Jewell-Rung Agency, Inc. v. The Haddad Organization, Ltd.

814 F.Supp. 337 (1993)

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Nature of the Case

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Facts

P ordered samples of Lakeland men's outerwear from D so that it might seek orders for this clothing from Canadian retailers. D supplied P with the ordered samples, which P used to obtain orders from customers in Canada. P placed an initial purchase order with D for 2,325 garments of Lakeland men's outerwear, having a total listed price of approximately $250,000 in American currency. P had taken orders for 372 of these garments at a wholesale price of $107,506 in Canadian currency. According to P's Complaint, D accepted its purchase order in January 1991 with the understanding that P would obtain an exclusive distributorship of Lakeland outerwear in Canada, but D, after accepting the order, granted a third party, Olympic Pant and Sportswear Co. ('Olympic'), the exclusive right to sell, manufacture, and market Lakeland outerwear throughout Canada. P alleges that D's acceptance of its January 1991 purchase order created a binding contract, which D subsequently breached by failing to fill the purchase order and entering into its exclusive distributorship agreement with Olympic. P further alleges that because it did not learn of D's alleged breach until February of 1991, it was unable to fill its customers' orders for Lakeland goods for the Fall 1991 season or to obtain a substitute line of men's outerwear and, as a result, sustained over $350,000 in damages. D seeks summary judgment with respect to damages on three grounds: (1) P's failure to mitigate damages bars any recovery; (2) P's refusal to cover prohibits recovery of consequential damages; and (3) alternatively, any recovery by P of lost profits must be limited to the profits derived from the orders already placed by P's customers at the time of D's breach of contract.