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Northrop Corporation v. Litronic Industries

29 F.3d 1173 (7th Cir. 1994)

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Northrop Corporation v. Litronic Industries

United States Court of Appeals for the Seventh Circuit

29 F.3d 1173 (7th Cir. 1994)

Northrop Corporation v. Litronic Industries

Facts

Litronic Industries (Litronic) (defendant) sent a written offer to Northrop Corporation (Northrop) (plaintiff) to sell Northrop printed wire boards. The offer contained a 90-day warranty on the boards. Northrop informed Litronic by phone that it accepted the offer and would send Litronic a formal purchase order. Based on previous business with Northrop, Litronic was familiar with Northrop’s purchase order form, which provided for a warranty that contained no time limit. Northrop received the boards but did not complete its testing of the boards until six months later. Northrop returned the boards to Litronic, claiming they were defective. Litronic refused to accept the returned boards because its 90-day warranty had lapsed. Northrop claimed it had an unlimited warranty under the terms of its purchase order. Northrop brought a diversity suit against Litronic. The magistrate judge eliminated both Northrop and Litronic’s warranty terms and applied Uniform Commercial Code (UCC) § 2-309, which provides that nonconforming goods may be rejected within a reasonable time, and held that Northrop rejected the boards within a reasonable time because of the complexity of Northrop’s testing. Litronic appealed.

Rule of Law

Issue

Holding and Reasoning (Posner, C.J.)

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