Commercial Law Keyed to Lopucki
United States v. Wegematic Corp
The Federal Reserve Board invited five electronics manufacturers to submit proposals for an electronic digital computing system and stressed early delivery as a consideration in determining the Board’s choice. Defendant submitted a proposal for the sale or lease of a new computer system and delivery was offered nine months from the date the contract was received. The Board approved Defendant’s proposal and delivery was set for June 30, 1957. The agreement provide that in the event the Defendant failed to comply the Board may procure the services from other sources and hold the Defendant responsible for an excess costs. The first warning by Defendant was that they informed the Board that delivery would be later than planned because they were redesigning the system, which greatly improved the product. Another request for a delay followed this one. The Board considered the requests but denied an extension. Then Defendant sent a notice to the Board that it was impracticable to del iver the computer system at that time. The Board then advised Defendant that it intended to press claims for damages and this suit began. The district court awarded the Board liquidated damages, the increase in cost of a replacement machine, and preparatory expenses. The Defendant’s defense is that delivery was made impossible by basic engineering difficulties whose correcting would have taken between one and two years and would have cost millions with success not certain.
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