it was properly disclaimed. This inquiry requires that the court determine whether the disclaimer was express or implied. The express disclaimer of implied warranties provision of the Uniform Commercial Code provides: (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 by a writing and conspicuous. Language to exclude the implied warranty of merchantability or of fitness for a particular purpose must be specific, and if the inclusion of such language creates an ambiguity in the contract as a whole it shall be resolved against the seller. S.C.Code Ann. § 36-2-316(2). Apart from providing the express method for disclaiming implied warranties, the Uniform Commercial Code also provides for alternative methods for disclaiming implied warranties: (3) Notwithstanding subsection (2) (a) unless the circumstances indicate otherwise, all implied warranties are excluded by specific language which in common understanding calls the buyer’s attention to the exclusion of warranties and makes plain that there is no implied warranty; and (b) when the buyer before entering into the contract has examined the goods or the sample or model as fully as he desired or has refused to examine the goods there is no implied warranty with regard to defects which an examination ought in the circumstances to have revealed to him; and (c) an implied warranty can also be excluded or modified by course of dealing or course of performance or, between merchants, by usage of trade. S.C.Code Ann. § 36-2-316(3)(a)-(c). Here, the disclaimer is express because it is embodied in the contract between the parties. The various alternative methods for disclaiming implied warranties found in subsection 36-2-316(3) simply do not apply. Rather, the rights and remedies of the parties are expressly articulated in their written contract. Because here the parties are bound by a written instrument, subsection 36-2-316(2) applies to Myrtle Beach’s breach of warranty of merchantability claim. b. Effectiveness of Disclaimer Concluding that the express disclaimer provision of subsection 36-2-316(2) applies further narrows the issue to determining whether Emerson properly disclaimed any implied warranties as prescribed by the statute. To exclude the implied warranty of merchantability, subsection 36-3-316(2) requires that the disclaiming language “mention merchantability,” be “conspicuous,” and be “specific.” The statute further provides that any ambiguity in the purported disclaimer is to be construed against the seller. Of subsection 36-2-316(2)’s three requirements, the Uniform Commercial Code only defines “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 ... is conspicuous. Language in the body of a form is “conspicuous” if it is in larger or other contrasting type or color____ Whether a term or clause is “conspicuous” or not is for decision by the court. S.C.Code Ann. § 36-1-201(10). The instant disclaimer must be examined in light of these requirements. Disclaimers in written instruments pursuant to subsection 36-2-316(2) are valid contractual provisions because they are expressly provided for by the Uniform Commercial Code and are to be enforced when agreed upon because “courts are compelled to give effect to the intent of the parties.” Valtrol, Inc. v. General Connectors Corp., 884 F.2d 149, 152 (4th Cir.1989) (sustaining disclaimer as valid). Accordingly, the instant disclaimer will be upheld if it satisfies the criteria of subsection 36-2-316(2). In Investors Premium Corp. v. Burroughs Corp., 389 F.Supp. 39 (D.S.C.1974), two commercial entities disputed the validity of a disclaimer clause strikingly similar to the present disclaimer: THERE ARE NO UNDERSTANDINGS, AGREEMENTS, REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED (INCLUDING ANY REGARDING MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE) NOT SPECIFIED HEREIN, RESPECTING THIS CONTRACT OR THE EQUIPMENT HEREUNDER. THIS CONTRACT STATES THE ENTIRE OBLIGATION OF SELLER IN CONNECTION WITH THIS TRANSACTION. Id. at 45. The court sustained the disclaimer because “the exclusionary language is set out in a separate paragraph in large contrasting type — being in ALL CAPITAL LETTERS.” Id. at 45. Likewise, in Childers & Venters, Inc. v. Sowards, 460 S.W.2d 343 (Ky.1970), the court enforced a disclaimer of implied warranties against a consumer by a corporate entity, even though the disclaiming language was on the reverse side of the contract, because the clause was printed in larger, darker print than the remainder of the instrument. Id. at 344-45. See also Jaskey Finance & Leasing v. Display Data Corp., 564 F.Supp. 160, 165 (E.D.Pa.1983) (holding that disclaimers printed in distinguished type were not rendered inconspicuous because they were located “on the reverse side of the contracts”). In Walter E. Heller & Co. v. Convalescent Home of First Church of Deliverance, 49 Ill.App.3d 213, 8 Ill.Dec. 823, 365 N.E.2d 1285 (1977), the court enforced a disclaimer of implied warranties even though the disclaimer fell under the heading ‘Warranties.” Id., 