## Facts

- Peavey Electronics Corporation contracted with Baan U.S.A., Inc. to provide and implement an enterprise software system, including sales and distribution modules, to integrate with Peavey’s operations.
- Baan worked on installation and integration for more than a year, and the sales and distribution components went live in July 1999.
- Peavey alleged the rollout failed, requiring manual workarounds, causing shipping delays, and leading to substantial financial losses over several years.
- Peavey asserted Baan knew of compatibility and performance problems during and after launch.
- During the post-implementation period, Peavey complained about performance and sought fixes; one employee asked Baan to “give some money back,” characterized as part of business negotiations rather than an assertion of breach.
- Peavey did not clearly notify Baan that it was asserting a breach of contract or warranty within the relevant period.
- About four years after the agreement/implementation period, Peavey sued, asserting tort and contract-based claims, including warranty theories based on allegedly defective software and implementation.
- Baan moved for summary judgment, arguing Peavey’s warranty-based claims were barred for failure to provide notice of breach under U.C.C. § 2-607(3)(a).
- The trial court granted summary judgment for Baan and denied Peavey’s motions to compel additional discovery.
- Peavey appealed both the summary judgment and the discovery rulings.

## Issues

1. Whether a buyer that accepted software (treated as goods under the U.C.C.) could pursue warranty claims without providing timely notice that it claimed the transaction involved a breach, as required by U.C.C. § 2-607(3)(a).
2. Whether the trial court erred in denying Peavey’s discovery motions and granting summary judgment based on the notice defense.

## Decision

- The Mississippi Court of Appeals affirmed summary judgment for Baan.
- The court held Peavey failed, as a matter of law, to provide timely and adequate notice of breach under U.C.C. § 2-607(3)(a), barring warranty-based remedies.
- The court affirmed the denial of Peavey’s motions to compel discovery and found no reversible error in the trial court’s handling of discovery in relation to the notice-based dispositive issue.

## Legal Principles

- Under U.C.C. § 2-607(3)(a), a buyer who accepts goods must, within a reasonable time after discovery (or when it should have discovered) a breach, notify the seller of breach or be barred from any remedy.
- Notice must reasonably inform the seller that the buyer is claiming the transaction involves a breach; general dissatisfaction, ongoing troubleshooting, or requests for concessions may be insufficient.
- A buyer’s operational complaints and requests for remedial work do not satisfy § 2-607(3)(a) unless they communicate that the buyer is asserting breach and seeking remedies for that breach.
- When the record contains no communication that could qualify as timely breach notice, the notice element may be resolved on summary judgment because no genuine issue of material fact exists.
- Trial courts have discretion over discovery management, and discovery may be limited or denied where the requested material does not affect a dispositive legal prerequisite such as statutory notice.

## Conclusion

The court affirmed judgment for the seller because the buyer’s years of performance complaints did not constitute timely U.C.C. § 2-607(3)(a) notice that it was asserting a breach, and the lack of such notice barred warranty remedies; the court also upheld the trial court’s discovery rulings.


Peavey Electronics Corp. v. Baan U.S.A., Inc., 10 So. 3d 945 (Miss. Ct. App. 2009)