Eastern Airlines, Inc. v. Mcdonnell Douglas Corp.

532 F.2d 957 (5th Cir. 1976)

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Nature of the Case

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Facts

Eastern (P) contracted with McDonnell (D) to purchase jets. The contract took into account the Defense Production Act; the government could issue orders to manufacturers to give priority to military production. Instead of invoking the DPA provisions, the government made offers to manufacturers they just couldn't refuse; to give the U.S. priority or formal directives would be issued. Deliveries to P were delayed because of this back-door arm-twisting. P sued to obtain damages from D for the late deliveries. The trial court awarded P damages. The trial court found in part that the notice requirement under 2-607 was inapplicable to delivery delays of the type experienced herein because a seller necessarily had notice of such a contract violation. The court held that 2-607 was to inform the seller of hidden defects in his performance. D appealed.