Full opinion text
MEMORANDUM OPINION AND ORDER SHADUR, District Judge. This painfully complicated case (at least in factual terms) involves a dispute over castings produced for a manufacturer of oil-drilling valves. Quaker Alloy Casting Co. (“Quaker”), an unincorporated division of Harsco Corporation (“Harsco”), has sued Gulfco Industries, Inc. (“Gulfco”) in a two-count Complaint seeking (1) payment for castings already delivered and (2) specific performance of Gulfco’s obligation to take and pay for goods ordered and not yet delivered. Gulfco has filed counterclaims against Quaker and cross-claims against third-party defendant Consolidated Foundries & Manufacturing Corporation (“Consolidated”), the former owner of Quaker’s investment casting operation, for breach of express and implied warranties for goods previously delivered. Quaker has now moved for summary judgment under Fed.R.Civ.P. (“Rule”) 56 on its Complaint and has jointly moved with Consolidated for summary judgment on Gulfco’s counterclaims and cross-claims. In addition, each of Quaker and Gulfco seeks sanctions against the other under Rule 11 (with Quaker also claiming entitlement under 28 U.S.C. § 1927 (“Section 1927”)) for various filings in the case to date. For the reasons stated in this memorandum opinion and order: 1. Quaker-Consolidated's motion for summary judgment is denied. 2. Quaker’s summary judgment motion is granted in substantial part: It is successful on its comparatively small claim in Complaint Count I and as to the work-in-progress component of Complaint Count II. Its Count II motion is denied as to the balance of the claim asserted there. 3. Quaker’s motion for sanctions is granted in part and deferred in part. 4. Gulfco’s sanctions motion is deferred for later resolution. Facts Given the nature of the pending motions, it would be unwieldy to essay a total exposition of the facts at this point. Instead the essential background information will be provided here, with additional facts set out at pertinent points in the substantive discussion. At the outset, the corporate cast of characters comprises: 1. Consolidated, a Delaware corporation headquartered in Illinois at all times relevant to these motions; 2. Casting Engineers (“Casting”), originally an unincorporated operating division of Consolidated located in Niles, Illinois; 3. Quaker, already identified as an unincorporated division of Harsco, a Delaware corporation with its principal place of business in Pennsylvania; and 4. Gulfco, an Oklahoma corporation with its principal place of business in that state. Diversity jurisdiction thus existed between Quaker (that is, Harsco) and Gulfco at the commencement of this action, and the later injection of Consolidated (a second Delaware corporation) did not destroy the original diversity (see Owen Equipment & Erection Co. v. Kroger, 437 U.S. 365, 375-77, 98 S.Ct. 2396, 2403-04, 57 L.Ed.2d 274 (1978)). In 1981 discussions began between Casting and Gulfco as to Casting’s possible production of components for Gulfco to use in its valves for the oil and gas drilling industry. Golf buffs (among others) will recognize the process employed by Casting: “investment casting” (see G S.J. Mem. 3 ). Gulfco provided Casting with drawings and specifications as to dimensions, material and heat treatment, and Casting produced price quotations for 33 different parts for several sizes of two different valves produced by Gulfco — the GO and the G2B valves. Though the parties dispute exactly how the order was placed by Gulfco and what documents or conversations constitute the operative offer and acceptance for purposes of establishing the terms of the contracts), there is no question that at the end of November or the beginning of December 1981 Gulfco placed orders for the 33 different parts. Those orders were subject to Gulfco’s approval of samples, which Casting then proceeded to produce. Approval sessions for the samples were held in approximately February 1982. Again there is a dispute as to which deviations from the specifications or drawings Gulfco approved at that time. For some of the parts, Gulfco’s approval was conditioned on changes or corrections to the samples. Only after samples were approved did production of the parts actually begin (Q-C 12(e) 1115). One of the facts the parties do not dispute is that the bottom dropped out of the oil production market in 1982, creating a drastic impact on Gulfco’s sales and orders. Gulfco quickly fell behind on its payments to Casting. Because of that delinquency, in September 1982 Casting stopped initiating production of any new parts for Gulfco, and in December it ceased production entirely (Q-C 12(e) 1124). Negotiations then ensued between Gulfco and Consolidated. Gulfco owed Consolidated (leaving aside the issue whether nonpayment might be justified by any alleged defects in the parts) for goods already delivered. Gulfco also appeared obligated for goods ordered and not yet delivered: finished castings not yet shipped, castings in various stages of production and parts on which production had not yet started. Quaker-Consolidated insist they and Gulfco discussed quality problems at the time of those negotiations over Gulfco’s financial difficulties (Q-C 12(e) K 25). Gulf-co disputes the extent of involvement of quality issues during the financial negotiations, but it is undisputed that the parties discussed acceptance criteria for the parts and other technical issues during 1982 and 1983 (see G S.J. Mem. 13-14). According to Gulfco, it reached an agreement in principle with Consolidated in early 1983 under which the amounts then due would be converted into a promissory note and Gulfco would also agree to purchase its casting requirements from Casting for three years (G S.J. Mem. 39). At that point, however, Ingram purchased the remaining interest in Gulfco and injected additional capital into the operation. Gulfco was then able to work out a different agreement with Consolidated, executed in May 1983. Under the Agreement To Modify Purchase Order Commitments (the “Agreement,” G Ex. 51): 1. Gulfco paid Consolidated $585,-702.65. 2. Consolidated cancelled the purchase orders for goods on which production had not started. 3. For the goods on which production had at least started, Gulfco agreed to take the finished goods and the work-in-progress. Gulfco then issued three superseding purchase orders reflecting the inventory of parts held by Casting and rescheduling delivery of the finished goods and the work-in-progress for 1984 through 1986. Consolidated acknowledged receipt of the orders on Gulfco’s forms. There is a sharp dispute over interpretation of the Agreement, primarily as to its third element. Quaker-Consolidated insist Gulfco agreed to take the work-in-progress “as is,” meaning without any warranties. Gulfco asserts “as is” merely meant it agreed to take the goods without any further processing, saying the price for the goods was pegged at 65% of the original price to reflect the average stage of completion of the parts. On August 11, 1983 the cast of characters expanded when Consolidated sold the Casting assets to Harsco for its Quaker division (G Ex. 59). Before closing with Consolidated, Harsco requested and received written confirmation of Gulfco’s obligations under the Agreement. That took the form of a letter by Consolidated’s Vice President John Dickey (“Dickey”) acknowledged by Gulfco’s Comptroller Ronald