Admiral Plastics Corp. v. Trueblood, Inc.

436 F.2d 1335

 

RULE:

In Ohio, mutual delinquency gives rise to the presumption of mutual assent to a rescission.

FACTS:

The purchaser contracted with the manufacturer for the design and construction of injection blow mold machines that were to be used in his plastics' business. The manufacturer had never built such a machine, but was willing to do so with the purchaser's specifications. The machines were not forthcoming, and the purchaser brought a breach of contract action. The district court found that there was a valid contract under Ohio Rev. Code Ann. § 1302.07, but that both parties breached the agreement by their failure to act in good faith and to cooperate in the performance of the contract. The mutual breach rendered the contract void, and the district court awarded a judgment in the amount of the down payment.

ISSUE:

Did mutual rescission occur when the parties' failed to cooperate and failed to perform tasks called for by the contract within a reasonable time?

ANSWER:

Yes.

CONCLUSION:

The mutual breach rendered the contract void, and the district court awarded a judgment in the amount of the down payment. The court held that the findings adopted by the district court were supported by substantial evidence and were not clearly erroneous. There was further no error in the dismissal of the counterclaim. The court found that Ohio law presumed recission after a mutual breach of contract, and it further permitted a refund of the down payment in cases of mutual recission. Because the purchaser received no benefits under the contract, it was entitled to the refund.

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