Really Terrific Installations (“RTI”)

09 Mar

One of the key discussions this week, and potentially the most confusing, is what is often called the
“battle of the forms.” Our legal focus will be on UCC 2-207 (
207.html) entitled “Additional Terms in Acceptance or Confirmation.” Before you do anything else, READ
UCC 2-207. Keep in mind, too, that this section is focused on dealings between “merchants.” From there,
I’m going to challenge your contract analysis skills.
Scenario References:
a. RFQ Form (attached)
b. “RTI Purchase Order Terms and Conditions” (attached)
c. “ESS Terms and Conditions of Sale” (
The Typical Scenario: Really Terrific Installations (“RTI”) issues a a Request for Quotation (see attached
example) for $500,000 of Grade 304L stainless steel. The RFQ form (in fine print on the back of the form)
includes RTI’s standard terms and conditions. Ellwood Speciality Steel Company (“ESS”) issues its
quotation that include the attached “Terms and Conditions of Sale.” Negotiations ensue on price,
quantity, delivery, inspection and testing, and delivery schedule. RTI issues its purchase order for the
order which include RTI’s own “Purchase Order Terms and Conditions.” In response, ESS issues its PO
acknowledgment form which, not suprisingly, again includes ESS’ “Terms and Conditions of Sale.” The
contract (if there is one) calls for 5 deliveries over a 6 month period.
Disputes Break Out: RTI’s inspection of the third delivery using “non-destructive testing” (NDT) reveals
that the steel delivered contains numerous impurities and microscopic cracks which make the steel unfit
for its intended use. RTI panics, and samples the prior deliveries (some of which is already in use) and
finds similar results. RTI informs ESS of these defects, and demands replacement of all deliveries made
to date along with the cost to RTI to rework items already produced with defective steel.
ESS does its own NDT and, much to RTI’s surprise, denies that there are any defects or that such defects,
even if present, would bar use of the steel in RTI’s intended use. Negotiations break down, the lawyers
are called, and YOU have been assigned to analyze the terms of the contract with ESS to see what if any
remedies RTI has here.

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Posted by on March 9, 2017 in Academic Writing



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