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Law School Case Brief

Laredo Hides Co. v. H & H Meat Prods. Co. - 513 S.W.2d 210 (Tex. Civ. App. 1974)

Rule:

Ordinarily, time is not of the essence of a contract, and failure to perform on the exact date agreed upon is not such a breach that justifies a cancellation. In order to make time of the essence of a contract, it must so provide by express stipulation, or there must be something in the nature of the subject matter, or connected with the purpose, of the contract and the circumstances surrounding it which makes it apparent that the parties intended that the contract be performed at or within the time specified. Any intention to make time of the essence in the performance of a contract must be clearly manifested from a consideration of the contract as a whole, and when that intention is not made clear by the language in the contract itself, the surrounding circumstances may be taken into consideration in determining that question.

Facts:

Plaintiff buyer brought an action for breach of contract against defendant supplier. Plaintiff buyer and defendant supplier had a contract for plaintiff to purchase cattle hides. The normal transfer procedure was that plaintiff would send the payment with the truck to pick up the merchandise. There was a delay in payment, which prompted defendant to terminate the contract. The trial court found for defendant, and plaintiff challenged the ruling.

Issue:

Does plaintiff buyer's late payment justify defendant supplier's termination of the contract?

Answer:

No.

Conclusion:

The court reversed the trial court's take-nothing judgment in favor of defendant supplier in plaintiff buyer's breach of contract action. Without language in the contract to show that timely payment was of the essence and with defendant's waiver of such timely payment, plaintiff did not breach the purchasing contract when it made a late payment. Also, the court found that because the contract was unambiguous, no extrinsic evidence was allowed.

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