J.L. Clark Manufacturing Co. v. Gold Bond Pharmaceutical Corp.

J.L. Clark Manufacturing Co. (Clark) (plaintiff) manufactured and sold metal containers or cans to Gold Bond Pharmaceutical Corp. (Gold Bond) (defendant). Gold Bond used the containers to package its powder product, which was sold to consumers. The parties’ contract provided the specifications for the metal cans, including their covers, color, and assembly requirements. In November 1984, Gold Bond ordered 250,000 units for about $172,500. Gold Bond received the units and began using them in packaging and distribution of its powder product. In February 1985, Clark issued an invoice for the goods. Gold Bond refused to remit payment, however, claiming that the containers were defective. Gold Bond sent a letter to Clark in April 1985, identifying certain problems with the containers, such as jagged edges, leakages, or mismatched colors. In May 1985, Clark requested that Gold Bond immediately return the containers or pay the outstanding invoices. Gold Bond refused to remit payment and continued using the containers until at least February 1986, at which point Gold Bond had obtained substitute packaging. Gold Bond claimed that it had no feasible alternative and had to use the allegedly defective containers to remain in business. Clark sued Gold Bond for payment under the Uniform Commercial Code (UCC) and moved for partial summary judgment as to the contract price of the goods. Gold Bond countered that it rejected the goods due to Clark’s breach of warranties.