Kozak (“Kozak”) (Q-C Ex. N). That document too is read differently by the parties, with Gulfco insisting (1) it was not meant to confirm that the work-in-progress was purchased without warranties and (2) it was not an enforceable modification to that effect. On August 10, 1983 Kozak reconfirmed Gulfco’s commitment to the new purchase orders, this time without any reference to the terms (Q-C Ex. CC). In September 1983 a new inventory of the parts held by Casting was conducted, yielding a different count. Accordingly the parties modified the purchase orders to reflect the new accounting. In 1984 Casting’s delivery of parts to Gulfco resumed, beginning with the finished parts, with the uncompleted goods set to follow in 1985 and 1986. G S.J. Mem. 47-49 asserts that beginning in late 1983 Gulfco became aware of the defective nature of Casting’s goods. As Gulfco’s production picked up again, it had accelerated its inspection of the parts (its increased quality screening was also motivated by problems with other Gulfco products not involving Casting components). Before that, Gulfco’s inspection of the goods consisted of visual inspection on receipt (to identify patent dimensional defects), with additional inspection occurring as the parts were used in the assembly of valves (G S.J. Mem. 76-77). During late 1983 and early 1984 Gulfco and Casting renewed their discussions over acceptance criteria for the parts and over Casting’s willingness either to cure the problems or to accept returns. Then in August 1984 Casting wrote Gulfco a letter in which it specifically refused to take any more returns, saying Gulfco’s rejection of the parts was untimely (Casting said it had accommodated Gulfco during the latter’s slow business period by accepting rejects during a 12-month period after shipment, rather than imposing Casting’s standard requirement of 30 or 60 days’ written notice of rejection). Gulfco ultimately sent a December 7, 1984 letter refusing to accept or receive any further shipments from Casting (Gulfco says the letter was occasioned by its concern over Casting’s refusal to address the quality problems). In February 1985 Quaker filed its Complaint here against Gulfco, asserting its claim for goods already delivered in 1984 (now calculated at $25,309.98, Q S.J. Mem. 3) and those Gulfco had committed to take through 1986 (valued at $529,055.47, id.). Gulfco answered and counterclaimed in July 1985, stating a claim for $500,276 for breach of express warranties, implied warranties of merchantability and implied warranties of fitness for particular purposes. In November 1985 Gulfco amended its Answer and asserted a fourth counterclaim, charging Quaker had breached the contract by failing to produce components with the agreed-upon chemical and mechanical properties and heat treatment specifications and by failing to provide proper certifications of those properties. Quaker answered Gulfco’s original counterclaims in August 1985 (and then supplemented its Answer in December). Quaker also impleaded Consolidated as a third-party defendant, claiming Consolidated was contractually obligated to Quaker if the latter were found liable to Gulfco. Shortly thereafter Gulfco filed a cross-complaint against Consolidated mirroring its counterclaims against Quaker (those cross-claims were similarly amended in December). Consolidated answered in December 1985 by asserting a counterclaim against Quaker for indemnification and advancing numerous affirmative defenses against Gulfco. One final development should be noted at this juncture: On August 2, 1986 Gulfco formed a partnership with Cactus Wellhead Comp. That partnership, known as Ingram Cactus Co. (“Ingram Cactus”), became the transferee of various assets from Gulfco. Quaker-Consolidated contend those assets included all the inventory Gulfco now claims is defective, thereby affecting its rights against Quaker-Consolidated. Gulf-co says it intended to transfer only nondefective assets to the new entity. Summary Judgment Standards Despite their familiarity, Rule 56’s standards merit restating for their potential impact on the current motions. Three interrelated principles are basic to the analysis: 1. As movants for summary judgment. Quaker and Consolidated bear the burden of proof: They must demonstrate the absence of a genuine issue of material fact (Celotex Corp. v. Catrett, 477 U.S. 317, 322-25, 106 S.Ct. 2548, 2552-54, 91 L.Ed.2d 265 (1986)). 2. “Materiality” of a factual dispute turns on the fact being outcome-determinative. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986) phrased that concept this way: Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment. 3. In evaluating the factual record this Court must draw inferences in Gulf-co’s favor, but “only reasonable inferences, not every conceivable inference” (DeValk Lincoln Mercury, Inc. v. Ford Motor Co., 811 F.2d 326, 329 (7th Cir.1987)). Despite their burden as movants, Quaker-Consolidated can also prevail if Gulfco has failed to present evidence sufficient to establish an essential element of its case against them (Celotex, 477 U.S. at 322, 106 S.Ct. at 2552). As Beard v. Whitley County REMC, 840 F.2d 405, 410 (7th Cir.1988) (emphasis in original) put it recently: [W]hen confronted with a motion for summary judgment, a party who bears the burden of proof on a particular issue may not rest on its pleading, but must affirmatively demonstrate, by specific factual allegations, that there is a genuine issue of material fact which requires trial. Relatedly, a nonmovant such as Gulfco can also lose if the evidence it does present is insufficient as a matter of law. Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986) (quoting First National Bank of Arizona v. Cities Service Co., 391 U.S. 253, 289, 88 S.Ct. 1575, 1592, 20 L.Ed.2d 569 (1968)) has reconfirmed that facet of the analysis: Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party there is no “genuine issue for trial.” Matsushita also teaches “metaphysical doubt” about the material facts of a case is insufficient to preclude summary judgment (id. 475 U.S. at 586, 106 S.Ct. at 1356; see also Beard, 840 F.2d at 409-10). Choice of Law Even though choice of law should be the first order of business in any dispute involving more than a single state, the litigants here have touched that subject only briefly (Q-C S.J. Mem. 8-9, G S.J. Mem. 55 n. *). All parties agree, however, that (1) only Illinois or Oklahoma law is conceivably applicable and (2) the law of those states is in harmony as applied to this dispute. Both have adopted the relevant portions of the Uniform Commercial Code (“UCC”) governing this sale of goods, and they have no apparent disagreements in their interpretation of relevant portions of the UCC. Moreover, in light of the UCC’s universal adoption the litigants have cited freely to a variety of jurisdictions, and this Court has generally done the same in search of useful or persuasive authority. Summary Judgment Contentions This opinion will first address the Quaker-Consolidated motion for summary judgment on the Gulfco counterclaims and cross-claims. It will then turn to Quaker’s motion for summary judgment on its own Complaint. Finally this opinion will consider the appropriateness of sanctions at the present time. Before it does so, however, it will summarize the parties’ contentions on the Rule 56 motions. As for the Quaker-Consolidated motion, it offers two separate categories of argument: 1. Gulfco has provided insufficient evidence that the goods it received were in fact defective. 