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Contracts Keyed to Fuller
United California Bank v. Eastern Mountain Sports, Inc.
Citation:
546 F. Supp. 945 (D. Mass. 1982)Facts
Snow Lion sold various garments to EMS including down-filled vests, parkas, and jackets, as well as synthetic-filled parkas. UCB entered into an accounts receivable financing agreement with Snow Lion in March 1977 and notified EMS of the assignment in June 1977. The down-filled garments delivered to EMS had poor lofting capacity, over-calendarized exteriors, and failed to meet FTC guidelines for products labeled as “down.” The synthetic Waban Parkas were delivered late and had defects. EMS and Snow Lion negotiated credits for the defective merchandise, but EMS maintained it should receive its expected profit margin. After Maine’s Attorney General investigated the down products, EMS conducted a nationwide recall. EMS withheld payment to Snow Lion/UCB on its account, claiming offsets for lost profits, recall expenses, and an unpaid advertising credit of $25,000 that Snow Lion had agreed to issue.
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