7
When a customer submitted a purchase order and full payment
(including for shipping), Eagle ordered the house kit from
Timberline. Ninety percent of Eagle's expenses occurred from 30
days before an order was placed to 30 days after Timberline
delivered the house kit to the customer. Timberline usually
delivered the house kit 4 to 6 weeks after a customer placed an
order.
c. Extension of Purchase Agreements and Refunds of
Deposits
Eagle's business practices differed from the purchase
agreement in two ways, primarily to retain goodwill from
potential customers. First, Eagle refunded about $136,000 in
front and back deposits from 1988 to 1992. Second, if Eagle did
not receive full payment in 75 days, Eagle issued a change order
in which Eagle agreed to apply the payments to a purchase of a
panelized house during the next 7 years. If a customer placed an
order for a panelized house kit under a 7-year change order,
Eagle charged the customer the retail price prevailing when the
order was placed.
4. Eagle's Payments to Timberline
Timberline billed Eagle for house kits and was paid when the
customer paid Eagle.
Ninety percent of Eagle's house sales were financed by
letters of credit. When a customer financed a sale by a letter
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Last modified: May 25, 2011