In this pack of BUSN 420 Week 5 DQ1 Battle of the Forms you will find:
Nellie Nimble, purchasing manager for Fast Color Paint Company, mailed a purchase order to AB Can Corporation for 100,000 cans of high-gloss white paint at $15 per gallon wholesale. The order form mailed by Nellie contained 17 printed conditions on its reverse side. The third condition stated: “Buyer may reject any defective goods within 30 days of delivery.”
The order form also stated that payment would be made as follows: 50% upon receipt of goods, and 50% within 30 days of receipt of goods. AB Can (the Seller) sent a signed letter confirming the order, but the letter stated: “Any objection to goods shipped must be in writing within 5 days of receipt of goods.” AB Can’s letter specified the same payment schedule as Fast Color’s purchase order, but stated, in addition, “Interest at the rate of 12% per year will be charged on late payments.” Fast Color’s purchase order said nothing about interest on late payments.
AB Can delivered the cans (100,000) and Fast Paint sought to object to 10,000 of the cans as defective on the 7th day after receipt of the cans. Fast Cans paid 50% of the purchase price for the entire order upon delivery, but paid the balance (minus the 10,000 cans it rejected) 40 days after delivery. Did Fast Paint have the right to reject 10,000 cans, 7 days after delivery? Does Fast Paint owe interest on the portion of its payment that was not paid within 30 days of receipt of the paint order? Explain your rationale, and also state whether you believe the outcome is fair.
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