Pennsy Supply, Inc. v. Am. Ash Recycling Corp.

2006 PA Super 54, 895 A.2d 595

 

RULE:

A cause of action for breach of contract must be established by pleading: (1) the existence of a contract, including its essential terms, (2) a breach of a duty imposed by the contract and (3) resultant damages. While not every term of a contract must be stated in complete detail, every element must be specifically pleaded. Clarity is particularly important where an oral contract is alleged.

FACTS:

Pennsy was involved in a state project and was hired to do paving of driveways and a parking lot. It contracted with American Ash, who provided the mateiral for free. which was supplied. After the work was completed, the pavement cracked and Pennsy had to ultimately replace the materials (which turned out to be toxic waste) that were provided. Pennsy requested a reimbursement from the supplier for remediation work and disposal of the material to no avail, and thus filed a five count complaint. American Ash filed objections on all five counts.

The lower court dismissed the complaint concluding that there was no allegation of consideration to support the subcontractor's breach of contract claim. The case was appealed to the Superior Court of Pennsylvania.

ISSUE:

Was there consideration sufficient to find a breach of contract?

ANSWER:

Yes

CONCLUSION:

American Ash received a benefit in the transaction, when Pennsy hauled away the material for free, thus saving American Ash thousands of dollars in disposal costs. The Court quoted the Second Restatement of Contracts when they said, he bargain theory of consideration does not actually require that the parties bargain over the terms of the agreement. …According to Holmes, an influential advocate of the bargain theory, what is required [for consideration to exist] is that the promise and the consideration be in 'the relation of reciprocal conventional inducement, each for the other.' " The Court concluded with "...here, as explained above, the Complaint alleges facts which, if proven, would show the promise induced the detriment and the detriment induced the promise. This would be consideration."

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