8 Ill.Dec. at 828, 365 N.E.2d at 1290. The court concluded that the disclaimer was effective because it was printed in large type and the contract was only two pages in length. Id. In South Carolina Electric & Gas Co. v. Combustion Engineering, Inc., 283 S.C. 182, 322 S.E.2d 453 (Ct. App.1984), however, the court refused to enforce a purported disclaimer of implied warranties because the disclaiming language not only failed to mention merchantability as the statute requires, but also because the disclaiming language was on page 17 of a twenty-two-page, “mostly single-spaced” instrument and was “indistinctive both as to color and as to type.” Id., 322 S.E.2d at 456. Similarly, in Cooley v. Salopian Industries, 383 F.Supp. 1114 (D.S.C.1974), the court concluded that a purported disclaimer was ineffeetive because it was “buried” in a lengthy document and was “not in larger or other contrasting type or color.” Id. at 1118 (citation and internal quotation marks omitted). The status of the parties is material in resolving the issue of whether language is conspicuous. For example, in American Electric Power Co. v. Westinghouse Electric Corp., 418 F.Supp. 435 (S.D.N.Y.1976), the court enforced a clause disclaiming implied warranties, with little reference to location, size, or color of print. After observing that the Uniform Commercial Code expressly provides for disclaimers, the court succinctly stated: “It strains credulity to suggest that plaintiffs had no notice or were unaware of the exclusion of implied warranties in the ... contract.” Id. at 451 n. 22. Similarly, the court in AMF, Inc. v. Computer Automation, Inc., 573 F.Supp. 924 (S.D.Ohio 1983), also noted that the “trend” in determining whether a disclaimer is conspicuous “is to determine if the bargaining strength and commercial sophistication of the parties made it reasonable that the limiting language was brought to the attention of the parties.” Id. at 929. See also Avenell v. Westinghouse Elec. Corp., 41 Ohio App.2d 150, 70 O.O.2d 316, 324 N.E.2d 583, 586-87 (1974) (holding that disclaimer was conspicuous among other reasons because the purchaser was a “prominent, sophisticated entity”). Thus, the court must consider the status of the parties to the transaction in its calculus for determining what constitutes conspicuous language. The principle to be distilled from these cases is that in order for a disclaimer to be conspicuous, it must have particular distinction. Equally, the court must examine the nature of the parties to the transaction in undertaking its “conspicuous” analysis. The court concludes that the various factors to be considered by a court in determining whether a document is conspicuous for purposes of disclaiming an implied warranty pursuant to subsection 36-2-316(2) include the following: (1) the color of print in which the purported disclaimer appears; (2) the style of print in which the disclaimer is written; (3) the size of the disclaiming language, particularly in relation to other print in the document; (4) the location of the disclaimer in the contract; (5) the appearance of the term “merchantability” with respect to color, style, size, and type of print in the disclaimer clause; and (6) the status of the parties contesting the validity of the disclaimer, namely whether they be consumers or commercially sophisticated entities. While these factors lend aid to the determination of what constitutes “conspicuous” language, the court believes that no single factor is dispositive nor are these enumerated factors exhaustive of all the criteria that can be used in examining a disclaimer. The disputed disclaimer provides in pertinent part: This constitutes Brooks’ only warranty in connection with this sale and is in lieu of all other warranties, expressed or implied, written or oral. THERE ARE NO IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE THAT APPLY TO THIS SALE. No employee, agent, dealer or other person is authorized to give any warranties on behalf of Brooks, nor to assume for Brooks any other liability in connection with any of its products without prior written approval by an officer of Brooks. The court concludes that this disclaimer meets the requirements' of subsection 36-2-316(2): First, the disclaiming language explicitly mentions merchantability and plainly states that there is no implied warranty with respect to the transaction; furthermore, the word “merchantability” is written in uppercase letters. See Winter Panel Corp. v. Reichhold Chemicals, Inc., 823 F.Supp. 963, 973 (D.Mass.1993) (holding that warranty limitation clause stating that warranty of merchantability was disclaimed was conspicuous when printed in bold, capital letters). Here, the clause is couched in terms of “merchantability” and clearly states that any such warranty is disclaimed. Because the clause expressly uses the word “merchantability,” the court concludes that the first criterion of the statute is satisfied. Second, the language and form of the disclaimer is “conspicuous.” Here, the