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Contracts Keyed to Kuney
Hope’s Architectural Products, Inc. v. Lundy’s Construction, Inc.
Citation:781 F. Supp. 711 (1991).
On June 13, 1988, Lundy’s entered into a construction contract to build an addition on Rushton Elementary School in the Shawnee Mission School District in Kansas. As such, Lundy’s obtained a public works bond to insure any outstanding debts relating to the project. The bond was held by Bank IV. On June 29, Hope’s contracted to manufacture 93 windows for the project. The price of the windows was $55,000 and delivery of the windows was due within 12-14 weeks after approval of the drawings. Hope’s received approval from Lundy’s on July 18 and, thus, delivery was due no later than October 24.
Hope’s production of the windows was delayed, but Hope’s made no request for an extension. On September 27, Lundy’s requested that installation of the windows begin on October 19 and be completed by October 26. Lundy’s wrote again on October 14 threatening to withhold damages if Hope’s did not meet the deadlines. Hope’s did not respond to the letter and the windows were not shipped from Hope’s plant in New York to Kansas City until October 28. Delivery to the construction site was then scheduled for November 4. On November 1, Lundy’s contacted Hope’s and threatened a possible back charge on the contract price for the late delivery. On November 2, Hope’s sent a letter informing Lundy’s it was suspending delivery of the windows until it was provided assurances that there would be no back charge. After not receiving these assurances, Hope’s demanded prepayment in the full amount prior to delivery. On November 7, Lundy’s terminated the contract. On February 15, 1989, Hope’s demanded payment from Bank IV on Lundy’s bond. Bank IV refused to issue payment.
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