Contracts Keyed to Farnsworth
United States v. Seacoast Gas Co
Facts
The Plaintiff and the Defendant entered into an agreement under which the Defendant would supply a federal housing project with gas. The Defendant thereafter anticipatorily breached the contract by notifying the Plaintiff in writing that it was canceling the contract due to the Plaintiff’s breach. The Plaintiff responded in writing that it did not recognize any right of the Defendant to cancel the agreement and advertised for bids on the contract to ensure continuous supply in the event that the Defendant continued to refuse performance. The Plaintiff received a low bid and notified the Defendant that the Defendant had three days to retract its repudiation, or the low bid would be accepted. The Defendant refused and the low bid was accepted. Before the signing of the new contract, though, the Defendant decided that it had no right to cancel the contract and sought to rescind its repudiation. The Plaintiff refused and initiated this action.
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