Reference no: EM133400879

Assignment:

Reliance Steel Products sent a purchase order for certain steel products to Kentucky Electric Steel referred to as KES. There had been several negotiations for the previous months. In the course of the negotiations there were several issues regarding change orders.

Reliance's purchase order contained a clause stating that Reliance would not be bound by any terms other than those in its purchase order unless it agreed in writing to a change of the terms. The reference to a change order was vague as there were several iterations of the purchase order done over the months.

KES responded with its standard order acknowledgment form and the form contained a limitation of liability clause that limited KES's liability for defective goods to replacing the goods or allowing the buyer a credit for them. Reliance is in Colorado and Kes is in Kentucky. There were problems with the order and KES refused to complete the purchase.

Reliance later filed a breach of contract suit against KES arguing that some of the goods received did not conform to the contract specifications. Reliance asked for a damage award based upon damage to its fabricating machinery and lost profits that they claimed resulted from KES's breach. KES obviously argues that such damages are not allowable for several reasons. Further, that this is not a breach of a covenant rather it is a breach of a condition.

Please discuss the various positions. Is the UCC applicable...please explain. First of all, please analyze whether or not there is a valid offer and acceptance. Second, please discuss the various contents of the offer, if any, and the contents of the acceptance, if any. Third, please look into the damages issue as is requested. Please discuss what would have been allowable and not allowable.