2. Even were that not so, there are a variety of ways in which Gulfco has waived its claims or failed to satisfy preconditions to its action. On the first of those topics Quaker-Consolidated have (a) presented an assortment of evidence showing Gulfco’s defect claims are unsupported and (b) moved to strike (or to have this Court disregard) the affidavit of Edward Bravenec (“Bravenec”), presented by Gulfco to substantiate its claims of defect. On the second topic Quaker-Consolidated have asserted: (a) Gulfco’s warranty claims were excluded by the operative contract terms between the parties. (b) There are no implied warranties of merchantability or fitness for a particular use in this transaction. (c) Gulfco accepted the goods (indeed, it did so with knowledge of the defects now sued upon), and it failed to revoke its acceptance in a timely fashion. (d) Gulfco failed to give the requisite notice that the goods were defective and that Quaker-Consolidated had breached the contract between the parties. (e) As a matter of law, the Agreement operates as an “accord and satisfaction” to bar Gulfco’s claims. Gulfco responds to the first Quaker-Consolidated position by contending (a) genuine disputed issues of fact exist over whether the Casting goods are conforming (for which purpose the Bravenec affidavit is admissible) and (b) its claims have not been waived or otherwise precluded as a matter of law. On the second topic Gulfco takes issue with each of the five assertions by Quaker-Consolidated. As for Quaker’s own Complaint, its motion for summary judgment asserts: 1. Gulfco cannot reject the shipped finished goods because the defect claims are unsupported (the same argument it makes in opposition to Gulfco’s counterclaim). 2. All work-in-progress was sold to Gulfco “as is,” negating any claim for defects. 3. Even if some of the goods delivered to date are defective, that doesn’t justify wholesale rejection of all further goods ordered. Gulfco retorts to each of those arguments: 1. It urges (as it did on its own counterclaim) that the defective condition of the goods is genuinely in dispute. 2. It says it did not agree to purchase the work-in-progress without warranties. 3. It claims its discovery of defects to date supports its right to cancel delivery of all further goods. Gulfco’s Claims of Defect Gulfco identifies a number of claimed defects in the Casting goods (G S J. Mem. 59-72): 1. Some of the parts have unacceptable “surface pitting.” 2. Chemical and physical properties of the parts are out of specification. 3. Material certifications of the parts are unreliable and improper. 4. There is a dimensional defect in the “stem adaptors.” 5. All the parts are unmerchantable and unfit for their intended purpose. In light of the huge amount of discovery undertaken to date, Gulfco’s evidentiary support for many of its claims is dangerously thin. Its position is even more precarious given the considerable evidence submitted by Quaker-Consolidated that the parts are conforming and that Gulfco used them without a problem until the oil industry recession. Because the burden on the issue is Gulfco’s, the condition of the goods is potentially dispositive of both summary judgment motions. If Gulfco has not sufficiently put in issue that the goods are defective, it loses now on both its counterclaim and its defense to Quaker’s action. But Gulfco survives that first hurdle — albeit barely in several areas. With the benefit of all inferences running in Gulfco’s favor, and with this Court barred from resolving credibility disputes on such motions, it is constrained to find disputed issues of fact exist as to the condition of the Casting parts. That conclusion requires a good deal of explanation. 1. Bravenec Affidavit At the outset it is necessary to address the admissibility of the Bravenec affidavit, a significant part of the evidence (though not the only evidence) of defect submitted by Gulfco. Quaker-Consolidated move to strike the affidavit or have it disregarded because (1) Bravenec is not qualified as an expert on the matters to which he attests and (2) his opinions are based on assumptions not supported by the record. Those objections succeed only in part. A. Bravenec’s Qualifications Bravenec’s affidavit and his attached resume set out his extensive qualifications as a metallurgical engineer and quality control expert. Bravenec Aff. If 3 speaks of his 32 years of experience with products made for the oil and petrochemical industries. Nonetheless Quaker-Consolidated say Bravenec’s credentials do not qualify him as an expert in the foundry industry generally or investment casting specifically. Because Rule 56(e) limits this Court’s consideration to admissible evidence, it is necessary to resolve that question (see Bulthuis v. Rexall Corp., 789 F.2d 1315, 1318 (9th Cir.1985)). Bravenec is unquestionably qualified to perform quality assurance tests on the parts and relate the results. His experience in the oil and petrochemical industry also renders him competent to testify as to minimum standards of merchantability and fitness of parts manufactured for use in the drilling industry (see Baumholser v. Amax Coal Co., 630 F.2d 550, 551 (7th Cir.1980)). And although his experience does not extend to investment casting as such, Quaker-Consolidated have failed to demonstrate that certification techniques and standards are different in investment casting from those in the steel industry in general (G Strike Mem. 5). With the benefit of the required favorable inferences, Gulfco is therefore also entitled to have Bravenec’s opinion considered (at least at this stage) as to the chemical and material certifications provided by Casting for Gulf-co. B. Foundation for Bravenec’s Opinions Quaker-Consolidated also challenge Bravenec’s conclusions about defects in the Casting parts because, they say, his opinions are necessarily based on assumptions contrary to uncontested evidence in this case. Except for Bravenec’s conclusions about a “hardness” defect in the goods and the required carbon content of some of the castings, this Court finds his conclusions are based on facts at least genuinely in dispute in this case. Of course an expert’s opinion must have a “reasonable factual basis” (American National Bank and Trust Co. of Chicago v. K-Mart Corp., 717 F.2d 394, 399 (7th Cir.1983)). In the Rule 56 context, that means a court can grant summary judgment over an expert’s testimony based on unsupported assumptions (Merit Motors, Inc. v. Chrysler Corp., 569 F.2d 666, 672-73 (D.C.Cir.1977)). But it also means the court cannot ignore an opinion based on matters that, while not necessarily unchallenged, are at least a matter of genuine factual dispute. On that score Bravenec Aff. 1116 says 78.6% of the grade CA15 parts showed a hardness reading above or below the appropriate level. Bravenec Aff. If 17 goes on to cite that as one of the factors meriting rejection of the parts. But Quaker-Consolidated point out Bravenec’s failure to take into account the fact that hardness problems can be ameliorated by additional heat treating and other methods (Q-C Strike Mem. 9). Gulfco has not responded and has submitted no evidence that hardness problems could not be thus cured consistently with industry practice. Accordingly Bravenec’s conclusions as to alleged