disclaimer is printed in large-type, capital letters; thus, the style and size are distinct from the other print in the contract. See id. As in Sowards, the fact that the disclaimer is written on the reverse side of the contract does not render it invalid because the printing is distinct. See also Winter Panel Corp., 823 F.Supp. at 973 (holding that disclaimers are effective even though printed on the reverse side of the contract because a sentence on the front of the contract referred the purchaser to the reverse side). Moreover, as in Walter E. Heller, the instant contract is not lengthy but consists of only two pages. With respect to location, the disclaimer is on the back of page one and is prominently located at the top of the second column. Unlike South Carolina Electric & Gas and Cooley, the disclaiming language is not “buried” in many pages of contractual terms. Also, both Myrtle Beach and Emerson are corporations engaged in a commercial transaction, as were the parties in Investors, American, and AMF. Both parties are sophisticated entities familiar with commercial negotiations. Holding that such parties would be unawares of such exclusions does indeed “strain credulity.” Accordingly, this court holds that the disclaimer is “conspicuous” pursuant to subsection 36-1-201(10). Hence, the second criteria of subsection 36-2-316(2) has been met. Third, the disclaimer clause satisfies the requisite specificity. The language simply states that the express warranty is the sole warranty and that any other purported warranties are expressly disclaimed. The language elaborates on this exclusion by stating that there are no warranties of merchantability or fitness for a particular purpose. Finally, the clause concludes by providing that Myrtle Beach cannot rely on warranties based on representations by Brooks or others, nor will Brooks assume any further liability without written modification and approval. There is nothing vague about this disclaimer clause, and therefore the court holds that the specificity requirement of subsection 36-2-316(2) has also been met. Having concluded that the disclaimer mentions merchantability, is conspicuous and specific, the court must now determine whether the disclaimer is ambiguous. In Valtrol, Inc., the Fourth Circuit upheld disclaimer provisions in a contract negotiated between two corporate entities, noting that the Uniform Commercial Code expressly provides for such limitations of liability. Valtrol, Inc., 884 F.2d at 154. Whether an ambiguity exists regarding a disclaimer is a matter of law reserved for the court. Utah Power & Light Co. v. Babcock & Wilcox Co., 795 F.Supp. 1074, 1077 (D.Utah 1992). In Utah Power & Light, the parties disputed whether a disclaimer of implied warranties was ambiguous. Id. The court concluded that the disclaimer was not ambiguous and therefore granted the defendant’s motion for summary judgment as to a breach of implied warranties. Id. The court premised its conclusion on the language of the contract, which stated in pertinent part: THE COMPANY AND PURCHASER AGREE THAT IN CONSIDERATION OF THE ABOVE EXPRESS PERFORMANCE GUARANTEES THAT ALL OTHER PERFORMANCE ... EITHER EXPRESS OR IMPLIED ... INCLUDING WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE ARE EXCLUDED FROM THIS CONTRACT. Id. at 1076. The court held, as a matter of law, that this language was “not ambiguous.” Id. at 1077; see also McDermott, Inc. v. Iron, 979 F.2d 1068, 1076 (5th Cir.1992) (noting that “broadly worded clauses may be sufficient where sophisticated business entities are involved”), cert. granted in part, — U.S. -, 113 S.Ct. 3033, 125 L.Ed.2d 721 (1993). Relying on Hartman v. Jensen’s, Inc., 277 S.C. 501, 289 S.E.2d 648 (1982), Myrtle Beach contends that the disclaimer is ambiguous because the paragraph containing the disclaimer is prefaced with the heading ‘WARRANTY,” implying a grant of warranty, rather than a disclaimer of warranty. Myrtle Beach’s attempts to bring this action within the ambit of Hartman fail because Hartman is inapposite to these facts. In Hartman, Plaintiff Hartman brought negligence and breach of implied warranty claims against Jensen’s, a corporate entity manufacturing and selling mobile homes. Id., 289 S.E.2d at 649. Jensen maintained that it explicitly disclaimed any implied warranty of merchantability in the sales contract. Id. The Supreme Court of South Carolina held, however, that the disclaimer was ineffective because it was written under the heading “TERMS OF WARRANTY.” Id. The court summarily concluded that this heading “suggested a grant of warranty rather than a disclaimer,” and thus “created an ambiguity ... likely to fail to alert the consumer that an exclusion of the warranty was intended.” Id. (emphasis added). Construing this ambiguity against the seller, the court refused to enforce the disclaimer. Id. Hartman is distinguishable from the instant case. First, in Hartman, the warranty provision of the contract, was, as far as the opinion reveals, limited only to a disclaimer