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Contracts Keyed to Fuller
Thermo Electron Corp. v. Schiavone Construction Co.
Citation:
958 F.2d 1158 (1st Cir. 1992)Facts
In early 1980s, Schuyler Investments, through its subsidiary Schuyler Long Beach, began developing a waste-to-energy facility. By 1985, S & S had secured a site lease, negotiated contracts for garbage disposal and electricity sales, obtained necessary permits, and arranged financing through a letter of credit secured by Schiavone’s guarantee. On January 28, 1986, S & S signed an agreement to sell the project to Thermo for $1 million, with payment to be made in two installments upon completion of specified conditions. During subsequent negotiations, complications arose regarding permit transfers, and Thermo submitted draft agreements containing terms that deviated from the original contract. On March 17, S & S demanded that the transaction close by March 25, 1986. When this deadline was not met, S & S began negotiating with Montenay, ultimately selling the project to them in May 1986. Montenay later resold the project at a profit of $1.85 million. Thermo sued for breach of contract, claiming S & S had no right to sell to Montenay.
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