Court Opinion

ID: 9790527
Source: CourtListenerOpinion
Date Created: 2023-08-31 01:54:23.493283+00
Date Added: 2024-06-11T07:37:30.003907
License: Public Domain

STOWERS, Justice, dissenting. I agree with the majority’s conclusion that the breach of contract in this case occurred on June 22, 1979, and concur in that portion of its opinion. I cannot agree with the majority’s conclusion that the contract in issue was not a contract for sale and therefore dissent from the portion of its opinion discussing the applicable statute of limitations. The trial court concluded that plaintiff Data General Corporation (Data General) and defendant Communications Diversified, Inc. (CDI) had entered into a contract for the sale of goods, computers, that was governed by the Uniform Commercial Code’s four-year statute of limitations. See NMSA 1978, § 55-2-725. The majority of this Court reject the trial court’s findings and reverse its order of summary judgment. In mischaracterizing this agreement as a contract to provide a discount schedule rather than a contract for the sale of goods, I believe the majority disregard the clear intent of the parties and miscontrue the letter and spirit of the Uniform Commercial Code. A “contract” is the “total legal obligation which results from the parties’ agreement,” NMSA 1978, § 55-1-201(11) (Cum. Supp.1986), and an “agreement” is the “bargain of the parties in fact as found in their language or by implication from other circumstances including course of dealing or usage of trade or course of performance,” NMSA 1978, § 55-1-201(3) (Cum. Supp.1986). In addition to the “System Unit OEM Discount Agreement” (Discount Agreement) form upon which the majority focus, the March 21, 1978 agreement between Data General and CDI encompassed an amendment to that form, a purchase order from CDI to Data General for certain computer equipment and software, and a price quotation from Data General to CDI. See Steiner v. Mobil Oil Corp., 20 Cal.3d 90, 141 Cal.Rptr. 157, 596 P.2d 751 (1977) (en banc) (“competitive allowance” or discount agreement found within package of form documents). Goods are “all things ... which are movable at the time of identification to the contract for sale____” NMSA 1978, § 55-2-105(1). Computers unquestionably constitute “goods.” As the majority opinion notes, the sale of goods consists in the passing of the title to the goods for a price. NMSA 1978, § 55-2-106(1). Under the Uniform Commercial Code, however, a “contract for sale” may be a “present sale of goods” or a “contract to sell goods at a future time.” Id. In a “present sale of goods,” title passes from the seller to the buyer for a price by the making of the contract; in a “contract to sell goods at a future time,” a contract is made obligating the parties to pass title for a price at a future time. Id. It is unnecessary to determine whether the agreement between Data General and CDI constituted a present sale of goods or a contract to sell goods at a future time, for the record amply supports the trial court’s finding that there was a “contract for sale” within the meaning of the Uniform Commercial Code. First, the trial court’s finding is supported by admissions made in the pleadings. Data General’s amended complaint alleged, and CDI’s answer admitted, that plaintiff and defendant had entered a written contract in which plaintiff “agreed to sell merchandise to [defendant at a discount specified in that contract.” Indeed, Data General first raised the argument that this was not a contract for the sale of goods on appeal following the adverse judgment below. Furthermore, the trial court’s finding is supported by the language of the parties’ written contract. The Discount Agreement provided that Data General (DGC) and the Original Equipment Manufacturer Communications Diversified, INc. [sic] (Buyer) agree that the following terms and conditions shall govern the sale, discounting and licensing of DGC Equipment and Software. ... Buyer must purchase upon the date of this Agreement and take delivery during the first 3 months of this Agreement at least 5% of the minimum number of System Units associated with the level specified____ It stated that “Buyer” would receive scheduled discounts provided that Buyer ordered within the ordering period a scheduled number of units; if Buyer failed to purchase and take delivery of the requisite number of units, Data General would recalculate the discount previously granted and invoice Buyer for the difference. The Discount Agreement at least twice referred to “equipment and software furnished under this ... Agreement” and included a warranty on Data General equipment. These segments of the record alone clearly demonstrate that the parties incurred legal obligations as a result of their bargain to pass title to goods for a price at a future time. The trial court’s finding that the parties entered into a “contract for sale” under the Uniform Commercial Code therefore should be affirmed. Because an action for breach of any “contract for sale” must be commenced within four years after the cause of action accrued, NMSA 1978, § 55-2-725, the trial court’s order of summary judgment in favor of defendant CDI was proper and should be affirmed. The Official Comment to Section 55-2-725 states that the purpose of the section is to introduce a uniform statute of limitations for sales contracts, one that is most appropriate to modern business practice. The majority opinion too narrowly interprets the meaning of “contract for sale” under the Uniform Commercial Code by concentrating on portions of the language of the Discount Agreement that merely reflect the parties’ agreement regarding the price term of their contract for the future (and perhaps present) sale of computer equipment. See NMSA 1978, §§ 55-2-201, -202, -204. The majority’s severing of the discount schedule from the contract for sale severely undercuts the purpose of promoting uniform application of modern business practices that underlies Section 55-2-725 and the Uniform Commercial Code generally. For the foregoing reasons, I dissent from the portion of the majority’s opinion discussing the statute of limitations.