Distributors argues that the contract was breached by Stores when it did not accept the delivery of the goods. Engel's affidavit, attached to Distributors' motion, states that Distributors attempted to deliver the goods, but the delivery was rejected by Stores for lack of warehouse space. Under the Uniform Commercial Code, a contract obligates the seller to deliver to the buyer the goods called for under the contract, and it obligates the buyer to accept delivery and pay for such goods. Although the affidavit does not state when and where delivery was attempted, it does specifically allege that Stores did not accept the goods when Distributors sought to deliver them. If proved at trial, this might constitute a complete defense to the breach of contract claim.
Distributors also alleges it has a defense to the fraud claim.
In its motion to set aside the default, Distributors asserts it had the goods at the time of contracting, and the parties discussed Distributors' difficult financial situation. If both of these statements are true, Stores will be unable to show that Distributors knowingly or recklessly made a false representation or that Stores' alleged reliance was reasonable. These two assertions, made in Distributors' affidavit, serve as a complete defense to the fraud claim. Distributors alleges that its failure to answer was not culpable. Distributors was under the impression that ongoing negotiations and the possibility of settlement obviated the need for prompt response.