Cherwell-Ralli, Inc. v. Rytman Grain Co.

Facts

In July 1974, the parties entered into an installment contract for the sale of Cherco Meal and C-R-T Meal products whereby Plaintiff would ship the product with weekly instructions from the buyer, Defendant. From the beginning of the contract, Defendant fell behind on payments but Plaintiff continued to deliver the product until April 1975. On April 15, 1975, due to Defendant’s growing concerns that Plaintiff may stop making deliveries, the presidents of each company conducted a teleconference where Plaintiff assured Defendant it would continue its deliveries, so long as it received payment. In light of this reassurance, Defendant issued a check to pay for its arrears up until March 31, 1975. A few days after the meeting between the companies, Defendant was told by a third-party delivery driver that Plaintiff was planning to stop deliveries. In light of this information, on April 23, 1975, Defendant canceled the check it had sent out to Plaintiff on April 15. After the stopped payment, the parties corresponded by letter with Plaintiff demanding payment for deliveries it had made and Defendant demanding adequate assurance of future deliveries. Soon after this impasse occurred between the parties, Plaintiff was forced to close its plant due to excess product it could not unload. Plaintiff then sued Defendant for breach of contract due to nonpayment.