NORTHROP CORPORATION, Plaintiff-Appellee/Cross-Appellant, v. LITRONIC INDUSTRIES, Defendant-Appellant/Cross-Appellee., 29 F.3d 1173

Summary

Appellee requested appellant to submit an offer to sell its goods. In sum, the offer and acceptance contained materially different terms. Appellant's offer contained a 90-day warranty and appellee's acceptance contained an unlimited warranty. Appellee rejected appellant's goods after six months as defective and instituted suit for reimbursement. The lower court awarded appellee the money it paid for the received products but denied recovery for the products which appellee failed to return. Both parties appealed. Appellee claimed entitlement to the products as security for its breach of contract claim under U.C.C. § 2-711(3). The reviewing court disagreed and affirmed the lower court's judgment since, pursuant to U.C.C. §§ 9-207, 9-506, appellee could not demand payment for the goods for which it has failed to account. Furthermore, the court found that a valid contract existed since appellee failed to make the unlimited warranty a condition of its acceptance.