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Pacific Coast Engineering Co. v. Merritt-Chapman & Scott Corp.
United States Court of Appeals for the Ninth Circuit
411 F.2d 889 (1969)
Merritt-Chapman & Scott Corporation (Merritt) (defendant), the general contractor for a new dam, subcontracted with Pacific Coast Engineering Company (Paceco) (plaintiff) to design the dam’s gate hoists. Paceco submitted its designs, which Merritt rejected because they did not conform to specifications. Paceco agreed to modify the designs but demanded more money to do so. Merritt said that, under the contract, modifications did not entitle Paceco to extra compensation. Paceco offered to negotiate, but only as to the exact amount it wanted Merritt to pay. After several months of back-and-forth correspondence, Paceco finally told Merritt it would not proceed with the modifications until Merritt agreed to meet Paceco’s stipulated price for the design modifications. Merritt cancelled Paceco’s contract. Paceco sued Merritt for breach of contract. The trial court denied Paceco’s claim for damages and granted Merritt’s counterclaim for the cost of subcontracting the hoist work to another company. Paceco appealed to the Ninth Circuit.
Rule of Law
Holding and Reasoning (Carter, J.)
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