## Facts

- Sherwood Tool, Inc. (buyer/defendant) entered a written contract with D.P. Technology Corp. (seller/plaintiff) to purchase a computer system.
- The computer system included hardware and software (and, as alleged in the complaint, related services such as installation and training).
- The contract provided that the system would be delivered within ten to twelve weeks, with the delivery period ending April 18, 1989.
- D.P. Technology alleged the system was specifically designed for Sherwood and was not readily marketable to others.
- D.P. Technology delivered the software on April 12, 1989 (within the stated delivery period).
- D.P. Technology delivered the hardware on May 4, 1989 (16 days after the stated delivery period ended).
- On May 9, 1989, Sherwood returned the hardware and software and refused to pay for both.
- D.P. Technology sued in the United States District Court for the District of Connecticut based on diversity jurisdiction, alleging breach of contract arising from Sherwood’s refusal to accept and pay.
- Sherwood moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), arguing that the late hardware delivery entitled it to reject the goods and that the complaint therefore failed to state a claim.

## Issues

1. Whether, accepting the complaint’s allegations as true, D.P. Technology stated a plausible breach-of-contract claim under Connecticut’s U.C.C. where software was timely delivered but hardware was delivered 16 days late and the buyer returned everything and refused to pay.
2. Whether Sherwood’s argument that late delivery justified rejection under the U.C.C. defeated the seller’s claim as a matter of law at the Rule 12(b)(6) stage.

## Decision

- The court denied Sherwood’s Rule 12(b)(6) motion to dismiss.
- Taking the pleaded facts as true and drawing reasonable inferences for D.P. Technology, the court held that the complaint adequately stated a claim for breach of contract based on Sherwood’s return of the system and refusal to pay.
- The court concluded that Sherwood’s reliance on late delivery as a basis for rejection did not establish, on the face of the complaint, that D.P. Technology could prove no set of facts entitling it to relief.

## Legal Principles

- On a Rule 12(b)(6) motion, the court tests the legal sufficiency of the complaint, accepts well-pleaded facts as true, and draws reasonable inferences in favor of the nonmoving party; dismissal is improper unless it appears beyond doubt that the plaintiff can prove no set of facts that would entitle it to relief.
- A complaint need not prove the case; it must plead enough to outline the elements of the claim or allow inferences that those elements exist.
- Under U.C.C. Article 2, a seller may pursue contract remedies when a buyer refuses to accept and pay for goods; whether a buyer’s rejection is rightful can turn on factual and contractual details.
- When a defendant’s motion to dismiss depends on treating its rejection as justified as a matter of law (for example, based on an alleged nonconforming tender due to late delivery), the court generally will not resolve that merits dispute on the pleadings where the complaint itself supports a viable claim for wrongful return and nonpayment.

## Conclusion

The district court allowed D.P. Technology’s breach-of-contract action to proceed because the complaint plausibly alleged a contract for a custom computer system, delivery of software within the contract period and hardware shortly thereafter, Sherwood’s return of the entire system, and refusal to pay—allegations sufficient to state a claim notwithstanding Sherwood’s late-delivery defense at the motion-to-dismiss stage.


D.P. Technology Corp. v. Sherwood Tool, Inc., 751 F. Supp. 1038 (1990)