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Contracts Keyed to Fuller
Teradyne, Inc. v. Teledyne Industries
Citation:
676 F.2d 865 (1982)Facts
On July 30, 1976, Teradyne entered into a Quantity Purchase Contract with Teledyne for the sale of a T-347A transistor test system priced at $98,400 with a $984 discount. When the system was packed and ready for shipment, Teledyne canceled its order. Teradyne refused to accept the cancellation. Teledyne then offered to purchase a different system (a Field Effects Transistor System) for $65,000 instead, but Teradyne refused this offer. After Teledyne’s breach, Teradyne dismantled, tested, and reassembled the T-347A at a cost of $614 and sold it to another purchaser for $98,400. Importantly, Teradyne would have made this second sale even if Teledyne had not breached, meaning Teradyne lost the volume of one sale. Teradyne was a volume seller with the capacity to produce additional units of the equipment. The dispute centered on the proper calculation of damages, particularly which costs should be deducted from the contract price to determine Teradyne’s “profit (including reasonable overhead).”
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