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Contracts Keyed to Templin
Sons of Thunder, Inc. v. Borden, Inc.
Citation:
148 N.J. 396, 690 A.2d 575 (1997)Facts
Donald DeMusz initially worked for Borden as a boat captain before forming multiple corporations to work with Borden. After successful collaborations, Borden and DeMusz negotiated a contract whereby Sons of Thunder would purchase a second boat to supply clams to Borden. The contract required Borden to purchase at least 240 cages (7,680 bushels) of clams weekly and would automatically renew for up to five years unless terminated with 90 days’ notice. DeMusz secured financing for the boat based on Borden’s assurances about the contract’s duration. After changes in Borden’s management, new executives refused to honor the minimum purchase requirements despite knowing Sons of Thunder needed the revenue to repay its loans. Borden eventually terminated the contract with proper notice but had consistently failed to purchase the required minimum quantities throughout the contract term. The jury found that while Borden had the right to terminate, it breached the implied covenant of good faith and fair dealing in its performance of the contract.
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