United States v. Wegematic Corp.
United States Court of Appeals for the Second Circuit
360 F.2d 674 (2d Cir. 1966)
The Federal Reserve Board (The Board) (plaintiff) invited manufacturers to submit proposals for computing systems. Early delivery was identified as a key consideration in selecting the best proposal. Wegematic Corp. (Wegematic) (defendant) submitted a detailed proposal for a new computer, which it claimed was "a truly revolutionary system utilizing all of the latest technical advances," and offered delivery nine months from the date the contract or purchase order was received. The Board ordered the computers and Wegematic accepted. Wegematic subsequently twice delayed shipment and ultimately cancelled the contract, citing “engineering difficulties.” The Board filed suit, and the court awarded it liquidated damages under the contract, damages for the excess cost of procuring replacement equipment, and for preparatory expenses. Wegematic appealed.
Rule of Law
Holding and Reasoning (Friendly, J.)
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