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45. If the retailer sues the distributor for breach of contract, will it be likely to prevail?
For the next two years, the retailer forwarded orders to the distributor, and the distributor always filled the orders. In the third year, the distributor accused the retailer of overcharging customers to install the distributor's windows. The retailer responded that the distributor had no control over the retailer's installation prices. When the distributor received the retailer's next order for windows, it refused to fill the order.
A national distributor of windows selected a retailer to sell its windows in a specified geographic area. The parties negotiated a written distribution agreement, which stated that any order for windows placed by the retailer would be binding on the distributor «only when expressly accepted by the distributor.»
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Although the parties' course of dealing is sometimes used to interpret terms of a contract, express terms are given greater weight than the course of dealing.
A is correct. The express provision that the distributor would be bound by an order «only when expressly accepted by the distributor» was a condition, meaning until that event happened, the distributor was under no obligation to perform. Absent any other circumstances excusing this condition, the distributor was not required to fill the order. Even though the retailer and the distributor performed for two years without satisfying this condition, that practice does not negate or prevail over the express term of the original contract. The retailer will fail to show that the distributor breached because it was acting according to the original terms.
B is incorrect. This answer reaches the correct answer with the wrong reasoning. The retailer will not prevail, but not because of its practice of overcharging customers. The retailer's pricing practices were not stated as a condition in the original contract. Even if the retailer was overcharging customers, that is irrelevant here. It is the absence of the distributor's acceptance that discharged the duty to perform.
C is incorrect. This answer choice contains a true statement; the distributor's claim regarding the retailer's overcharging is independent of the distributor's obligation to fill the order. However, this is not related to the analysis of this question. The controlling issue is the absence of the fulfilled condition (accepting the order) that discharges the distributor's performance.
D is incorrect. The distributor's acceptance of the order as a condition of the duty to fulfill it was an express term of the original contract. Although the parties did not abide by this term for two years and still performed, the course of dealing will not control over an express condition that was agreed-upon by the parties.