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Contracts Keyed to Templin
Coast Trading Co. v. Cudahy Co.
Citation:
592 F.2d 1074 (9th Cir. 1979)Facts
Coast Trading Company had supplied feed grains to Cudahy’s feedlot since 1954. Between February 28 and April 2, 1974, Robin Van Woerden, the general manager of Cudahy’s feedlot, executed 14 contracts with Coast for the purchase of over 10,000 tons of barley. Due to limited storage capacity at the feedlot, Coast arranged for 1,500 tons to be stored in Spokane. In late May 1974, Cudahy’s home office discovered the extent of these purchases and subsequently repudiated all contracts for which delivery had not been made, claiming Van Woerden lacked authority to bind the company.
Between June 11 and June 19, 1974, Coast allegedly resold over 10,000 tons of barley to eight purchasers and used those sales to calculate damages. A significant portion (5,293 tons) was “sold” to Montana Merchandisers, Inc., but this transaction was effectively reversed nine days later when Coast purchased the same amount back at only a slightly higher price. The district court found that Van Woerden had apparent authority only for the February 28 contracts, and that Coast had failed to give reasonable notice for some of the resales.
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