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Law School Case Brief

United States use of Crane Co. v. Progressive Enters., Inc. - 418 F. Supp. 662 (E.D. Va. 1976)

Rule:

The ability to modify a sales agreement is limited by the general U.C.C. requirement of good faith.

Facts:

This action was brought to recover the unpaid balance allegedly due for the purchase of a cast iron deaerator supplied by plaintiff Crane Company to defendant Progressive Enterprises, Inc. to be installed as part of defendant's contract with the United States.  The parties agree that the July 1, 1974 purchase order was an effective acceptance of Crane's offer to sell. However, apparently without protest to or discussion with Crane or its agent, Progressive agreed to the higher price and, on August 7, 1974, submitted a second purchase order for the machine, this time at $7350.  Thereafter, the machine was delivered and Progressive paid $5,550 and asserted the balance not to be due because the increased price was not a valid modification of the contract. 

Issue:

Does defendant’s acquiescence to the higher price in a purchase order modify the existing contract between the parties?

Answer:

Yes.

Conclusion:

The availability of equitable relief belies Progressive's claim that it had no available remedies if it desired to enforce the original terms.  Also, notification to Crane of the possible damages because of the threatened breach could have led to withdrawal of the requested increase.  Progressive did nothing to alert Crane to the possibility that it did not mean what it said. 

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