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Contracts Keyed to Summers
Magnet Resources, Inc. v. Summit MRI, Inc.
Facts
Magnet Resources, Inc. (Plaintiff) provides preventive maintenance and emergency repair services on magnetic resonance imagers. Plaintiff agreed to provide its services to Summit MRI, Inc. (Defendant) for $120,000 for the first year of the contract, and $150,000 for each year thereafter. Payments were to be paid in advance on a monthly basis. Defendant’s monthly payments were frequently late and several of its checks were dishonored. On December 20, 1994, Defendant requested that Plaintiff provide services not covered under the contract. By that time Defendant owed Plaintiff $35,000. Plaintiff initially refused, but performed the work after Defendant promised to pay the outstanding balance by the end of that week. By December 27, 1994, Defendant had not paid any of its outstanding bills. Plaintiff refused Defendant’s request for services that day, and declared its services suspended until payments were made or an agreement was reached regarding payment. Defendant thereafter cancelled the contract. Plaintiff sued for breach of contract and was awarded $492,320. Defendant counterclaimed for breach of contract and was awarded $18,470. Both parties appealed.
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