of warranties. Conversely, in the contract between Myrtle Beach and Emerson, the warranty provision of the contract contained an express warranty as well as a disclaimer. The warranty provision heading therefore contained a “grant of warranty,” as well as a disclaimer. Second and paramount, the Hartman court specifically stated that the ambiguity would fail to apprise the consumer that the implied warranty was being disclaimed. Hartman is therefore limited to transactions involving a consumer. The scope of the opinion is not, as Myrtle Beach urges, all-encompassing and meant to embrace all commercial transactions. Here, no consumer was involved; rather, the context of this transaction is a commercial negotiation between two sophisticated corporate entities. Accordingly, Hartman does not govern the disposition of Myrtle Beach’s breach of implied warranty of merchantability claim. The court concludes that the present disclaimer is not ambiguous. Because the disclaimer meets the strictures imposed under the statute, this court must enforce it because it effectuates the intent of the parties. Myrtle Beach also urges the court to apply Standard Boiler & Plate Iron Co. v. Brock, 112 S.C. 323, 99 S.E. 769 (1919), and Gold Kist, Inc. v. Citizens & Southern National Bank, 286 S.C. 272, 333 S.E.2d 67 (Ct.App. 1985). These cases are likewise inapposite. Standard Boiler did not, as here, involve an express disclaimer. Moreover, that case was adjudicated prior to the enactment of the Uniform Commercial Code as adopted in South Carolina. Thus, most of Standard Boiler’s precedential value has been undermined by subsequent legislation. Equally, Gold Kist is inapplicable because the purported disclaimers did not form part of the contract as here. Rather, in Gold Kist, the purported disclaimers were made subsequent to the formation of the contract, were conveyed on the bag in which the product was carried, and were never disclosed to the purchaser. Gold Kist, Inc., 333 S.E.2d at 70-71. Gold Kist is therefore factually very different from the present action. The Uniform Commercial Code clearly provides for disclaimers, and here the disclaimer clearly stated the rights and obligations of the parties. There is nothing vague of indefinite about the disclaimer. Therefore, the court concludes that the disclaimer is not ambiguous. 2. Limitation of Remedy Section 36-2-316 not only provides for disclaimers of implied warranties, but also provides for limitation of remedies for breach of warranty claims, see § 36-2-316(4). Subsection 36-2-316(4) shifts the parties to either of two damages provisions: either section 36-2-718, which generally provides for liquidated damages, or section 36-2-719, which provides for various limitations on a buyer’s remedies, such as repair or replacement of the defective good and exclusion of consequential damages. Here, subsection 36-2-719(l)(a) applies because the parties dispute whether Myrtle Beach’s sole remedy is repair or replacement of the air eliminator and whether Myrtle Beach is precluded from recovering consequential damages. Emerson asserts that the sole remedy available to Myrtle Beach is repair or replacement of the air eliminator and that consequential damages were expressly excluded by the contract. Myrtle Beach, however, advances a two-pronged argument regarding the limitation of remedy. First, Myrtle Beach contends that the disclaimer of implied warranty of merchantability is ineffective, and thus Myrtle Beach may claim damages for all injuries proximately caused by the air eliminator. The court has previously concluded that the disclaimer of the implied warranty of merchantability is valid and effective; hence, this contention fails. Second, Myrtle Beach argues that even if the disclaimer is valid, the remedy fails of its essential purpose and thus Myrtle Beach may resort to other remedies. In this action, inquiry into the remedy is crucial because the overwhelming amount of damages are for clean up costs and litigation expenses. Section 36-2-719 provides: (1) Subject to the provisions of subsections (2) and (3) of this section and of the preceding section (§ 36-2-318) on liquidation and limitations of damages, (a) the agreement may provide for remedies in addition to or in substitution for those provided in this chapter and may limit or alter the measure of damages recoverable under this chapter, as by limiting the buyer’s remedies to return of the goods and repayment of the price or to repair and replacement of nonconforming goods or parts; and (b) resort to a remedy as provided is optional unless the remedy is expressly agreed to be exclusive, in which case it is the sole remedy. (2) Where circumstances cause an exclusive or limited remedy to fail of its essential purpose, remedy may be had as provided in this act. (3) Consequential damages may be limited or excluded unless the limitation or exclusion is unconscionable. Limitation of consequential damages for injury to the person in the case of consumer goods is prima facie