hardness nonconformities will be ignored. Bravenec Aff. 1116 also presents evidence that the CA 15 and 4140 parts are outside the chemical specifications set for those materials. One of the assumptions Bravenec makes (Aff. 1115) is that the CA15 parts must contain between .10% and .175% carbon. Q-C Strike Mem. 8 asserts there was no lower limit set for carbon by industry standards. G Strike Mem. 12 n. 8 responds that a lower limit was set not by industrial standards but by agreement between the parties — a contention that rests wholly on a memorandum written by Casting’s Richard Charlton (G Ex. 42). But that document shows that Gulfco requested a lower limit for carbon, not that the parties agreed upon such a standard. Bravenec’s conclusions based on that alleged nonconformity are therefore unsupported and will also be disregarded. Quaker-Consolidated level a number of other objections at the Bravenec affidavit based on the inherent unreliability of its conclusions (see Q-C Strike Mem. 10-11), but those matters go to the weight — the persuasiveness — of the evidence rather than its admissibility (see Kestenbaum v. Falstaff Brewing Corp., 575 F.2d 564, 575 (5th Cir.1978), cert. denied, 440 U.S. 909, 99 S.Ct. 1218, 59 L.Ed.2d 457 (1979)). Again the summary judgment posture of the case saves Gulfco, and the affidavit will not be stricken (cf. Jorman v. Veterans Administration, 579 F.Supp. 1407, 1412, 1413 n. 11 (N.D.Ill.1984)). With the Bravenec affidavit thus in hand, this opinion turns to Gulfco’s specific claims of defect. Genuine disputed issues exist in several areas. 2. Surface Pitting Many of the parts Casting manufactured for Gulfco are gates and seats for the GO and G2B series valves. Proper operation of the valves depends on a tight seal between the gates and seats, which control the flow of material through the valve. Gulfco claims its agreement with Casting was that the sealing surfaces of the gates and seats would be defect-free without any pitting. Quaker-Consolidated contest that claim, saying: 1. Pitting was allowed on the GO gates and seats because the sealing surface on those parts was actually a coating applied to the casting, which masked any surface defects. 2. Pitting on the G2B gates became a problem only when Gulfco tried to use those gates in a new series of valves— the G3B valves — that required a higher quality sealing surface. Quaker-Consolidated have presented considerable evidence that the gates and seats are conforming. Simply stated, their theory is that Gulfco was entirely satisfied with those parts (and with all the others now at issue) until demand for its valves dried up. At that point, they say, Gulfco belatedly tried to discover illusory grounds to reject parts it no longer needed. Gulf-co’s rejoinder, also in abbreviated form, is that it only lately discovered the defects in the parts, that defect-free sealing surfaces have been part of the agreement all along and that it is entitled to enforce that requirement. Quaker-Consolidated undoubtedly have a strong case that surface pitting is not actually a defect. Gulfco used a large number of the parts without a problem (though Gulfco says only after careful screening), it returned very few parts to Casting as defective and it received no customer complaints. Quaker-Consolidated also have produced evidence that the parts did not have to be produced without any pitting on the sealing surfaces (see Anthony Leonard (“Leonard”) Dep. 203, John Kleeschulte Dep. 61-62). But Gulfco has responded with at least some evidence that pitting is a defect on both the GO and G2B series valves. Gulf-co engineer Burrows Aff. tilt 2-3 states that sealing surfaces even on the GO parts were to be free of defects and that not all those parts were to be coated in such a way as to mask surface defects. There is also evidence that no pitting (also referred to as porosity problems) was allowed on the G2B gates (see Burrows Dep. 41, Leonard Dep. 48-49; see also Robert Reaves Dep. 105-06). Unquestionably there is contrary evidence in the record from other participants, and sometimes even from the same witnesses, showing there was not a pitting requirement on all the parts (see Leonard Dep. 203-04). However, on a summary judgment motion the comparative strength of the parties’ positions does not control— this Court cannot weigh the evidence and assess the credibility of witnesses (Anderson, 477 U.S. at 249, 106 S.Ct. at 2510). Gulfco’s evidence suffices to create a disputed issue as to whether defect-free sealing surfaces were a casting requirement. That being so, the Bravenec Aff. 1116(a) statement that 63.5% of the gates and seats have sealing surface pitting is enough to put in issue the defective condition of the GO gates and seats and the G2B gates. 3. Nonconforming Chemical and Physical Properties Various industry standards (see n. 14) set the required chemical composition of the parts produced by Casting. Bravenec’s chemical analysis (Bravenec Aff. 1116) indicates the CA15 and 4140 parts may be nonconforming: He found 13.7% of the CA15 parts and 83.9% of the 4140 parts are outside the specifications. Bravenec Aff. II18 opines that renders all the parts cast of those materials rejectable, because Gulfco would have to verify the composition of the parts piece by piece at great expense. That evidence suffices to create a genuine factual issue over the chemical content of the Casting parts (except for parts made of Grade 316 steel, on which Bravenec draws no conclusion). Though Quaker-Consolidated have argued Bravenec’s affidavit is generally inadmissible, they have not attempted to dispute the affidavit’s creation of a genuine issue over the chemical properties of the parts. As already noted, the Quaker-Consolidated arguments about the unreliability and statistical inaccuracy of Bravenec’s analysis go to the weight of that evidence, not its admissibility. Gulfco has also presented evidence that the G2B gates are nonconforming because of a condition known as “internal shrink” (porosity inside the casting). G Ex. 46, a Casting memorandum, indicates that 56% of the G2B gates had unacceptable internal shrink. Casting engineer David Holzmann (“Holzmann”) confirmed that (1) the same defect would potentially apply to all G2B gates, (2) the cause of the problem was not corrected until after production of the parts ceased and (3) he didn’t know if all the defective castings had been scrapped (Holzmann Dep. 61-69). All that is enough, when coupled with pro-Gulfco inferences, to put in issue an internal shrink defect in the G2B gates. 