Northrop Corp. v. Litronic Indus.

29 F.3d 1173 (7th Cir. 1994)

 

RULE:

The Uniform Commercial Code (U.C.C.) does not say what the terms of the contract are if the offer and acceptance contain different terms, as distinct from cases in which the acceptance merely contains additional terms to those in the offer. The majority view is that the discrepant terms fall out and are replaced by a suitable U.C.C. gap-filler. 

FACTS:

A giant defense firm sent several manufacturers of electronic components a request to submit offers to sell the firm a customized printed wire board designated by the firm as a "1714 Board."  The offer and acceptance between the firm and one manufacturer contained materially different terms. The manufacturer's offer contained a 90-day warranty and the firm's acceptance contained an unlimited warranty. The firm rejected the manufacturer's goods after six months as defective and instituted suit for reimbursement and monetary damages against the manufacturer. The lower court awarded the firm the money it paid for the received products but denied recovery for the products which firm failed to return. Both parties appealed to the United States Court of Appeals. The firm claimed entitlement to the products as security for its breach of contract claim.

ISSUE:

Was there a valid contract?

ANSWER:

Yes

CONCLUSION:

The court found that a valid contract existed since the firm failed to make the unlimited warranty a condition of its acceptance. The reviewing court affirmed the lower court's judgment and held that the firm  could not demand payment for the goods for which it has failed to account. 

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