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Harris Corporation v. National Iranian Radio & Television
United States Court of Appeals for the Eleventh Circuit
691 F.2d 1344 (11sth Cir. 1982)
Harris Corporation (Harris) (plaintiff) contracted with National Iranian Radio & Television (NIRT) (defendant) for the sale of 144 radio transmitters. Bank Melli (Melli) issued a letter of credit in NIRT’s benefit that was payable if Harris failed to perform. Continental Bank (Continental) issued a second letter of credit in Melli’s benefit that was payable if Melli was required to pay NIRT. Harris shipped 138 of the transmitters. The Iranian revolution prohibited delivery of the remaining six, but NIRT and Harris continued to negotiate how to deliver the remaining equipment. After Iranian militants took 52 American hostages at the United States Embassy, NIRT ceased communications with Harris. Melli then tried to collect under Continental’s letter, because NIRT sought payment from Melli due to Harris’s failure to perform. Harris sued in United States district court to enjoin Melli’s payment to NIRT. Harris argued the injunction was proper, because the contract terminated under a force-majeure provision, and NIRT was committing fraud in the transaction. The district court granted a preliminary injunction, and NIRT appealed.
Rule of Law
Holding and Reasoning (Hill, J.)
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