Clark Oil agreed to sell Amerada Hess several hundred thousand barrels of oil at $24 each by January 31, The oil had to meet EPA requirements with the sulfur content not to exceed one percent. On January 26, Clark tendered oil from various ships. Most of the oil met specifications, but approximately 30% of the oil contained excess sulfur. Hess rejected all of the oil. Clark recirculated the oil, meaning that it blended the high-sulfur oil with the rest and notified Amerada that it could deliver 100 percent of the oil as specified by January 31. Hess did not respond. On January 30. Clark offered to replace the oil with an entirely new shipment due to arrive February 1. Hess rejected the offer. On February 6. Clark retendered the original oil, all of which met contract terms and Hess rejected it. Clark sold the oil elsewhere for $17.75 per barrel and filed suit. Is Clark entitled to damages? What are the arguments for Clark? What are the arguments for Hess? Can EPA step in and void the sale? Note! Remember contract issues of offer, acceptance, perfect tender, rejection and the like under Common Law and the UCC.

Clark is entitled to damages and it can request a summary judgment against Hess. Initially Clark failed to deliver the proper oil, but then it offered to deliver the proper oil on February 1, which was one day after the original date set by the contract. Clark offering a new shipment of oil is considered an offer to cure. When Clark again tried to deliver on February 6, but the shipment wasn't rejected due to technical specifications but simply because Hess decided to do so.

Under UCC section 2-508(2), a seller is allowed reasonable time to cure after the expiration of a contract it the seller believes that it can reasonably delivered the promised goods. One single day after the expiration date of the contract (February 1) or 6 days after (February 6) are considered reasonable times to cure an offer, and Clark's tests indicated that the product was good. So Clark meets the two requirements to sue Hess since; it offered to cure in a reasonable time and had a good product to deliver.