Kawasho International, U.S.A., Inc. v. Lakewood Pipe Service, Inc.

Factual and Procedural Background

The Facts

Plaintiff Kawasho International, U.S.A., Inc. (Kawasho) is a New York corporation doing business in California as a wholesaler of pipe which it imports from Japan. Lakewood Pipe Service, Inc. (Lakewood) is a corporation, engaged in the pipe business, and was a customer of Kawasho.

Commencing in 1974 Kawasho began to sell steel pipe products to Lakewood on open account. The sales were generally initiated by a telephone call from Lakewood to Kawasho at its Los Angeles office, followed by a written Lakewood purchase order, prepared by Lakewood, over the signature of Frank Tybus, Lakewood’s president, which included definite payment terms, such as “Terms Net 60 days,” or “Terms Net 90 days.” Kawasho would then send Lakewood a confirming sales contract, prepared by Kawasho, setting forth the same payment terms which had been submitted by Lakewood, and terms additional to those proposed by Lakewood which generally related to packing and shipping. In addition, many Kawasho sales contracts (exhibits 22-28) contained the following provision: “Interest will be charged on all delinquent payments at the rate of 11% per annum from due…