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Contracts Keyed to Fuller
In Re Kellett Aircraft Corp.
Citation:
186 F.2d 197 (3d Cir. 1950)Facts
Kellett contracted to fabricate 5,000 shower cabinets at $13.18 each plus $3,331 for tooling costs for Amerform, who needed them to fulfill a government order with deliveries due in July-September 1946. On September 16, 1946, Kellett informed Amerform it could not perform. Amerform immediately contacted several companies and received an offer from Cutler at $18 per cabinet with immediate production capability, as Cutler already had the necessary tools and dies. Days later, Luscombe offered to make the cabinets at Kellett’s original price plus $500 for tooling, but could only begin production four weeks after receiving tools and dies from Kellett. After examining Luscombe’s facilities, Amerform awarded the contract to Cutler on September 27, 1946. Later, Amerform also awarded Luscombe contracts for other shower cabinets. The special master disallowed Amerform’s claim for the additional costs, finding that Amerform should have accepted Luscombe’s lower offer.
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