unconscionable but limitation of damages where the loss is commercial is not. S.C.Code Ann. § 36-2-719. Thus, the court must make three inquiries: (1) whether the contract limited the remedy to repair or replacement; (2) whether, if the remedy were so limited, it failed of its essential purpose; and (3) whether, if the limited remedy failed of its essential purpose, consequential damages may be recovered because their exclusion is unconscionable. These inquiries are addressed seriatim. a. Exclusivity of Remedy Before considering the enforceability of a limited remedy, the court must first “establish[] that the contract contains ‘an exclusive or limited remedy.’” Chatlos Sys., Inc. v. National Cash Register Corp., 635 F.2d 1081, 1085 (3d Cir.1980) (quoting § 2-719(1)(b)) (applying New Jersey law), cert. dismissed, 457 U.S. 1112, 102 S.Ct. 2918, 73 L.Ed.2d 1323 (1982). The Uniform Commercial Code requires that the exclusivity of a limited remedy be made explicit, see § 36 — 2—719(l)(b), and failure to do so will result in the limited remedy’s being construed as an optional additional remedy and will not preclude the availability of other remedies under the Code, see § 36-2-719(l)(b). Here, the contract between the parties, with respect to remedy, provides: Limitation of Remedy: Brooks will repair or replace at Brooks’ option, F.O.B. factory, any Brooks parts defective in workmanship or materials if such part is returned, freight prepaid, within one year from date of shipment to the nearest factory authorized service station or to the factory. It is agreed that such replacement or repair is the exclusive remedy available from Brooks should any of Brooksf’s] products prove defective. Brooks is not liable for damages of any sort, including incidental and consequential damages, (emphasis added). The court begins with the premise that “[s]uch agreed upon limits on remedy are generally valid.” McDermott, Inc., 979 F.2d at 1072. Indeed, the Fourth Circuit has enforced the limited remedies provisions of section 36-2-719. See Valtrol, Inc., 884 F.2d at 154 (enforcing the limited remedy because “the parties bargained for an exclusive repair or replacement warranty”). The case law reveals that exclusivity clauses less explicit than the one at bar have been sustained. For example, in Wyatt Industries v. Publicker Industries, 420 F.2d 454 (5th Cir.1969), the contract between the parties provided: Guarantee: Fabricator warrants the complete work against defective material and workmanship, exclusive of corrosion or erosion, for the period of one year from completion thereof. Its liability under this warranty shall be limited to the replacement within the aforesaid time of any defective work or material f. o. b. Fabricator’s shop, and Fabricator shall be liable for no other damages or losses. Id. at 456. The buyer sued, claiming breach of warranties and various consequential damages. The court, however, concluded that the disclaimer was sufficiently exclusive to limit the buyer to the stipulated remedy of replacement. Id. at 457. The Fifth Circuit, therefore, upheld the clause as containing an exclusive remedy even though neither the terms “exclusive,” “sole,” or “only,” nor any other limiting language, were expressed in the contract. Other courts have similarly upheld repair and replacement remedies as being exclusive, see, e.g., McDermott, 979 F.2d at 1073; Riegel Power Corp. v. Voith Hydro, 888 F.2d 1043, 1045-46 (4th Cir.1989), even though in some instances “an argument might be made that this [exclusivity] is not clearly expressed,” Chatlos Sys., 635 F.2d at 1081. Limitation clauses providing that the remedy of repair or replacement shall be exclusive are likewise sustained, see, e.g., Smith v. Navistar International Transportation Corp., 957 F.2d 1439, 1441-45 (7th Cir. 1992), Kaplan v. RCA Corp., 783 F.2d 463, 464-67 (4th Cir.1986), particularly where, as here, both parties to the contract are commercially sophisticated entities, see, e.g., McDermott, Inc., 979 F.2d at 1072-73; Chatios Sys., 635 F.2d at 1087. Commentators have noted that “the more explicit the limitation-of-remedy clause is, the more likely it will be enforced.” James J. White & Robert S. Summers, Uniform Commercial Code § 12-9, at 522 (3d ed. 1988). Here, because the contract expressly and clearly states that the remedy of repair or replacement shall be exclusive, the court concludes that the parties did agree to the exclusive, limited remedy of repair or replacement. Accordingly, Myrtle Beach may not seek other contractual remedies unless the limited remedy of repair or replacement fails of its essential purpose and the exclusion of consequential damages would be unconscionable. b. Failure of Essential Purpose Having concluded that the limited remedy is the exclusive remedy pursuant to subsection 36 — 2—719(l)(b), the court must now determine whether the limited remedy failed of its essential purpose pursuant to subsection 36-2-719(2). This court begins, as it must, by examining the statutory language. See