Chase Precast Corp. v. John J. Paonessa Co.
Supreme Judicial Court of Massachusetts
566 N.E.2d 603 (1991)
The Massachusetts government entered into two contracts with Paonessa (defendant) for resurfacing and improving highways and replacing the grass median strips with concrete surfacing and median barriers. Paonessa entered into contracts with Chase (plaintiff) under which Chase was to supply the median barriers. When the highway project began, Massachusetts began receiving complaints about the removal of the grass median strip from residents, who subsequently filed an action in court to halt the project. Expecting that Massachusetts would have to change the contract in light of the litigation, Paonessa asked Chase to stop producing the barriers, and Chase did so, though it had already produced about one-half the order and had delivered most to the site. Paonessa paid for all barriers produced. As a result of the litigation, Massachusetts deleted the median barriers item from the contracts with Paonessa. Chase brought an action to recover its anticipated profit on the balance of the barriers called for by the contracts. Paonessa brought a cross action against Massachusetts for indemnification in the event it should be held liable to Chase. The Superior Court judge ruled for Paonessa on the basis of impossibility of performance. Chase and Paonessa cross-appealed. The Appeals Court affirmed but noted that the doctrine of frustration of purpose more accurately supported the judgeâ€™s decision. Chase appealed.
Rule of Law
Holding and Reasoning (Lynch, J.)