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Delchi Carrier SpA v. Rotorex Corp.

United States Court of Appeals for the Second Circuit
71 F.3d 1024 (1995)


Facts

Rotorex Corp. (Rotorex) (defendant) agreed to sell 10,800 compressors for use in Delchi Carrier SpA (Delchi’s) (plaintiff) line of air conditioners. Rotorex sent Delchi a sample compressor and written performance specifications. Rotorex shipped the first portion by sea on March 26 and a second portion on May 9. Before the second shipment arrived, Delchi determined that the compressors did not conform to the specifications. Delchi asked Rotorex to supply new compressors, but Rotorex refused. Delchi cancelled the contract and suffered a loss in sales volume. Delchi sued Rotorex for breach of contract and the judge found in Delchi’s favor. The judge awarded damages to Delchi for lost profits, expenses incurred in attempting to remedy the nonconformity, the cost of expediting shipment replacement compressors, and costs of handling and storing the rejected compressors. The court denied Delchi's claim for damages based on other expenses, including shipping and customs, the cost of parts and tools purchased specifically for use in Rotorex compressors, and labor costs for four days when Delchi's production line was idle because it had no compressors to install. Rotorex appealed the judgment and Delchi appealed the denial of damages.

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Holding and Reasoning (Winter, J.)

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