What Would ACME's Lawyer Do?
The ACME Products corporation opened in 1949 and grew quickly into a conglomerate that produces nearly every kind of product imaginable.
Observant consumers are familiar with the Acme rocket launcher, Acme bird seed, Acme glue and the Acme smoke bomb, just to name a few.
Acme sells to retailers and other businesses, but the buyer we are most familiar with is Acme’s most loyal customer – Mr. Wile E Coyote, who lives in the desert southwest and chases road runners.
With every sales deal Acme makes, they require a contract. (Because Acme is too savvy to let the UCC control).
For Acme, the key business terms in the standard sales contract are pretty fair:
• Payment Terms: the purchase price in US Dollars is due 30 days from invoice date
• Delivery Terms: Acme notifies the Buyer when the product is shipped. Title and risk of loss transfer upon shipment, which protects Acme if the goods are lost or damaged during shipment
• Warranty: Acme warrants that its products will conform to its specifications at the time of manufacture and disclaims all other warranties
• Limitation of Liability: Acme limits its liability to replacement of the products or a refund of the purchase price paid
But, consider Acme’s approach to these provisions when Wile E Coyote is the buyer.
We know what’s going to happen, right? Wile E is going to crash and burn – literally – when he uses these products. He seems to have extraordinary luck and survive all of his accidents, but still; Acme doesn’t want to count on that.
So, for the specific contract with Wile E Coyote:
• Payment Terms: Acme wants to be paid in cash, in advance of the shipment
• Delivery Terms: Acme doesn’t guarantee that it will meet any specific delivery dates, and reserves the right to refuse shipment if the customer has not paid
• Warranty: Sadly, Wile E Coyote knows how reliable Acme’s products are, that they will always launch or explode or whatever. But he keeps getting startled by that road runner. And when he gets startled, he doesn’t use Acme’s product quite the way they were intended, so they end up exploding too soon. When selling to Wyle E, Acme wants even more protection, so they will disclaim all warranties by using the words “Products are sold AS IS with no warranty of any kind”
• Limitation of liability: For our friend Wile E Coyote, because he is so accident prone, Acme might make the provision even more stringent than usual, by capping liability to a very small dollar amount and not offering to replace the product
Companies like Acme have lawyers to create contracts, because every deal has special considerations.
Wile E Coyotes are everywhere, and it’s the lawyer's job to anticipate them.
Please contact me with any questions about selling to a Wile E Coyote buyer.