Apex Digital, Inc. v. Sears, Roebuck & Co., No. 12-3115 (7th Cir. 2013)
Annotate this CaseApex, a manufacturer of electronics, and Sears entered into an agreement in 2003. In 2004, Sears implemented a program to create a return reserve on Apex’s account. The return reserve was an internal accounting mechanism used to place a negative dollar deduction on Apex’s account; Sears would hold back payment to Apex until the amount showing owed by Sears exceeded the amount of the reserve. In 2009 Apex filed suit, alleging that Sears breached the contract by refusing to pay $8,185,302 owed for goods delivered. The district court granted Sears summary judgment, finding that the action was barred by the four-year statute of limitations in Section 2–725 of the Uniform Commercial Code. The Seventh Circuit affirmed. Apex was on notice that Sears was not going to pay the deductions after each invoice and even marked these “wrongful” deductions in its own Invoice Report. For more than four years, Apex sat on its right to sue.
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