Major State University, whose highly profitable athletic programs are known as the Shorthorns, has developed a book about the long and occasionally storied history of its athletic program, entitled Horns of Excellence. It contracts with Acme Publishing Co. to produce the book. The contract specifies that Acme will produce 400,000 copies of the book, which MSU plans to sell to alumni and friends. The books will be delivered in four lots of 100,000 each. The detailed contract specifications provide that the book's cover, which features a picture of one of its semi-legendary coaches, will be produced in Shorthorn Orange, a kind of muddy brownish colorthat is the official trademarked color of the Shorthorns and is used for all uniforms, goods, and merchandise.

When the first 100,000 copies are delivered to MSU, the school is shocked to discover that the covers have been printed in Volunteer Orange, a much brighter color that is the trademarked color of a rival university. MSU rejects the first 100,000 volumes. Acme says that it can change the color for the next shipments. MSU, furious, cancels the contract anyway and refuses to pay anything for the books. Acme sues. Evidence shows that not more than five out 100 Shorthorn fans can actually tell the difference between the two colors. Was MSU's rejection proper? Does it owe anything to Acme if Acme sues for nonpayment?

Reference

FANOK v. CARVER BOAT CORP. United States District Court for the Eastern District of New York 576 F. Supp. 2d 404 (E.D.N.Y. 2008)

KCA ELECTRONICS, INC. v. LEGACY ELECTRONICS, INC. Court of Appeal of California, Fourth Appellate District 2007 Cal. App. Unpub. LEXIS 6107 (Ct. App.)

O. W. GRUN ROOFING & CONSTRUCTION CO. v. COPE Court of Civil Appeals of Texas, Fourth DistrictSan Antonio 529 S.W.2d 258 (Tex. Civ. App. 1975)

JACOB & YOUNGS, INC. v. KENT Court of Appeals of New York 230 N.Y. 239, 129 N.E. 889 (1921)

SMITH v. BRADY Court of Appeals of New York 17 N.Y. 173 (1858)

Perfect Tender.

Substantial Performance.

The UCC and Perfect Tender.