Question:
In October, 2003, Mountain Camo, Inc. entered into a contract with Wendall and Janet Mills in which Mountain Camo sold the Mills a number of items of "close-out inventory." According to the contract, payment for the goods was due on March 30, 2005. The Mills picked up the inventory personally in November, 2004, but put the goods straight into warehouse storage without inspecting them. The Mills made no payments on the goods and eventually returned them to Mountain Camo in May or early June, 2005. Mountain Camo sold the goods to another buyer for $45,000, and sued the Mills for $94,771.54, which is the difference between the $139,771.54 value of the goods and the $45,000 Montana Camo received for sale of the goods to a third party. The Mills argue that they were not in breach of contract because they had rejected the goods because of defects and odd sizing that would render the goods difficult to sell, and thus had returned them to Mountain Camo. How should the court rule, and why?