K-Mart Corp. v. Cartier, Inc., 486 U.S. 281, 291-92, 108 S.Ct. 1811, 1817-18, 100 L.Ed.2d 313 (1988). Subsection 36-2-719(2) provides that “an exclusive or limited remedy [must] fail of its essential purpose” before additional remedies may be sought (emphasis added). Similarly, Official Comment 1 notes that this subsection applies to “an apparently fair and reasonable clause” that “because of circumstances fails in its purpose or operates to deprive either party of the substantial value of the bargain” (emphasis added). The statute and the comment, therefore, use the possessive pronoun “its” to refer to the limited remedy’s failing of its essential purpose. Thus, the court must determine whether the limited remedy as provided for by the parties fails of its purpose, rather than whether the limited remedy constituted appropriate relief or, with hindsight, objectively served the purpose of contract law. See James J. White & Robert S. Summers, Uniform Commercial Code § 12-10, at 523 (3d ed. 1988) (“[Subsection] 2-719(2) should be triggered when the remedy fails of its essential purpose, not of the essential purpose of the Code or of contract law or of justice or of equity.”). The primary objective of the limited remedy is to provide the seller an opportunity to tender conforming goods and thereby limit his exposure to risk for other damages, while simultaneously providing the purchaser with the benefit of his bargain — i.e.—conforming goods. See Chatios Sys., 635 F.2d at 1085. Thus, the repair or replacement remedy seeks to perform the contract as intended by the parties. For example, in Waters v. Massey-Ferguson, Inc., 775 F.2d 587 (4th Cir.1985), the court permitted recovery of consequential damages to a farmer, even though there was an exclusion of such damages. The court held that recovery was permissible under the narrow facts of the case because the parties premised the warranty provisions on certain repair, but repair efforts never proved successful. Id. at 591-92. Once repair became impossible, the court held that the limitation of consequential damages no longer applied. Id. Against this purpose, this court examines the success or failure of the limited remedy of repair or replacement. The limited remedy of repair or replacement fails of its essential purpose if the seller will not or cannot repair or replace the defective product with a conforming product or there is unreasonable delay in repair or replacement. See McDermott, Inc., 979 F.2d at 1073 (“Typically, a limited repair/replacement remedy fails of its essential purpose where (1) the seller is unsuccessful in repairing or replacing the defective part, regardless of good or bad faith; or (2) there is unreasonable delay in repairing or replacing defective components.”) (internal quotation marks, alterations, and citation omitted); Milgard Tempering, Inc. v. Selas Corp. of America, 902 F.2d 703, 707-08 (9th Cir.1990) (“A contractual provision limiting the remedy to repair or replacement of defective parts fails of its essential purpose ... if the breaching manufacturer or seller is unable to make the repairs within a reasonable time period.”); Riegel Power Corp., 888 F.2d at 1046 (“Generally, in the commercial cases, the ‘essential purpose’ exclusion arises only where the seller has refused to make repairs as he was required or where he cannot repair the product.”); Delhomme Indus, v. Houston Beechcraft, 669 F.2d 1049, 1063 (5th Cir.1982) (“The test in determining whether a limited warranty failed of its essential purpose is whether the buyer is given, within a reasonable time, goods that conform to the contract.”); Chatlos Sys., 635 F.2d at 1085 (“When presented with the question whether an exclusive repair remedy fails of its essential purpose, courts generally have concluded that so long as the buyer has use of substantially defect-free goods, the limited remedy should be given effect. But when the seller is either unwilling or unable to conform the goods to the contract, the remedy does not suffice.”). The inquiry focuses on whether the circumstances “make it exceedingly impractical to carry out the essence of an agreed-upon remedy,” Lewis Refrigeration Co. v. Sawyer Fruit, Vegetable & Cold Storage Co., 709 F.2d 427, 431 (6th Cir.1983), and “[t]he essential purpose of the limited warranty can only be gleaned from the transaction,” Coastal Modular Corp. v. Laminators, Inc., 635 F.2d 1102, 1007 (4th Cir.1980). The Uniform Commercial Code has not attempted to set parameters for defining a failure of essential purpose. The Fourth Circuit has noted that these parameters were not defined in order to preserve freedom of contract and allocation of duties and liabilities as contemplated by the Code. See Riegel Power Corp., 888 F.2d at 1045. The Riegel Power Corp. court further noted that there are “relatively few situations where a remedy [such as the repair or replace provision] can fail of its essential purpose.” Id. (alteration in original) (internal quotation marks omitted). Indeed, the decisional