Bentley is a manager at a high-end printing company called
Graphic Communications Inc. (GCI). GCI designs and produces posters and other
materials for advertising purposes for a variety of clients, including a local
symphony orchestra and Main Street University. After GCI received a large order
from the university that required a special press, Bentley was assigned to
locate a suitable press, negotiate the purchase terms, and arrange for delivery
no later than July 1. Bentley negotiated a price with Armstrong Press
Manufacturing for the Armstrong model 2000 printing press. The press was
sufficiently large as to require that it be delivered in three separate pieces
and then assembled on-site. One factor in choosing Armstrong as a vendor was
that GCI had used Armstrong before for purchases of smaller presses and had
been satisfied with its products and services. In those previous transactions,
GCI had used its own standard preprinted purchase order, and no disputes
developed.
Once the parties agreed on price, Bentley issued a
preprinted purchase order. The purchase order was one page long and had very
few terms. It contained only the price, description of the press, the date of
the purchase order, a provision that agreed that all three pieces of the press
would be delivered and operational by July 1, and Bentley’s signature. After
Armstrong received the purchase order, Armstrong’s manager handwrote this
phrase in the delivery section of the purchase order: “Acknowledged as a
destination contract. To be delivered and assembled in three installments to
GCI over the month of May.” Armstrong’s manager then signed the purchase order,
faxed the purchase order back to Bentley, and began to process the order.
Armstrong shipped the first part of the press using its own delivery service.
Before delivery, the truck was involved in an accident, and the first part of
the press was destroyed.
1. Is Armstrong’s addition of the delivery term binding on
GCI? Explain the UCC analysis governing the additional terms added by
Armstrong.
2. Does the fact that the parties had a history of past
dealings with each other impact your analysis in Question 1? Why or why not?
3. When does title to the goods pass in this contract?
Who has the risk of loss? How is your answer related to your
analysis of Question 1?
4. Is the purchase order sufficient to satisfy the statute
of frauds? Why or why not?
5. Assume that Armstrong ships the first two parts of the
press with no problem but anticipates a significant delay for the third part.
Knowing that GCI requires the press to be ready on July 1, Armstrong
substitutes a newer and more expensive version of the final piece of the press
by June 15. Has Armstrong breached the contract? When it is delivered, must GCI
accept the final piece because it is newer and more expensive than the goods it
had bargained for?
6. In Question 5, if GCI accepts the replaced good but one
week later discovers that the new press component is incompatible with the
first two components, may GCI still reject the goods despite the fact that it
has accepted them and one week’s time has passed? What UCC provision covers
this situation?
7. If GCI rejects the final shipment of goods, what are
GCI’s options in terms of a remedy?