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Turbines Ltd. v. Transupport, Inc.

Nebraska Supreme Court
825 N.W.2d 767 (2013)


Facts

Turbines, Inc. (Turbines) (plaintiff) was a helicopter sales company. A customer in Singapore named Monarch Aviation (Monarch) wanted to purchase a turbine nozzle from Turbines and have it shipped to Malaysia. Not having a nozzle in its inventory, Turbines ordered a nozzle from Transupport, Inc. (Transupport) (defendant). Turbines paid $30,000 for the nozzle, and Transupport shipped the nozzle to Turbines. Turbines then attempted to ship the nozzle to Malaysia, but the nozzle was confiscated by U.S. Customs. U.S. Customs believed that Turbines needed a license to ship the nozzle to Malaysia. After nearly two years, U.S. Customs determined that no license was required, and returned the nozzle to Turbines. During the time that the nozzle was detained at U.S. Customs, Turbines learned that Monarch was illegally rerouting goods to Iran. Knowing this, Turbines could no longer ship the nozzle to Monarch without facing criminal penalties. Turbines returned the nozzle to Transupport and demanded a refund. Transupport sent the nozzle back to Turbines. Turbines sued Transupport, seeking to have its contract with Transupport rescinded, or legally undone. The district court ruled in favor of Turbines. Transupport appealed. The appeals court reversed the district court’s ruling, finding that the evidence did not support rescission. Turbines appealed to the Nebraska Supreme Court. Turbines argued that, under Uniform Commercial Code (UCC) § 2-615, its performance of the Turbines-Transupport contract was excused by impracticability.

Rule of Law

Issue

Holding and Reasoning (Stephan, J.)

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