BUYERS CAN INSIST THAT LUMBER, PURCHASED ON CREDIT, BE DELIVERED.
A retailer says: “Lumber was sold to us by a special written contract on a six months’ credit, the lumber to be ordered out as fast as we saw fit. We have taken a little more than half and only about two of the six months have expired. We order another small shipment to be made. The seller replies that he will send this car, but that he can make no more deliveries unless we are ready to discount part, at least, of our bill. He says that he has already extended credit to us as far as he feels justified in doing. He seems to pay no attention to the contract, under which we were entitled to order out all of the lumber at once, or in such shipments as suited us, and were to have a credit upon the whole bill of six months. Will he be sustained in the stand he has taken? If we have a remedy please say what it is?”
Reply: When lumber has been sold and part of it delivered, it is too late for either the buyer or the seller to alter the contract without the consent of the other. If the sale is upon credit, as in this case, the terms of credit are such as have been agreed upon in the beginning. Either the buyer or the seller may ask, of course, to have the terms changed before all of the deliveries have been made, but if the other does not agree to the change the contract must be performed as it was made. It would be as reasonable for the buyer to refuse to accept the remainder of the lumber unless the terms of credit were made more favorable to him, as for the seller to refuse to continue his deliveries as agreed unless his new proposal as to credits were accepted. If the seller, in the case our correspondents put, refuses to go on with the contract in its original form, the buyers will have the same remedy they would have had if no deliveries at all had been made. They may go into the open market, when the time for delivery arrives, buy lumber enough to finish out the contract, and then hold the seller for such amount as they are compelled to pay over and above that named in the contract. Or, if they do not choose to do that, they may establish the amount of the loss arising from the seller’s breach of contract in any way in which it can be shown to the satisfaction of a jury and collect the damages so established. Or the buyers may cancel the remainder of the contract if they prefer that course. There is only one exception to this rule. Any one who has bought goods on credit is bound by an implied agreement to keep his credit good, and if he fails to do so he cannot require the seller to deliver the goods. Accordingly, if a buyer, before all of the lumber is delivered, shows an inability to pay any just claim in the ordinary course of business, when it falls due, those who have sold him on credit may lawfully refuse to go on with the deliveries and the buyer will have no remedy.
Opinion No. 39.