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Contracts Keyed to Templin
El Fredo Pizza, Inc. v. Roto-Flex Oven Co.
Citation:
199 Neb. 697, 261 N.W.2d 358 (Neb. 1978)Facts
Dennis Walker, president and principal owner of several El Fredo Pizza restaurants in Omaha, Nebraska, planned to open a new restaurant location on Center Street in 1973. Based on the positive experience of his business partner Fred Lennon with a Roto-Flex oven in Sioux City, Walker contracted with Roto-Flex to purchase a “Pizza Oven Special” for $4,802.60. The contract was signed by Walker as president of El Fredo Pizza, Inc., as Center Street Pizza, Inc. was not yet officially incorporated, but was later orally assigned to Center Street Pizza, which paid for the oven. After installation on October 22, 1973, the oven immediately exhibited problems with uneven heating, requiring a complicated two-step baking process, constant monitoring, and causing delays in serving customers. Despite Roto-Flex’s attempts to fix the oven in February 1974, problems persisted until Center Street Pizza replaced it in November 1974. Business records showed that labor costs were 27-28% of sales during the Roto-Flex period but dropped to the industry standard of 21-22% after replacement. Additionally, sales increased by approximately 20% after the oven was replaced.
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