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Contracts Keyed to Fuller
S.J. Groves & Sons Co. v. Warner Co.
Citation:
576 F.2d 524 (3d Cir. 1978)Facts
Groves was awarded a subcontract for concrete work on the Girard Point Bridge in Philadelphia and contracted with Warner to supply ready-mixed concrete at a rate of 40 cubic yards per hour at times specified by Groves. Warner’s performance was consistently poor, with frequent failures to deliver concrete according to schedule, causing Groves’ work to extend into overtime hours. Despite considering other suppliers as early as 1971, Groves continued with Warner based on repeated assurances of improved service. By June 1972, Warner’s performance was so problematic that the Pennsylvania Department of Transportation temporarily halted construction. After a conference, Warner promised to improve, and work resumed. Although Warner’s service improved briefly, it soon returned to being unreliable. By July 1972, Trap Rock, an alternative supplier, had received state certification and agreed to match Warner’s price, but Groves decided to continue exclusively with Warner. The district court found that Warner had acted in bad faith by deliberately overcommitting its resources and following a policy of providing delivery at only 75% of the ordered rate.
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