Dist. Ct. did not err in finding in favor of plaintiff after bench trial in action that sought recovery for costs incurred by plaintiff-buyer in supply contract, where plaintiff’s costs arose out of buying from third-party carbon black to replace carbon black that defendant would have supplied to plaintiff under instant supply contract, and where defendant had failed to give plaintiff adequate assurance of its future performance under section 2-609 of Uniform Commercial Code. Defendant conceded that it had attempted to impose price increase on carbon black during lifetime of supply contract, and that such conduct gave plaintiff reasonable grounds of insecurity for purposes of section 2-609. Moreover, record showed that: (1) plaintiff placed orders for black carbon at contract price, and defendant did not respond to said orders; (2) plaintiff wrote letter to defendant to say that it expected defendant to abide by contract price; and (3) individuals at defendant subsequently told plaintiff that it could not guarantee shipment of carbon black under plaintiff’s purchase orders or confirm any future shipment dates. Also, defendant hedged as to whether it would actually fill plaintiff’s orders and continued to demand that plaintiff accept defendant’s price increase. As such, plaintiff could treat defendant as having repudiated contract, so as to allow it to look elsewhere for supplier of carbon black and seek difference between cost of carbon black supplied by third-party and cost of carbon black under supply contract.
Federal 7th Circuit Court
Civil Court
Uniform Commercial Code