4. Improper and Inaccurate Certifications Casting furnished Gulfco a sworn certification of the composition of each group of castings. Such certification is a material part of the contract (see Leonard Dep. 111-12; Q-C 12(e) ¶ 14). Gulfco now claims the certifications it received are defective because they don’t certify the material used to produce the castings. Quaker-Consolidated respond Gulfco got precisely the type of certification for which it bargained. Purchasers such as Gulfco have a choice of the type of certification deliverable with castings. Thus a manufacturer may be required to certify the chemical composition of each batch (also known as a “heat”) of metal as it is poured — a foundry heat certification (Q-C 12(e) ¶ 14 n. 7). Another (and less expensive) certification covers only the “master heat,” roughly understood as the composition of the metal purchased by a manufacturer that will be melted to form the casting (see G S.J. Mem. 25-26). Master heat certification is different because chemicals are added to the mix with each foundry heat to keep the material within the relevant specifications (see Robert Zugehar (“Zugehar”) Dep. 249). Here Casting was to supply Gulfco with master heat certification. Gulfco has submitted evidence that Casting’s master heat certifications are defective. Casting would certify the composition of material purchased from its supplier if that material met specifications, or Casting would certify the first pour from its own casting process if additional materials were necessary to bring the mix within specification (Zugehar Dep. 247-51). However, Casting would regularly add internally generated scrap or “revert” to the materials purchased from outside vendors (see Leonard Dep. 78-85, G S.J. Mem. 26). With revert added, Casting’s master heat certification might not reflect the true composition of the material. Quaker-Consolidated say Gulfco clearly knew revert would be used and what the certification would reflect (see Leonard Dep. 78-85). They allege Gulfco agreed, in order to save money, both to the use of scrap and to certification that would therefore not reflect the actual composition of each and every piece cast (Q-C 12(e) If 14). In response, Gulfco says Casting was operating under an incorrect definition of master heat certification, buttressing that position with Bravenec’s attestation that Casting’s definition is not consistent with industry understanding (Bravenec Aff. 1121; see also Holzmann Dep. 197-99, stating Casting’s definition of master heat was different from any he’d known in the industry). Gulfco has also submitted Wagner Aff. 3 H17, which says Gulfco was expecting “master heat certification as generally defined in the foundry industry with which we had been dealing.” Again Gulfco averts summary judgment. It has put into issue whether Casting’s definition of .master heat certification was consistent with general foundry industry practice and whether Gulfco in fact agreed to accept a modified form of master heat certification. 5. Stem Adaptor Defects Gulfco presents a final material defect: It says the cross-holes in the GO stem adapters are misaligned (G S.J. Mem. 69). Quaker-Consolidated recognize that as a material variation from Gulfco’s design specifications, but they contend Gulfco waived that nonconformity during the approval of samples (Q-C S.J. Mem. 16-17; Leonard Stmt. 17-18). Gulfco has provided enough evidence of nonwaiver during sample approval to survive summary judgment now. Gulfco Engineer Burrows Aff. 114 asserts the condition was not discovered until months after receipt of the parts. That statement contradicts the evidence from Quaker-Consolidated and creates a disputed factual issue. Whose Contract Terms Control? This Court has been tendered a confused picture bearing on precisely how the parties formed their contracts for the parts and just which contract documents control the transaction. Both those inquiries are critical to the outcome of (at least) the Quaker-Consolidated defense to the majority of Gulfco’s counterclaims, because the Casting standard-form price quote (Q-C Ex. F) and order acknowledgement (Q-C Ex. K) contain terms that would bar Gulfco’s action for damages. On the front of each form is a statement that it is subject to the terms and conditions found on the reverse. On the reverse side, each form contains an identical set of terms and conditions, including provisions that state: 1. Actions for breach of contract damages must be brought “within one year after the cause of action has occurred” (¶ 1). 2. Remedies under Casting’s express warranties are limited to repair, replacement or credit, at Casting’s option (1112). 3. Casting must be notified of warranty claims within 30 days of shipment (id.). 4. Casting’s express warranty “IS EXPRESSLY IN LIEU OF ALL OTHER WARRANTIES EXPRESSED OR IMPLIED, INCLUDING THE WARRANTIES OF MERCHANTABILITY AND FITNESS FOR USE ...” (id.). If it were established that Gulfco had agreed to abide by Casting’s terms, a goodly part of Gulfco’s counterclaims would be mortally wounded. Unfortunately for Quaker-Consolidated, that issue too is in dispute. Quaker-Consolidated contend (1) the contracts between Gulfco and Casting were formed when Gulfco orally accepted Casting’s price quote and (2) the terms of the price quote, confirmed by Casting’s order acknowledgement, control the transaction (Q-C S.J. Mem. 22-25). Gulfco responds that Quaker-Consolidated have judicially admitted that Gulfco’s purchase orders are the effective offers in the case, and Gulfco also says Casting’s price quote is legally deficient as an offer (G S.J. Mem. 85-88 and cases cited there). Gulfco then explains how its purchase order preserves all its rights and warranties (see G Ex. 74 1116) and also “expressly limits acceptance to the terms and conditions stated herein and on reverse hereof” (G Ex. 74). In their turn Quaker-Consolidated reply that the Casting terms control because Gulfco placed phone orders responsive to Casting’s price quotes, voicing no objection to Casting’s terms (Q-C S.J. Mem. 3-9). Casting promptly sent its written order acknowledgement, and Gulfco's written purchase orders arrived many weeks later (id; see also Stephanie Heuer (“Heuer”) Aff. 117). This Court need not wade through the entire maze of arguments and counterarguments to find the material factual dispute that defeats the Quaker-Consolidated motion. On the scenario involved here, it is enough simply to look at the conflicting testimony presented by a single witness: Gulfco’s purchasing manager Wagner. Quaker-Consolidated present evidence that Wagner believed Casting’s terms controlled and that, in placing the telephone orders, he never objected to Casting’s terms (Wagner Aff. 2 118). However, Gulf-co counters with (1) deposition testimony by Wagner that he believed Casting was accepting Gulfco’s terms and that Gulfco objected to everyone’s terms but its own (Wagner Dep. 31-32) and (2) the third Wagner affidavit (see n. 20), which directly contradicts his earlier affidavit by saying it was not his understanding that Casting’s terms controlled (Wagner Aff. 3 ¶ 10). Although Wagner states he doesn’t remember the specifics of his telephone order conversations, he says his routine practice was (1) never to agree to a vendor’s terms from a price quote and (2) to inform vendors the order would be confirmed by Gulf-co’s written purchase order (id If 7). Wagner also explains that Gulfco’s purchases came in roughly two waves. In November and December 1981 he placed phone orders for one month’s deliveries of 33 parts (for which Gulfco later sent backdated purchase orders) (id ¶ 6). In February 1982 he issued a second set of purchase orders for monthly deliveries of the various parts (id 119; see also G S.J. Mem. 10). Casting confirmed those orders by returning the acknowledgement copy of Gulf-co’s purchase order form as well as by sending its own order acknowledgement (id). If this were the trial stage of the case, the internal conflicts in the Wagner evidence as to whether Gulfco ever acceded to Casting’s terms would have to be resolved. But for now the pro-Gulfco version of his statements must be accepted and the pro-Quaker-Consolidated version must be ignored. That being so, the situation is one of a so-called “battle