Cosden Oil & Chemical Co. v. Karl O. Helm Aktiengesellschaft
United States Court of Appeals for the Fifth Circuit
736 F.2d 1064 (1984)
Anticipating increases in the market price for polystyrene, Karl O. Helm Aktiengesellschaft and its wholly owned subsidiary Helm Houston (Helm) (defendants), agreed to purchase polystyrene from Cosden Oil & Chemical Company (Cosden) (plaintiff) in four orders. Cosden notified Helm, after a delivery in January in partial fulfillment of the first order, that the remaining portion would be delayed. A short time later, Cosden cancelled the remaining portion of the first order as well as the remaining three orders because two of Cosden’s plants were down and it lacked the product to complete the remaining orders. Since Helm had not paid for the January delivery, Cosden sued to collect payment for the product that had been delivered. Helm counterclaimed for damages arising from Cosden’s cancellation. During the time following Cosden’s cancellation, the market price for polystyrene continued to climb. The district court determined Helm’s damages to be $628,676, the difference between the contract price and the market price a commercially reasonable time after Cosden’s repudiation of the contract. Cosden was awarded $355,950 as an offset for the polystyrene that had been delivered. Both parties challenged the district court’s calculation of damages for anticipatory repudiation on appeal.
Rule of Law
Holding and Reasoning (Reavley, J.)
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