Sunday, December 1, 2013

Feld v. Henry S. Levy & Sons, Inc. case brief

Feld v. Henry S. Levy & Sons, Inc. case brief summary
335 N.E.2d 320 (N.Y. 1975)

Both parties appealed an order of the Appellate Division of the Supreme Court in the Second Judicial Department, affirming an order of the trial court, that denied plaintiff company's motion for summary judgment, and defendant supplier's request to dismiss plaintiff's breach of contract action.

Plaintiff operated a wholesale bread baking business. The parties entered into a written contract in which defendant agreed to sell and plaintiff agreed to purchase all the bread crumbs produced by defendant. There was a cancellation clause in the contract that required six months notice to the other party. After making the agreement, a substantial quantity of bread crumbs was sold by defendant to plaintiff, but defendant stopped its bread crumb production because the contract was unprofitable. Plaintiff sued to compel defendant to complete the contract.

The trial court ruled that economic feasibility was not a factor that justified cancellation of the contract without notice.

The appellate courts agreed, finding that good faith required notice of cancellation before cessation of production in an output contract.

The court affirmed the order.

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