FERTICO BELGIUM S.A. v. PHOSPHATE CHEMICALS EXPORT ASS'N 510 N.E.2d 334 (1987) CASE BRIEF

FERTICO BELGIUM S.A. V. PHOSPHATE CHEMICALS EXPORT ASS'N

510 N.E.2d 334 (1987)

NATURE OF THE CASE: This was a breach of contract dispute and the computation of damages under cover. Fertico (P) sought review of an order by stipulation of judgment absolute, which vacated a damages award against Phosphate (D) on P's action under the Uniform Commercial Code to recover damages related to a breach of a shipping contract.

FACTS: Fertico (P) entered into a contract with Phosphate (D) to purchase two separate shipments of 15,000 and 20,000 tons to be delivered not later than November 20th and 30th, 1978. D knew that P had a contract with Altawreed and that the timely execution of the contract was of great importance. P had secured a letter of credit with respect to the first shipment. D informed P that the first and second shipments would be late. P advised D that the breach of the time in the first shipment created huge problems and P cancelled the second shipment because he needed the materials to be on time. P acquired title to the first shipment because he had no other choice. In an effort to avoid a second breach with Altawreed, P acquired 35,000 tons at a cost of $700,000 more. P then traveled to Iraq and renegotiated its contract with Altawreed. In return for a postponed delivery date and an additional payment of $20.50 per ton, P agreed to make direct inland delivery rather than delivery to Basra. P was left with 15,000 tons of late delivered goods that it was compelled to take because D had received payment from P's letter of credit. P sold the 15,000 tons at a profit of $454,000. P sued D for $1.25 million. The jury gave a verdict to P of $1.07 million. D appealed; the appellate court ordered that the increased transportation costs were not consequential damages, that the higher price paid by Altawreed was an expense saved as a consequence of D's breach, and that the damages must be reduced by the profit of the later resale of the 15,000 tons. P appealed.

ISSUE:

RULE OF LAW:

HOLDING AND DECISION:

LEGAL ANALYSIS:

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