## Facts

- National Knitting Co. (NKC), a Milwaukee manufacturer and dealer in knitted goods, received a written order from Bouton & Germain Co. (Bouton), a Ripon jobber in knitted goods, for numerous kinds (“items” or “styles”) of gloves.
- The order listed multiple line items with specified quantities and fixed prices for each item, totaling \$322.86.
- The order set future delivery (the following May) and provided that the bill would be dated as of November 1, 1906, payable in 30 days.
- NKC accepted the order and later delivered the greater part of the gloves ordered.
- NKC never delivered two specific items from the order: one item of 18 dozen gloves and another item of 6 dozen gloves.
- Bouton accepted and kept the gloves that NKC delivered but withheld payment, claiming NKC’s failure to deliver all items meant NKC could not recover anything on the contract.
- NKC sued in the Municipal Court of Ripon to recover the contract price for the gloves it had delivered.
- Bouton argued the contract was entire (so NKC could not sue for any part of the price until full delivery) and, alternatively, sought damages for the items not delivered if the contract were treated as severable.
- The municipal court held the contract was severable, awarded NKC the contract price for the goods delivered, and reduced that amount by Bouton’s damages (lost profits) on the undelivered items.
- Bouton appealed to the Wisconsin Supreme Court.

## Issues

1. Whether a written order for multiple distinct items of goods, each priced separately, is an entire contract or a severable contract.
2. If the contract is severable, whether the seller may recover the price of delivered goods accepted by the buyer, subject to an offset for the buyer’s damages for the seller’s nondelivery of other items.

## Decision

- The Wisconsin Supreme Court affirmed the judgment.
- The contract was severable rather than entire.
- NKC could recover the contract price for the gloves it delivered and Bouton accepted.
- Bouton’s remedy for NKC’s failure to deliver the remaining items was damages (here treated as an offset), not withholding payment for all delivered goods.

## Legal Principles

- Whether a contract is entire or severable turns on the parties’ intention, determined from the contract’s structure and the circumstances of the transaction.
- The divisibility of the subject matter and the apportionment of consideration by units (separately stated item prices) are strong indicators that a sales contract is severable, though not alone conclusive in every case.
- When a contract for a “bill of goods” lists many distinct articles at stated unit prices, courts generally treat the agreement as severable so that performance and payment can be matched item by item.
- In a severable sales contract, a buyer who accepts and retains delivered goods is obligated to pay the agreed price for those goods, even if the seller fails to deliver other contracted items.
- The buyer may recover or set off provable damages caused by nondelivery of the remaining items (including lost profits where properly shown), but nondelivery of some items does not bar the seller’s recovery for goods delivered and accepted.

## Conclusion

National Knitting Co. v. Bouton & Germain Co. held that an order for multiple glove items with separate prices was severable, allowing the seller to recover the contract price for the goods delivered and accepted while permitting the buyer to reduce that recovery by damages attributable to the seller’s failure to deliver the remaining items.


National Knitting Co. v. Bouton & Germain Co., 123 N.W. 624 (1909)