American Contract Law for a Global Age, 2017a

eing a new roof. We are not prepared to hold that a contractor who tenders a
performance so deficient that it can be remedied only by completely redoing the work
for which the contract called has established, as a matter of law, that he has
substantially performed his contractual obligation.
Because of defendant’s deficient performance, plaintiff is now in a position
which requires that she pay for a new roof.
The judgment of the trial court is affirmed.
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Review Question 4. Both O.W. Grun Roofing and Jacob & Youngs purport to
apply the substantial performance doctrine. In the Texas roofing case, the contractor
lost, while the contractor in the New York pipe case prevailed. Are the two cases
consistent with one another or not? Explain.
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KCA ELECTRONICS, INC. v. LEGACY ELECTRONICS, INC.
Court of Appeal of California, Fourth Appellate District
2007 Cal. App. Unpub. LEXIS 6107 (Ct. App.)
[Legacy wanted to market a device for increasing computer memory that
required a thumbnail-sized component called a “ball grid array (BGA) canopy,” a unit
that uses solder balls on the bottom to make electric contacts with a circuit board.
Legacy sent four purchase orders to KCA, a manufacturer, over a nine-month period,
for approximately 59,000 BGA canopies. The purchase orders also provided that all
of KCA’s products must be warranted “to be free from defects and to perform to the
original manufacturer’s specifications for fit, form and function.” Seller KCA
responded with invoices that contained a clause that said “Buyer shall exercise its
right of inspection within 30 days of receipt . . . and all goods shall be deemed accepted
as to quality unless the Seller receives a written notice of rejection within such 30
day period.” Things went bad quickly. The first batch was returned because of sticky
tape residue on the canopies. They were cleaned and returned, but were again
rejected for being undersized. They were reworked and shipped back in installments.
The single biggest order, for 40,000 units, was returned because solder balls on the
canopies were smashed and there was exposed copper. KCA inspected them, decided
they were fine, and sent back to Legacy. This led to a dispute, and the parties agreed
that all units would be tested by Legacy. In testing, it turned out that 6 percent of
the units were defective. After discussions trying to settle the matter, Legacy rejected
the goods and refused to proceed. KCA sued.]
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440 CHAPTER VII: PERFORMANCE AND BREACH