of the forms” governed by UCC § 2-207. Each of Gulfco’s and Casting’s forms states quite clearly its objection to additional terms proposed by the other (G Ex. 74, Q-C Ex. K). Under UCC § 2-207(2)(c) those statements suffice to keep the deviant terms from the contract. Gulfco’s order form also states that it limits acceptance to its own terms and conditions, which also operates to reject Casting’s additional terms (UCC § 2-207(2)(a)). That same conclusion is compelled by the fact that Casting’s additional terms would constitute material alterations under UCC § 2-207(2)(b) (see, e.g., Album Graphics, Inc. v. Beatrice Foods Co., 87 Ill.App.3d 338, 347, 42 Ill.Dec. 332, 339, 408 N.E.2d 1041, 1048 (1st Dist.1980)). Gulfco and Quaker-Consolidated are therefore left to the result defined by UCC § 2-207(3): In such case the terms of the particular contract consist of those terms on which the writings of the parties agree, together with any supplementary terms incorporated under any other provisions of this Act. And that means Gulfco holds on, for the time being, to the standard remedies, notification requirements and limitations on actions found in the UCC. Implied Warranties Quaker-Consolidated argue implied warranties of merchantability and fitness for a particular purpose do not apply to the Gulfco transaction for reasons over and above the express disclaimer in Casting’s documents. No implied warranties arise from defects that an examination of samples should have revealed (UCC § 2-316(3)(b); Michael-Regan Co. v. Lindell, 527 F.2d 653, 661 (9th Cir.1975)). Q-C S.J. Mem. 16-18 points to Gulfco’s approval of samples that allegedly contained dimensional variations from specifications and surface pitting problems. Once again that is not enough for summary judgment. First, this opinion has already held Gulf-co has raised a factual issue as to whether it waived the stem adaptor cross-holes problem — the only dimensional defect Gulf-co has raised (G SJ. Mem. 72). Quaker-Consolidated have submitted no evidence that Gulfco should have discovered that problem during its inspection of samples (G SJ. Mem. 95-96). Second, Gulfco contests waiver of the surface quality problems on sample approval. Gulfco engineer Burrows acknowledges that a pitting problem was identified when samples were inspected, but he says Gulfco approved samples conditioned on Casting’s correcting the problem (Burrows Dep. 79, 82; see also G Ex. 39 (Casting’s sample approval form)). Once again this Court does not weigh the parties’ comparative likelihoods of success. Gulfco has offered enough to avert summary judgment on sample-approval grounds. Quaker-Consolidated also contend no implied warranty of fitness for a particular purpose arises when a seller constructs a product according to the buyer’s explicit design specifications (see Lesnefsky v. Fischer & Porter Co., 527 F.Supp. 951, 956-57 (E.D.Pa.1981)). But there is no suggestion here that Gulfco was the one that designated the investment casting technique, let alone the manner in which it was practiced by Casting to produce the type of product Gulfco needed (G S J. Mem. 98-99). Casting rather told Gulfco it was able to produce a fit product for Gulfco’s needs through investment casting (see Zugehar Dep. 44). Nor can Quaker-Consolidated rely on Gulfco’s never having revealed the entire valve design (Q-C R.Mem. 39-40). Casting knew the components were to be incorporated into Gulfco’s valves (Zugehar Dep. 47), and it was not otherwise kept in the dark about how the parts were to be used. Because Gulfco arguably relied on Casting’s assurances that its production technique could produce a fit part for Gulfco’s valves, an implied warranty of fitness for a particular purpose is not precluded as a matter of law. Gulfco may well have a long road to travel to show Casting’s procedure was itself unfit, but Gulfco has the opportunity to try. One final threshold issue as to any potential warranty liability must be addressed. Q-C S.J. Mem. 27 n. 14 claims there is no privity of contract between Gulfco and Consolidated as to the goods delivered in 1984 and between Gulfco and Quaker for the goods delivered before Quaker’s purchase of Casting in 1983. On that theory each party would be immune from warranty liability for part of Gulfco’s claims as a matter of law (see Spiegel v. Sharp Electronics Corp., 125 Ill.App.3d 897, 899, 81 Ill.Dec. 238, 240-41, 466 N.E.2d 1040, 1042-43 (1st Dist.1984)). But the underlying premise is flawed as to each. As for Consolidated, as one of the original parties to the contract with Gulfco it retains responsibility for any warranty obligations under the 1984-86 purchase orders. Its assignment of the obligation to Quaker does not end its own liability (see UCC § 2-210(1); Tarter v. MonArk Boat Co., 430 F.Supp. 1290, 1293 (E.D.Mo.1977), aff'd, 574 F.2d 984 (8th Cir.1978)). Quaker-Consolidated have offered no evidence that Gulfco joined in a novation with Quaker and Consolidated so as to relinquish its rights against Consolidated (Tarter, 430 F.Supp. at 1293). As for Quaker, normally it would not be liable for goods sold by Casting before the change of ownership. However, the sale of assets agreement between Quaker and Consolidated includes a provision under which Quaker (G Ex. 59 § 9.4): agrees to provide ... service, repair and replacement as required for all products manufactured and sold or distributed by [Casting] prior to the Accounting Date____ Notwithstanding the provisions of this section, [Quaker] does not assume any of Consolidated’s warranty liabilities or obligations to third parties for property damage or personal injuries in relation to [Casting’s] manufactured products sold prior to the effective date____ Thus the relevant questions are (1) whether Gulfco’s present claim is one for “service, repair [or] replacement as required for ... products” that had been sold by Casting and (2) if so, whether Gulfco is a third-party beneficiary of the commitment by which Quaker undertook those obligations. Because the parties have not dealt with the issues in those terms, this Court cannot now conclude whether Quaker is immune from warranty liability for the earlier Casting products as a matter of law. Gulfco’s Acceptance of the Parts Quaker-Consolidated argue at length that Gulfco has accepted the parts in issue and then failed to revoke its acceptance (Q-C S.J. Mem. 28-33; Q-C S.J. 12 Mem. 10-25). G S.J. Mem. 74-83 asserts with equal vehemence that it has not accepted the goods. On that score Quaker-Consolidated prevail, for Gulfco has failed to offer evidence it ever gave Quaker or Consolidated adequate notice of the rejection or revocation of acceptance of the goods. Under UCC § 2-602 a buyer must notify its seller of its rejection of allegedly nonconforming goods. Comment 1 to that section says: A tender or delivery of goods made pursuant to a contract of sale, even though wholly non-conforming, requires affirmative action by the buyer to avoid acceptance. See also Presto Manufacturing Co. v. Formetal Engineering Co., 46 Ill.App.3d 7, 14, 4 Ill.Dec. 574, 578, 360 N.E.2d 510, 514 (1st Dist.1977) (rejection must come “within a reasonable time and seasonably notify [the seller] to that effect”). In like manner, a buyer must also notify its seller if it seeks to revoke its earlier acceptance of any goods (Solar Kinetics Corp. v. Joseph T. Ryerson & Son, Inc., 488 F.Supp. 1237, 1249 (D.Conn.1980)). Revocation