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Selland Pontiac-GMC, Inc. v. King - 384 N.W.2d 490 (Minn. Ct. App. 1986)

Rule:

Minn. Stat. § 336.2-615 (1984) provides: Except so far as a seller may have assumed a greater obligation and subject to the preceding section on substituted performance: (a) Delay in delivery or nondelivery in whole or part by a seller who complied with paragraphs (b) and (c) is not a breach of his duty under a contract for sale if performance as agreed has been made impracticable by the occurrence of a contingency the non-occurrence of which was a basic assumption on which the contract was made or by compliance in good faith with any applicable foreign or domestic governmental regulation or order whether or not it later proves to be invalid. (c) The seller must notify the buyer seasonably that there will be delay or nondelivery. Minn. Stat. § 336.2-615 (1984).

Facts:

Plaintiff buyer had contracted with defendant seller to purchase school bus bodies. The written agreement indicated that the school bus bodies were to be manufactured by a specific manufacturer. The agreement contained no escape clause excusing the seller's performance if his supplier failed. The manufacturer went into receivership and the bodies were never manufactured. After a one-day bench trial, the trial court granted judgment for the seller in the buyer's action for breach of contract. The buyer appealed the judgment of the state district cour, which denied his motion for a new trial and/or amended findings of fact and conclusions of law in ithe buyer's suit. 

Issue:

Did the trial court err in its decision that defendant seller did not breach the contract when the supplier ceased production?

Answer:

No

Conclusion:

Applying the clearly erroneous standard of review, the court affirmed the trial court's judgment. The court found that Minn. Stat. § 336.2-615 was properly applied by the trial court. The supplier had been specified in the contract and the trial court had found that the seller had given the buyer seasonable notice of delay and nondelivery. The court would not disturb the trial court's determination of that issue of fact. Notice of delay did not constitute notice of nondelivery. However, the record indicated that the buyer evaluated the information and acquiesced in the seller's evaluation of the situation. Although the seller did not ultimately advise the buyer of non-delivery, it was not necessary under the facts since the seller cancelled the contract before such notice could be given.

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