KLEIN V. PEPSICO, INC.
845 F.2d 76 (4th Cir. 1988)
NATURE OF THE CASE: This was an appeal from an order for specific performance from a
breach of contract action.
FACTS: Klein (P) was in the market for a used corporate jet. P contacted UJS (P1), who
provided information to P about several aircraft including one owned by PepsiCo (D). The
aircraft was inspected and P gave P1 $200,000 as a deposit on the jet, and told P1 to offer
$4.4 million for the aircraft. The offer was made subject to a factory inspection
satisfactory to the purchaser, and a definitive contract. D counter offered with a $4.7
million asking price. Eventually a price of $4.6 million was accepted between P1 and D. P1
then planned to sell the aircraft to P for $4.75 million. This was all confirmed in writing
by telex. Formal contracts were sent to P and D. The jet was taken to inspection and a list
of repairs to be made was completed. In Finding of Fact number 18, JA 85, Judge Williams
declared that a contract had been formed at this point. Eight to eleven cracks on the
turbine blades were discovered. D agreed to pay for the repair to the engine. The plane was
then used to retrieve D's chairman who then asked that the jet be removed from the market. D
refused to tender and refused to negotiate further. D claimed that there was only a mere
discussion. P sued for breach of contract and specific performance. The district court found
that there was a contract as evidenced by the confirming telexes. The court ordered specific
performance after a finding that the aircraft was unique. D appealed.
ISSUE:
RULE OF LAW:
HOLDING AND DECISION:
LEGAL ANALYSIS:
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