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Dynamic Machine Works, Inc. v. Machine & Electrical Consultants, Inc.

Supreme Judicial Court of Massachusetts
831 N.E.2d 875 (2005)


Facts

Dynamic Machine Works, Inc. (Dynamic) (plaintiff) is a manufacturer of precision components. Machine & Electrical Consultants, Inc. (Machine) (defendant) is a distributor of machinery and equipment. In January 2003, Dynamic entered into a contract to purchase a lathe from Machine. The lathe was to be manufactured by a separate company based in Taiwan. In June 2003, an outbreak of “SARS” in Taiwan delayed production of the lathe. Machine and Dynamic entered into an oral agreement, confirmed in letters between the parties, to extend the deadline for the installation and commissioning of the lathe to September 19, 2003. Any further delay would result in a $500 penalty per day for Machine. Machine delivered the lathe to Dynamic on October 9, 2003. Throughout October and November, the lathe was tested and readjusted. On December 9, 2003, Dynamic’s president wrote a letter to Machine’s president stating that Dynamic would grant Machine an extension for the final deadline for the lathe to be fully and unconditionally commissioned. Dynamic stated that the final deadline would be December 19, 2003. Dynamic later concluded that the lathe would most likely not be ready by December 11th, Dynamic informed Machine that it intended to retract the deadline extension and not accept delivery of the lathe at all. Dynamic brought suit against Machine in the United States District Court for the District of Massachusetts. The district judge certified the following question to the Supreme Judicial Court of Massachusetts: “Under the Massachusetts version of the Uniform Commercial Code, does a buyer have a right to retract a written extension allowing more time for the seller to cure defects in a delivered product absent reliance on the extension by the seller?”

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Holding and Reasoning (Cordy, J.)

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