New York Central Ironworks Co. v. United States Radiator Co.

66 N.E. 967 (1903)

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New York Central Ironworks Co. v. United States Radiator Co.

New York Court of Appeals
66 N.E. 967 (1903)

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Facts

United States Radiator Co. (Radiator) (defendant) entered into an executory contract with New York Central Ironworks Co. (Ironworks) (plaintiff). Under the contract, Ironworks agreed to buy all the radiator equipment it needed for 1899 from Radiator, and Radiator agreed to meet Ironworks’ 1899 radiator requirements at predetermined prices. After the contract was made, the market price of iron increased significantly, and consequently, the value of goods made with iron, including radiators, also increased significantly. The Ironworks-Radiator contract therefore provided Ironworks with an advantage over competitors because Ironworks was acquiring radiators from Radiator at a fixed price. Radiator supplied Ironworks’ radiator needs until it had delivered 48,000 feet of radiation. This was the most Ironworks had required in any previous year. However, Ironworks sent additional orders that would have brought the yearly total to over 100,000 feet of radiation. When Radiator refused to fill the additional orders, Ironworks sued Radiator for breach of contract. The trial court held in Ironworks’ favor and awarded significant damages. Radiator appealed to the New York Court of Appeals.

Rule of Law

Issue

Holding and Reasoning (O’Brien, J.)

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