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Uncertainty About the Delivery of a ‘Terms & Conditions’ Document Helps a Buyer in Its South Florida Commercial Contract Lawsuit

Some breach of contract cases turn on highly complex issues of the law or of the industry involved. Their resolutions can involve deep dives into the law and into an understanding of that industry. Others, while no less important, can come down to much more discreet issues. In the case of one recent South Florida breach of contract case, an unpaid seller lost its opportunity for summary judgment in its favor because it didn’t have unassailable proof that its buyer received a copy of the seller’s “terms and conditions” document. The absence of uncontroverted evidence of receipt of that single document made an enormous difference in the outcome of the motion for summary judgment. It is a reminder of the importance of paperwork, of documentation of delivery of paperwork, and of skilled South Florida commercial litigation counsel in any commercial contract dispute.

The seller in this case was a South Florida manufacturer of pyro-electric components. The buyer was the manufacturer of a patented device used for detecting refrigerant gas leaks. The seller provided the buyer with a quote for 10,000 detector components to be used in the buyer’s devices. As is not uncommon, the quote document contained language that stated that all “items are subject to our Standard Terms and Conditions, a copy of which is attached.” The seller’s terms and conditions stated that the buyer had the right to inspect the components upon delivery. They also stated that if the buyer did not inspect and give the seller written notice of “any alleged defect or nonconformity” within 30 days, then that would make the acceptance irrevocable.

The buyer sent out a purchase order and the seller shipped 6,000 detectors, along with an invoice for $87,780, to the buyer. The buyer didn’t pay, which led the seller to pursue its breach of contract claim. The seller also asked the court to award it summary judgment. It argued that it shipped the components and the buyer neither rejected the delivery within 30 days nor paid, which created an “open and shut” case of breach of contract, based upon the terms and conditions.

There was one major problem for the seller, though. The buyer asserted that it never received a copy of the seller’s terms and conditions. The buyer also asserted that 4,000 of the 6,000 detectors were defective and it attempted to return them, but the seller refused to accept them.

The appeals court concluded that this was a case that could not be resolved with an award of summary judgment. The seller gave the trial court an affidavit that said that it attached the terms and conditions to the quote. The buyer had its own affidavit and it stated that it definitely did not get a copy of the terms and conditions with the quote. This was, then, a clear-cut case of “disputed issue of material fact,” which meant that the case had to go to trial.

The seller made an alternate argument that, even outside the obligations laid out in the terms and conditions, the buyer did not reject the goods in a timely manner, so the seller was entitled to judgment in its favor. The appeals court explained that the process of determining whether or not a rejection of goods was timely or untimely under the rules of the Uniform Commercial Code “is a factual issue to be decided by a jury and cannot be resolved on summary judgment.”

When it comes to commercial contracts and commercial contract disputes, small details can make a huge difference in the outcome of your litigation. Be sure you have counsel who knows how to “sweat the (right) small stuff.” The experienced South Florida commercial litigation attorneys at Stok Kon + Braverman have been helping clients achieve positive results for many years.

Contact us online or by calling (954) 237-1777 to schedule your consultation and find out how this firm can help you.

More blog posts:

Contractual Limitations Period Stymies Swiss Trust’s Breach of Contract Lawsuit Against American Bank, Florida Business Lawyers Blog, May 7, 2018

Unresolved Factual Disputes Trigger Reversal of $776K Judgment in South Florida Contract Breach Case, Florida Business Lawyers Blog, Dec. 21, 2017