Harlow & Jones, Inc. v. Advance Steel Co., 424 F. Supp. 770 (E.D. Mich. 1976)

Case Name: Harlow & Jones, Inc. v. Advance Steel Co.
Plaintiff: Harlow & Jones, Inc.
Defendant: Advance Steel Co.
Citation: 424 F. Supp. 770 (E.D. Mich. 1976)

Issue: Under the UCC, did the defendant breach a contract when he refused the last of three deliveries because he believed it was being delivered late?

Key Facts: Defendant had several telephone conversations with William VanAs, a broker for the plaintiff. During these conversations, VanAs informed the defendant about the availability of 5000 metric tons of steel that could be shipped during September-October, 1974 and defendant informed VanAs that he was interested in purchasing 1000 tons of this shipment. VanAs recorded the terms of this transaction on a worksheet and relayed the information to the plaintiff. In July, 1974, the plaintiff mailed the defendant a sales form confirming the sale of 1000 metric tons which shipment from Europe during Sept-Oct, 1974. The plaintiff then ordered the 1000 tons of steel from Europe. The defendant did not sign or return the plaintiff’s sales form but prepared and mailed his own purchase order form (which contained the same quantities, shipping dates, and minor specification changes. This was never signed and returned by plaintiff. The steel came from Europe in three separate shipments. The first two shipments were received and paid by Advance. The last shipment arrived in late November which the defendant rejected because of “late delivery.”

Procedural History: None because the case is in the District Court (trial court) and is not on appeal.

Holding: The defendant did breach the contract by rejecting the last shipment. The terms of the oral agreement were to ship the steel by October and under UCC 2-504 the defendant could only reject the shipment if there was a “material delay.” Because steel takes an average of one month to ship from Europe; although the steel was shipped late, it did arrive by late November so there was no material delay.

Reasoning: The plaintiff and defendant were arguing that they were abiding by what they thought was a written contract. Plaintiff argued for his sales form and defendant for his purchase order form. The court decided that the sales form and purchase order form were merely confirmations of an order because the actual agreement took place through the several telephone conversations. According to the UCC, this means that the “contract” was an integration of the two forms and is made up of the terms that the two parties agree on.

Notes:

  • Do not need specific oral or written offer and acceptance if you have clear conduct that shows the parties entered into an arrangement (i.e. Advance was accepting shipments, even one that came after October 31st)
  • Also true under the Restatement even if you can’t point to the exact offer and acceptance by the parties. The difference is how the court would fill in “gaps.”

 

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