Reliance Cooperage Corp. v. Treat

In July 1950, Reliance Cooperage Corporation (Reliance) (plaintiff) entered into a contract with A.R. Treat (defendant) in which Treat agreed to produce and deliver 300,000 “white oak bourbon staves” not later than December 31, 1950. Staves are often used to make liquor barrels bound by wooden or metal hoops. The contracted price was $450 per thousand. Sometime in August 1950, Treat informed Reliance by letter and telephone that he repudiated the contract. Thereafter, Reliance wrote Treat and informed him that they were not confident Treat would perform under the agreement, but they were looking forward to his compliance with the agreement and would hold him to the contract’s terms. Treat never responded to Reliance’s letter and never delivered any staves. Reliance filed suit against Treat for damages. At trial, the evidence showed that the market price for staves on December 31, 1950, was more than the contract price but not in excess of $750 per thousand. At the close of the evidence, the trial court denied Reliance’s request for an instruction that it was entitled to recover the difference between the contract price of the staves and the market price of similar staves on December 31, 1950. Instead, the court instructed the jury that Reliance owed a duty to mitigate its damages by purchasing the staves elsewhere. The jury returned a verdict for Reliance and assessed damages at $500. Reliance appealed.