Legal Question in Business Law in California

Re: Am I required to pay if item is late and I refuse it?

1) A contract probably exists, particularly if you have done business with the vendor in the past using the PO system;

2) Probably not, but it may depend upon the answer to your 3rd question; and

3) If you have done business with this vendor in the past, using the same POs and Order Confirmations, and have accepted product even though it was late, and if the custom in your industry is the same (i.e., the use of POs and Order Confirmations), and the item was a special item produced specifically for you (i.e. it cannot reasonably be expeceted to be sold to another customer), then you may have to pay for the item, or at least the amount the vendor is out of pocket for preparing and shipping the item.

In a nutshell, this case will likely turn on who the judge believes during trial, and whether your interpretation of the Order Confirmation and PO is accepted by the court.

Re: Am I required to pay if item is late and I refuse it?

This is a challenging contract law question, one that could well be on a Bar exam.

First, since this seems to be a sale of goods, the provisions of the Uniform Commercial Code will apply, rather than common law (which would apply to a contract for services, intangibles, etc.). I assume the California version of the UCC would apply, and while this isn't necessarily so, the UCC versions enacted by various states generally differ very little.

Several provisions of the UCC may bear upon your transaction, determining among other things whether a contract was formed in the first place, what its terms are, whether you have a right to refuse a late delivery, and the proper measure of damages, if you are in breach.

To analyze your situation completely, it's necessary to know whether BOTH parties to the presumed contract are "merchants." In UCC parlance, a "merchant" is someone who deals in this kind of goods regularly, or who might be considered an expert in them, as opposed to a casual buyer or a "consumer." See Commercial Code section 2207.

Assuming both of you are merchants, I think you have a valid contract that requires delivery according to your purchase order, and that you have the right to reject a late tender of the goods and PROBABLY have no liability to the seller.

A full and proper analysis would have to await a review of the wording of the documents and determination of the merchant and goods issues.