Tuesday, December 3, 2013

Lane Enterprises, Inc. v. L.B. Foster Co. case brief

Lane Enterprises, Inc. v. L.B. Foster Co. case brief summary
700 A.2d 465 (1997)


CASE SYNOPSIS
Appellant manufacturer sought review of an order of the Court of Common Pleas of Bedford County (Pennsylvania), which ruled in favor of appellee coating contractor on appellee's counterclaim for a percentage of the contract price for various bridge components used in the construction of a bridge.

CASE FACTS
Appellant manufacturer entered into a contract with appellee coating contractor to provide steel bridge components for protective coatings. The buyer did not approve appellee's initial coatings and appellant was required to subcontract that work. Appellant demanded adequate assurances from appellee whether it intended to perform the second stage of the contract, while appellee demanded payment for stage one less the amount paid to the subcontractor. Appellant hired another contractor to complete the contract and brought an action against appellee. Appellee brought a counterclaim for payment. The trial court ruled in favor of appellee, finding that appellant breached the contract by failing to make payment for the first stage.

DISCUSSION

  • On review, the court reversed and remanded with instructions. 
  • The court found that appellant had the right to request adequate assurances that the contract would be performed, and lacking assurances, hire another contractor to complete the contract. 
  • The court found that appellant's good faith withholding of a small percentage of the contract price was not a material breach that would have excused appellee from performing its contractual obligations.

CONCLUSION
The court reversed the order of the trial court and remanded the case with instructions to enter judgment in favor of appellant manufacturer because appellant manufacturer had a right to demand adequate assurances from appellee coating contractor, and when these were not provided, to hire a second contractor to finish the contract. Additional sums paid to the second contractor were appellant's measure of damages for the anticipatory breach.

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