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Contracts Keyed to Farnsworth
Laredo Hides Co., Inc. v. H & H Meat Products Co., Inc
Facts
Plaintiff entered into a contract with Defendant to buy its entire cattle hide production during a specified period. A check for $9,000 was sent by Plaintiff but was delayed in the mail. Before it arrived, Defendant gave Plaintiff an ultimatum demanding payment within a few hours. When Plaintiff failed to meet the demand, Defendant notified Plaintiff that it considered this a breach justifying cancellation of the contract. The Court of Civil Appeals of Texas held, however, that Defendant’s actions were a breach by repudiation of the contract. In order to meet its requirements for hides, Plaintiff had to purchase them on the open market. The market price for hides had risen so sharply that Plaintiff incurred costs above the contract price of $142,254.48 plus incidentals of $3,448.95.
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