law reveals, particularly with respect to commercially sophisticated entities, that the limited remedy of repair or replacement is generally held to have performed its essential purpose if the seller timely cures the defects. See, e.g., McDermott, Inc., 979 F.2d at 1073 (no failure of essential purpose where seller replaced the product and both parties were sophisticated entities); Riegel Power Corp., 888 F.2d at 1046 (limited remedy did not fail of its essential purpose in commercially sophisticated transaction where seller made necessary repairs); Marr Enters., Inc. v. Lewis Refrigeration Co., 556 F.2d 951, 955-56 (9th Cir.1977) (limited remedy of repair or replacement did not fail of its essential purpose where seller promised repair or replacement or refund of purchase price). While the test for determining whether the repair or replacement remedy has failed of its essential purpose is relatively uniform, there is a dearth of law on the test’s application. The Fourth Circuit, applying Delaware law, utilized the following factors to determine whether a limited remedy failed of its essential purpose: (1) “the facts and circumstances surrounding the contract;” (2) “the nature of the basic obligations of the party;” (3) “the nature of the goods involved;” (4) “the uniqueness or experimental nature of the items;” ' (5) “the general availability of the items;” and (6) “the good faith and reasonableness of the provision.” Riegel Power Corp., 888 F.2d at 1045 (internal quotation marks omitted) (quoting J.A. Jones Const. Co. v. Dover, 372 A.2d 540, 549 (Del.Super.Ct.), appeal dismissed, 377 A.2d 1 (Del.1977)). The Riegel Power Corp. court further stated that “[o]ne of the most relevant” of the enunciated factors was inquiry into the type of product sold. Id. This inquiry bears not only on the product, but also on the context of the transaction — i.e.— whether the sale was a commercial or consumer transaction. Id. This court will therefore determine whether the repair or replacement remedy failed of its essential purpose by applying the Riegel Power Corp. factors. Applying these factors, this court concludes that the limited remedy of repair or replacement did not fail of its essential purpose: First, this is a commercial transaction involving two sophisticated corporate entities; no consumers are involved. Moreover, there is little or no disparity in the bargaining power of the parties. Unlike Waters, this is not a case where recovery of consequential damages is proper because there is no predicate for unsuccessful attempts at repair. The “facts and circumstances surrounding” this transaction reveal that this contract was freely entered into by two corporations well-versed in commercial practices. Understanding this commercial context cannot be divorced from the concept of limited remedies. Second, the obligations of the parties were mutual; the promise of neither party was onerous in this transaction. The contract is relatively simple in that Myrtle Beach solicited an air eliminator, and Emerson accepted the offer to provide one. Because the parties entered into this contract on an equal footing, the court should enforce it according to its terms. Third and Fourth, the type of product involved is a critical factor affecting not only the context of the transaction — i.e.—consumer versus commercial, but also upon the degree of sophistication of the product itself. As noted, this a commercial transaction between two corporations. Therefore, the need to “protect” the buyer is correspondingly less than if the buyer were a consumer. Also, the air eliminator is not a casually-purchased, readily-available item; rather, Myrtle Beach sought an engineer to design the component, and based on Ancira’s specifications, Emerson constructed it. When such is the case, the repair or replacement remedy is particularly compelling: “[WJhere the goods are experimental items, of complicated design, or built especially for the buyer ... the repair or replacement clause may simply mean that the seller promises to use his best efforts to keep the goods in repair and in working condition____” Id. at 1046 (quoting 3 Hawk-land Uniform Commercial Code Series 447 (Callaghan 1984)); see also American Elec. Power Co., 418 F.Supp. at 458 (noting that the limited remedy of repair or replacement is particularly apt in cases of specialty machinery). The facts of this case therefore compel a finding that repair or replacement has not failed of its essential purpose. A finding that the repair or replacement remedy has not failed when a product is specially manufactured or experimental is easily understood: because of the unique or novel nature of the product, the parties do not know whether it will be a success. Holding a seller liable for a product based on specifications drawn by the purchaser improperly allocates the risk of loss here and is contrary to the contract. Because the air eliminator was just such a product, the repair or replacement remedy cannot be held to have failed of its essential