National Eastern Corp. v. Vegas Fastener MFG
United States District Court for the District of Connecticut
59 UCC Rep. Serv. 2d 330 (2006)
Facts
National Eastern Corp. (National) (plaintiff) needed to supply steel for a construction project that it was working on as a subcontractor. To facilitate this, National purchased steel from Vegas Fastener MFG (Vegas) (defendant). The contract called for Type 316 steel, which was a requirement for the construction project. Vegas issued two certificates to National confirming that the steel was of this type. Eventually, after the construction project was completed, it was discovered that the steel was not Type 316, but rather Type 304. The steel corroded, and the general contractor for the project had to replace it. After bearing the costs, the general contractor sued National seeking to recover the amount it was forced to spend replacing the steel. An arbitrator determined this amount to be $98,146. National then brought suit against Vegas for breach of contract and filed a motion for summary judgment. Vegas argued that the question of whether National notified it immediately upon discovery of the nonconformity was a question of fact, not of law. Vegas also argued that, under Uniform Commercial Code (UCC) § 2-608, National could only recover damages if it showed that the nonconformity substantially impaired the value of the goods, which, Vegas maintained, National did not show.
Rule of Law
Issue
Holding and Reasoning (Arterton, J.)
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