is not effective until the buyer has notified the seller (UCC § 2-608(2)). Notification of rejection or revocation is essential to preserve a buyer’s right to refuse payment for non-conforming goods or to recoup any payment already made. Once the buyer is deemed to have accepted the goods it is limited to an action for damages for any non-conformity (UCC § 2-607(2)), a remedy that may well be less attractive to a purchaser. Gulfco contends it exercised its right of rejection, or at least its revocation of acceptance, as it discovered the defects in the parts and as Casting said it no longer intended to cure defects as they were discovered (G S.J. Mem. 83). However, Gulfco has not substantiated that claim in evidentiary terms. It points to the parts it returned to Casting periodically with NonConforming Material Reports (G 12(e) Response ¶¶ 20-22). But Gulfco admits it reached appropriate agreement with Casting as to all the parts so returned (id. 1f 22(e)). It can cite to no notification to Casting that it desired a blanket rejection of the goods it now claims are defective. Only one kind of document authored by Gulfco might even arguably constitute the required notice: the pleadings it has filed in this action. Even brief analysis, however, demonstrates they will not suffice for that purpose. As noted earlier in this opinion, Gulfco’s original counterclaims against Quaker and cross-claims against Consolidated state three claims for breach of warranties. Gulfco’s sole statement bearing on rejection or revocation is in its Counterclaim 18, repeated at its Cross-claim ¶ 9, in each of which it “tenders return” of the parts it has on hand. Each of those, however, is part of the general background allegations in Gulfco’s pleadings. Every specific count óf the counterclaims and cross-claims asserts the right to damages based on breaches of warranty — nowhere does Gulf-co assert a right of rejection or revocation to recoup all monies paid to Quaker-Consolidated for the allegedly defective parts. It is true that Gulfco’s amended answer filed in November 1985, which added the chemical, mechanical and certification problems to the list of asserted defects, did contain a statement focusing directly on the issue of rejection or revocation. Counterclaim Count IV ¶ 4 states: This lack of certification is a material breach constituting grounds for rejection of the valve components on hand, revocation of acceptance of any previously accepted components, and grounds for cancellation of any obligation which may otherwise exist to accept and pay for additional parts from Quaker Alloy. Even apart from its untimeliness as the required notice, that single statement— asserted only against Quaker and referring only to the certification problem — plainly does not serve as a total rejection or revocation of Gulfco’s acceptance of the Casting parts. It cannot be read as having put Quaker-Consolidated on notice that Gulfco claimed the right to return the disputed goods in toto rather than asserting warranty damages for the diminished value of the Goods. Even though the question of the adequacy of such notice is usually a question of fact inappropriate for summary judgment (see Boysen v. Antioch Sheet Metal, Inc., 16 Ill.App.3d 331, 332, 306 N.E.2d 69, 71 (2d Dist.1974)), any claimed notice of rejection or revocation via Gulfco’s pleadings would be insufficient as a matter of law. Accordingly Gulfco is limited to its assertion of a right to damages for any non-conformity in the Casting parts and has waived its right to reject the goods completely. Notice of Breach To maintain even its breach of warranty claims, Gulfco must establish its timely notification of Quaker-Consolidated as to defects in the goods and its claim of breach (Wagmeister v. A.H. Robins Co., 64 Ill.App.3d 964, 966, 21 Ill.Dec. 729, 731, 382 N.E.2d 23, 25 (1st Dist.1978); see also UCC § 2-607(3)(a)). As with the issue of rejection or revocation, Gulfco has not said just when and how it notified the other parties of its belief that a breach of contract had occurred. But unlike the previous issue, Gulfco’s claims as to some (though not all) of the purported defects survive — at least for now — through the filing of its counterclaims and cross-claims in this action. As with all too many issues on the current motions, the litigants have offered confused and conflicting analyses of the proper focus on the notice-of-breach issue. They resemble nothing so much as the proverbial ships that pass in the night: 1. Quaker-Consolidated argue (a) Gulfco gave no notice of breach until it filed its counterclaims and cross-claims here, (b) such notice via claims in litigation does not satisfy UCC requirements and (c) in any event, Gulfco should have uncovered the claimed defects sooner. 2. Gulfco maintains (a) it gave plenty of notice to Casting that the goods were defective and (b) the parties are really fighting over the timing of Gulfco’s discovery of the defects, which it claims was more than reasonable. To resolve those disparate approaches, this Court looks to UCC 2-607(3)(a): [T]he buyer must within a reasonable time after he discovers or should have discovered any breach notify the seller of breach or be barred from any remedy.... Timely notice of breach is designed to foreclose claims that a buyer would later assert in bad faith (UCC § 2-607 Comment 4). As for the substance of such notice, Comment 4 goes on to explain: The content of the notification need merely be sufficient to let the seller know that the transaction is still troublesome and must be watched____ The notification which saves the buyer’s rights under this Article need only be such as informs the seller that the transaction is claimed to involve a breach, and thus opens the way for normal settlement through negotiation. Notice of breach must, of course, go beyond merely stating a potential problem with the goods (see Eastern Air Lines, Inc. v. McDonnell Douglas Corp., 532 F.2d 957, 971-72 (5th Cir.1976)). As the UCC § 2-607(3)(a) statement of a “reasonableness” standard suggests, the timeliness (like the adequacy) of notice is a question of fact normally left to the ultimate factfinder (see Eastern Air Lines, 532 F.2d at 973). Summary judgment on that issue is appropriate only when the sole reasonable inference is that the notice was unreasonably tardy (see Goldstein v. G.D. Searle & Co., 62 Ill.App.3d 344, 350, 19 Ill.Dec. 208, 213, 378 N.E.2d 1083, 1088 (1st Dist.1978)). In that respect, Gulfco’s breach of warranty claims may be viewed as falling into two categories: 1. the existence of defects in the parts themselves (giving rise to breaches either of express warranties as to the required specifications or of implied warranties of merchantability or fitness); or 2. Casting’s refusal to accept the return of defective parts when discovered by Gulfco during final production. Because the timeliness of notice may obviously differ as between those categories, they must be considered separately. Indeed, the first type of claim (the existence of defects) must itself be viewed as divisible, because the asserted flaws in the parts emerged at different times. Hence this opinion will examine those claims defect by defect, to see whether Gulfco gave notice of breach in an adequate manner and within a reasonable time from when it discovered or should have discovered each defect. 