Northrop Corp. v. Litronic Industries

29 F.3d 1173 (7th Cir. 1994)


Northrop sent a request for quotation to submit offers to sell to Northrop a customized printed wire board known as Board 1714. The request stated that any purchase would be made by purchase order that would set forth the terms and conditions that would override any inconsistent terms in any offer made. Litronic offered to sell the four boards for $19,000 each to be delivered in six weeks. The offer contained a 90-day warranty stated to be in lieu of any other warranties, and provided that the terms of the offer would take precedence over any terms proposed by the buyer. Northrop’s buyer called Litronic’s man and accepted the offer up to $24,999 and that a formal purchase order for all four boards would follow. Litronic was familiar with Northrop’s PO form having previously done business with Northrop. Had Litronic referred to prior Northrop PO’s it would have found that Northrop had a warranty with no time limit. A turn on letter was sent by Northrop to Litronic, but it was also stated that a formal PO would follow. The purchase order required the seller to send a written acknowledgment to Northrop. Litronic never did so. Northrop did not complain. Litronic did not deliver the first three boards until more than a year late in July of 1988. Northrop tested the boards for conformity with specifications. It was not until 5-6 months after delivery that Northrop discovered that the boards were defective. Litronic refused to accept a return as its 90-day warranty had lapsed. The magistrate held that the discrepant terms fall out and are replaced by suitable UCC gap filling terms. Under 2-309, non-conforming goods may be rejected within a reasonable time. The magistrate held that six months was a reasonable time for Northrop to reject. The trial court found for Northrop and Litronic appealed concerning the breach of warranty.