Why was the evidence provided by Fluormatic unacceptable? What conditions would the company have had to have met for its argument to be seen as acceptable to the court?

Fluormatic's defense in this case was not strong. What values would have led the company to choose to settle the matter with DIF Bank rather than try the issue in court?

For M6.6 M6.6 Assignment: Internet Assignment (Chapter 16) See Case 16-1 (Fluormatic Corporation case) of your text and answer the Critical Thinking and Ethical Decision Making question/s that follow. Note: some online research may prove helpful. Kubasek, N., Browne, M. N., Giampetro-Meyer, A., Barkacs, L., Herron, D., Williamson, C., & Dhooge, L. (2012). Dynamic Business Law [2e]. Retrieved May 23, 2016, from connect.mheducation.com DIF BANK DEUTSCHE INVESTITIONS FINANZ GMBH V. FLUORMATIC CORPORATION OF AMERICAU.S. DISTRICT COURT, NORTHERN DISTRICT OF ILLINOIS, EASTERN DIVISION 1991 U.S. Dist. LEXIS 520 FACTS: DIF Bank is a company organized under the laws of the Federal Republic of Germany and is engaged in the business of banking. Fluormatic is a Delaware corporation with its principal place of business in Villa Park, Illinois. Multimatic Maschinen GmbH & Co. is a company organized under the laws of the Federal Republic of Germany and engaged in the manufacture of dry-cleaning equipment. Fluormatic is in the business of distributing and servicing dry-cleaning equipment. Multimatic and Fluormatic are both owned by Mr. H. F. Gustav Koetter.

Between May 9, 1981, and July 11, 1986, Fluormatic regularly purchased dry-cleaning equipment from Multimatic. Fluormatic generally paid for the equipment either by promissory notes made payable to Multimatic in U.S. dollars or by endorsing drafts in deutsche marks drawn by Multimatic. Two promissory notes and six drafts are at controversy here. Multimatic received the notes and drafts from Fluormatic and discounted them to DIF Bank, which credited funds to Multimatic. DIF Bank presented the notes and drafts on their due dates, and payment was not made. DIF Bank gave Fluormatic notice of the dishonor, and the drafts were duly protested. DIF Bank brought a two-count complaint against Fluormatic for recovery on the instruments.

In the judge's words:

Fluormatic... argues that the drafts are not negotiable because they are not payable in a "sum certain" as required by paragraphs 3-104 and 3-106 of the Code. Ill. Rev. Stat. ch. 26, paras. 3-104 and 3-106 (1961). The drafts, while payable in German deutsche marks, do not specify an exchange rate. The failure to include an exchange rate, Fluormatic contends, requires the conclusion that the drafts are not payable in "a sum certain" as required under the Code.

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ISSUE: Is a draft negotiable if it is not payable in a sum certain?

REASONING: Section 3-107(2) of the UCC provides:

2) A promise or order to pay a sum stated in a foreign currency is for a sum certain in money and, unless a different medium of payment is specified in the instrument, may be satisfied by payment of that number of dollars which the stated foreign currency will purchase at the buying sight rate for that currency on the day on which the instrument is payable or, if payable on demand, on the day of demand. If such aninstrument specifies a foreign currency as the medium of payment the instrument is payable in that currency. [emphasis added]

DECISION AND REMEDY: The judge overruled Fluormatic's objection, finding for the plaintiff.

SIGNIFICANCE OF THE CASE: By basing its decision on the clear intent of Section 3-107(2), the court is avoiding a possible obstruction to foreign trade.