The Missing Clause and the Course of Dealing
Buyer and Seller signed a one-page purchase agreement for 5,000 widgets at $10 each, delivery "by June 1." The writing is silent on late-delivery remedies, inspection, and risk of loss. Over two prior years, the parties completed eight similar orders; in each, Seller shipped within three days of the deadline when asked, and Buyer accepted late shipments without objection while noting "we'll need these fast next time." This year Seller ships on June 20. Buyer refuses delivery, claiming the contract's silence means time was of the essence and late delivery is a material breach. Seller sues for the price, arguing the parties' course of dealing permitted modest lateness. Buyer's employee had orally told Seller's salesperson in May that "June 1 is firm this time."
1. How should a court treat the oral "firm this time" statement and the prior course of dealing?
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The contract is for goods, so UCC Article 2 governs. Under UCC 2-202, a final written agreement may not be contradicted by prior or contemporaneous oral agreements, but it may be explained or supplemented by course of dealing, course of performance, and usage of trade. The oral "firm this time" statement is problematic: if offered to add a term, it may be excluded as a prior consistent additional term where the writing is intended as complete; but it may be admissible to explain whether time was of the essence. The eight prior orders are admissible course of dealing under 2-202 and 1-303 to give meaning to "by June 1." A court would likely find the parties' course of dealing contemplated modest lateness, undercutting Buyer's claim that silence alone made time of the essence.
2. Did Seller materially breach, and what remedies are available?
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Under UCC 2-601 and 2-612, a buyer may reject goods only if the tender fails in a way that substantially impairs value; a 19-day delay after eight accepted late deliveries likely does not substantially impair value absent a showing of lost resale or seasonal market. The course of dealing suggests the delay was within the parties' understanding. If the delay is not a material breach, Buyer's rejection is wrongful and Seller may recover the price under 2-709 if the goods cannot be resold, or damages under 2-708. Buyer's remedy, if any, is cover damages under 2-712 or incidental/consequential damages under 2-715, but only if the breach was material. The court should weigh the oral statement as explanation, not as an added term.