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Contracts Keyed to Fuller
Pittsburgh-Des Moines Steel Co. v. Brookhaven Manor Water Co.
Citation:
532 F.2d 572 (1976)Facts
On July 24, 1968, Pittsburgh-Des Moines Steel Company (PDM) submitted a proposal to Brookhaven Manor Water Company for constructing a one-million-gallon water tank for $175,000. The original proposal included progress payments, but at Brookhaven’s request, the payment terms were changed to require 100% payment within 30 days after tank testing and acceptance. Brookhaven accepted this revised proposal on November 26, 1968. Shortly after, PDM learned that Brookhaven was negotiating a loan with Diversified Finance Corporation. On January 3, 1969, PDM wrote to Diversified requesting that the $175,000 be held in escrow, stating they were “holding this order in abeyance” until such arrangement was made, despite no escrow provision in the contract. Later, in March 1969, PDM requested a personal guarantee from Brookhaven’s president, Irving Betke. Betke sent his personal financial statement but declined to provide a personal guarantee. PDM took no further steps toward performance. The water tank was never installed, though Brookhaven had completed the reinforced concrete foundation at a cost of $18,895. Brookhaven later developed alternative water sources and eventually sold all its assets to the City of Darien.
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