Contracts Keyed to Calamari
Austin Instrument, Inc. v. Loral Corp.
ProfessorMelissa A. Hale
CaseCast™ – "What you need to know"
Facts
The Defendant, Loral Corp (Defendant), was awarded a Navy contract for the production of radar sets. The Plaintiff, Austin Instrument, Inc. (Plaintiff), was a subcontractor who manufactured precision gear components. When Defendant awarded Plaintiff a second subcontract, on the parts it had bid lowest, Plaintiff raised its prices on all forward and back orders of the gear components, and threatened to stop delivery if its prices were not paid. When Defendant could not find the same parts, ready to deliver, by another manufacturer, it was forced to pay the price increase, in order to meet the terms of its contract. Plaintiff brought suit for charges still due on a second contract and Defendant countered for the difference in prices. At the trial of this matter, Plaintiff was awarded the sum it sought in payment of the contract, and Defendant’s complaint against plaintiff was dismissed. Defendant appealed.
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