1. Surface Pitting As discussed earlier in this opinion, Gulfco says it did not discover the surface pitting problem on the GO gates and seats and the G2B gates until final machining. Quaker-Consolidated insist Gulfco could have, and in fact should have, discovered any surface pitting problem at or near the time of receipt of the parts, instead of waiting until it took parts from inventory for final use (Q-C S J. Mem. 28-29). But Gulfco has proffered evidence that it was acceptable practice in the foundry industry for buyers to return parts to their suppliers for defects uncovered upon use of those parts, rather than on their receipt (see Robert Cunningham (“Cunningham”) Aff. TMI23). Casting’s Warren Nord (“Nord”) also acknowledged in a April 5, 1984 memorandum that it was normal practice to accept returns of defective parts for problems uncovered in final machining of the parts (G Ex. 50). Even so, Gulfco must fail on its counterclaim and crossclaim for the surface pitting because it gave no effective notice of a claimed warranty breach in that respect until it filed those pleadings in this case. In fact, its memorandum opposing summary judgment does not purport to identify any earlier notice — but to obviate any argument that Gulfco’s arguments have done so inferentially, this opinion will explore any potential sources of such notification. First, Gulfco’s returns to Casting in 1982 and 1984 of some gates and seats because of unacceptable pitting do not satisfy the notice requirement. Those returns and contemporaneous discussions between the parties about the pitting problem cannot be characterized as a breach-of-warranty notice. Both parties recognize that some percentage of nonconforming parts is inherent to the manufacturing process— something to be expected in the industry. For that reason they had, and followed, a regular procedure for the return to Casting of such unacceptable parts. Gulfco has not even suggested the percentage of such returns was of a magnitude to constitute, in and of itself, a breach of warranty. That leads to the second step in the inquiry: whether Gulfco’s actions after August 1984 — when Casting announced it would no longer accept returns because they were untimely — served as the required timely notice of breach. Once that happened — once Gulfco knew a dispute existed over its right to return defective parts to Casting long after original delivery — its own duty of timely notice obligated it to apprise Casting that the assertedly defective parts, together with Casting’s refusal to take back or otherwise compensate Gulf-co for the defects, constituted a breach of warranty. But Gulfco offers no evidence whatever of any such notice until it filed its counterclaims and cross-claims in July 1985 —a full 11 months after Casting had repudiated any obligation to accept further returns. To be sure, Gulfco contends (1) it was not until December 1984 that it was forced to cancel all further deliveries and (2) negotiations continued even into early 1985 (until Quaker filed suit in February). Those assertions are really not responsive to Casting’s unconditional turndown of further returns back in August 1984. But even if Gulfco’s scenario is taken at face value, it still waited fully five months after it was actually sued (from February to July 1985) before it apprised Quaker-Consolidated that it was claiming breach of warranties. That period of delay (let alone the 11-month lapse after August 1984) was unreasonable as a matter of law and forecloses Gulfco’s claims related to the surface pitting (see Klockner, Inc. v. Federal Wire Mill Corp., 663 F.2d 1370, 1378-79 (7th Cir.1981)). No merchant such as Gulfco can sit silent for many months after a seller has demanded payment, then assert a counterclaim for damages. Nor, for that matter, can Gulfco’s December 1984 letter itself constitute the necessary notice of a breach of warranty (G. Ex. 67). That letter merely told Casting that Gulfco would take no further deliveries because of the dispute over how the parties would handle defective castings. It was not a commercially reasonable notice to Casting that Gulfco considered Casting to have breached warranties as to previously delivered goods. Although UCC § 2-607(3)(a) mandates no precise content of notice (see Comment 4), merchants such as Gulfco are held to a higher standard than the average consumer (Eastern Air Lines, 532 F.2d at 976-77). All Gulfco’s responsive arguments as to notice of breach are thus clearly wanting. It must be concluded, then, that Gulfco’s notice of breach of a warranty as to surface pitting was untimely. Moreover, the unreasonableness of such notice is independently buttressed by the form it took when it finally came — via Gulfco’s pleadings in this litigation. Q-C S.J. Mem. 35-36 urges such defensive pleadings do not satisfy UCC § 2-607(3)(a). Although there is no inherent reason that negotiation and settlement (the purposes specified in Comment 4 to that section) cannot also take place after suit is filed, the case law supports the Quaker-Consolidated position. Armco Steel Corp. v. Isaacson Structural Steel Co., 611 P.2d 507, 512-13 (Alaska 1980) reviewed that case law, plus the commentators’ uniform view of UCC § 2-607(3)(a), and held the filing of a complaint was inadequate notice. Though no reported Illinois case has dealt with that issue in the context of a dispute between merchants, two decisions (Goldstein, 62 Ill.App.3d at 350, 19 Ill.Dec. at 213, 378 N.E.2d at 1088 and Owens v. Glendale Optical Co., 590 F.Supp. 32, 36 (S.D.Ill.1984)) have picked up on a distinction recognized by Armco (611 P.2d at 512-13 n. 13): They have contrasted the merchants' situation with that of retail consumers, who operate under a more relaxed notice requirement, and have held the latter can give adequate notification of breach through litigation filings. By clear implication that analysis comports with the Armco holding that merchants, being held to a higher standard, must give notice of breach outside of their claims or counterclaims in litigation. This Court concludes Armco would be persuasive to either the Illinois or the Oklahoma Supreme Court— one of which would set the controlling standard in this diversity action (see “Choice of Law”). 2. Stem Adaptors As already discussed, for present purposes this Court has accepted Gulfco’s position that the stem adaptor cross-hole problem was not waived on sample review but was discovered months later after customer complaints (see G SJ. Mem. 35). Quaker-Consolidated have submitted evidence that the problem, once discovered, was corrected simply and Gulfco was able to use the parts (Stewart Stmt. 20; Leonard Dep. 67-68; Omar Ashraf Aff. 117). Though Gulfco challenges how easily the cross-hole problem was corrected (G S.J. Mem. 35), it has presented no evidence that it ever raised the stem adaptor problem as a defect with Casting until this litigation. If Gulfco really believed the problem was a potential source of contract breach, it could have raised the issue with Casting long before the filing of claims in this action. There is also no evidence that Gulf-co was relying on Casting’s willingness until 1984 to accept returns because of stemadaptor difficulties at any time. On the undisputed evidence, Gulfco’s notice of the stem adaptor problem was unreasonably belated. It has therefore waived its right to the cross-hole problem as a breach of warranty. 3. Nonconforming Chemical and Physical Properties; Improper Certific