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Contracts Keyed to Ayres
Dynamic Machine Works, Inc. v. Machine & Electrical Consultants, Inc
Facts
Plaintiff ordered a lathe from Defendant in January 2003. The lathe was to be manufactured in Taiwan and the contract provided that Plaintiff would make a down payment, a partial payment upon delivery, and final payment upon acceptance. The contract also stated that the lathe would be delivered in May 2003. Prior to June 2003, both parties agreed that the lathe was delayed due to the SARS epidemic in Taiwan and extended the delivery date to September 19, 2003 with the condition that Defendant would pay $500 a day for delays beyond that date. Defendant delivered the lathe on October 9, 2003 and spent November installing it. Plaintiff sent Defendant a letter on December 9, 2003 extending the date by which the lathe would be installed to December 19, 2003. On December 10, 2003, Plaintiff learned that the lathe would not meet its required specifications to Plaintiff informed Defendant that it was retracting its latest extension. Plaintiff revoked acceptance of the lathe, requested the return of its down payment, demanded payment of penalty fees by Defendant and requested removal of the lathe. Defendant had not materially relied upon the December 9, 2003 extension. Plaintiff filed a declaratory judgment action for breach of contract in state court that was removed to federal court. The district court certified the following question to the state’s highest court: “Under the … Uniform Commercial Code, does a buyer have a right to retract a written extension allowing more time for the seller to cure defects in a delivered product absent reliance on the extension by the seller?”
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