Timberland Products and Redland Co. signed the following agreement on May 1, 2010: "Timberland promises to sell andRedlandpromises to buy 7000 sections of redwood stockade fence at $30 per section. Each section is to be made of good quality split redwood poles and is to be 7 feet long and 6 feet high; 1000 sections are to be delivered by seller on or before June 1, 2010 and 1000 sections by the first day in each of the following six months.

EACH MONTHLY DELIVERY IS A SEPARATE CONTRACT.

The following conditions are to be met by this agreement:

1. Timberland is to give the buyer advance notice of the arrival time of each shipment.

2. Redwood is to pay for the sections delivered within ten days of delivery.

3. Timberland is to give the buyer the right to inspect each shipment before acceptance and to report all complaints within two days."

The first shipment of 1000 sections arrived on May 27th and Redwood sent its payment on June 5th. The second shipment did not arrive until July 5th. On the following day, Woody Scarlet, Redwood's president, telephoned Bob Jones, president of Timberland, complaining about the late delivery. Woody also stated, "The next delivery better be on time, or we'll cancel the next contract." The July shipment was in conformity and Timberland sent its payment on July 11th.

Timberland's August shipment arrived on the afternoon of August 1st. After the initial inspection the redwood poles were found to be 7 feet long and 6-1/4 feet high. However, Scarlet, away on vacation, did not complain about the deviation until August 7th, when he telephoned Bob Jones. During their conversation, Jones told Woody that Timberland could not replace the August shipment, but would allow a price adjustment. Woody refused Jones' offer. The next day, Woody sent Jones a telegram, stating that he was hereby canceling all future deliveries and returning the last shipment because of nonconformity. The May 1, 2010, agreement between Timberland and Redwood may best be interpreted as

Question 25Select one:

A.

a divisible contract.

B.

an installment contract.

C.

seven separate contracts.

D.

a requirements-output contract.