purpose. Fifth, this air eliminator is not generally available. Indeed, Myrtle Beach had it designed by an engineer, who, in turn, requested that Emerson manufacture the air eliminator according to his specifications. These facts demonstrate that the air eliminator is not a common item. Sixth, the clause setting forth the limitation is common between commercial merchants. See McDermott, 979 F.2d at 1076 (noting that exclusionary clauses are “common in commercial markets”); Waters, 775 F.2d at 590 (noting that a disclaimer provision similar to the one in this case is often referred to as “the standard warranty”). Moreover, Emerson has made itself ready to repair or replace the air eliminator. Here, the risk was allocated to Myrtle Beach by the express terms of the contract that the parties executed. Had Myrtle Beach not desired to bear this risk, it had ample opportunity to shift the risk to Emerson or to disavow the contract, but it did neither; so it cannot now complain. In light of the above, this court holds that the limited remedy of repair or replacement does not fail of its essential purpose. c. Exclusion of Consequential Damages Concluding that the limited remedy did not fail of its essential purpose pursuant to subsection 36-2-719(2), merely narrows, but does not end, the inquiry. The issue now becomes whether the exclusion of consequential damages, as here, would be unconscionable; and thus the court must separately examine subsection 36-2-719(3), which provides: (3) Consequential damages may be limited or excluded unless the limitation or exclusion is unconscionable. Limitation of consequential damages for injury to the person in the case of consumer goods is prima facie unconscionable but limitation of damages where the loss is commercial is not. S.C.Code Ann. § 36-2-719(3). Determining the propriety of excluding consequential damages is a separate and distinct inquiry from determining whether a limited remedy may be upheld: The limited remedy of repair and a consequential damages exclusion are two discrete [limitations]. The Code, moreover, tests each by a different standard. The former survives unless it fails of its essential purpose, while the latter is valid unless it is unconscionable. We therefore see no reason to hold ... that the failure of the limited remedy ... without more, invalidates a wholly distinct term in the agreement excluding consequential damages. Chatlos Sys., 635 F.2d at 1086 (footnote omitted). See also Lewis Refrigeration Co., 709 F.2d at 435 (“[T]he distinctly different substantive content of subsection (2) and (3) must be considered. Subsection (2) turns on the failure of essential purpose; subsection (3) turns on a judicial determination of unconscionability.”); AES Technology Sys. v. Coherent Radiation, 583 F.2d 933, 941 (7th Cir.1978) (“[W]e reject the contention that failure of the essential purpose of the limited remedy automatically means that a damage award will include consequential damages.”). There is, however, authority for holding that once a limited remedy fails of its essential purpose, then the exclusion of consequential damages likewise fails. See, e.g., R.W. Murray Co. v. Shatterproof Glass Corp., 758 F.2d 266, 272 (8th Cir.1985). The Fourth Circuit has not directly taken a stance on this position, but it has observed that “recent cases indicated that the two provisions are independent and are to be applied as such.” Riegel Power Corp., 888 F.2d at 1047 (dicta); Kaplan v. RCA Corp., 783 F.2d 463, 467 (4th Cir.1986) (“[A] finding that the repair and replacement warranty had failed would not void [defendant’s] exclusion of consequential damages provision as well[,] [although some courts have adopted that position.”) (applying New Jersey law) (citations omitted). The better view, and that previously applied by the Fourth Circuit, is that the exclusion of consequential damages is a separate inquiry from determining whether a limited remedy failed of its essential purpose. The Uniform Commercial Code provides for each of these limitations in separate subsections by noting that each is a separate form of limitation. More revealing still, however, is that these inquiries are resolved by different standards: the limited remedy of repair and replacement is determined by whether it failed of its essential purpose, while the exclusion of consequential damages is measured by whether the exclusion is unconscionable. Thus, this court concludes that it must examine separately the contract’s exclusion of consequential damages. Parenthetically, the court notes that even if a limited remedy does fail of its essential purpose, consequential damages may still be excluded. See, e.g., Kaplan, 783 F.2d at 467; S.M. Wilson & Co. v. Smith Int'l, Inc., 587 F.2d 1363, 1374-75 (9th Cir.1978); Dowty Communications, Inc. v. Novatel Computer Sys., 817 F.Supp. 581, 588-89 (D.Md.1992) (dicta). While these are separate inquiries, however, the limited remedy’s failure “is not completely irrelevant to the issue of the conscionability of