Louisiana Power & Light Company v. Allegheny Ludlum Industries, Inc.

517 F.Supp. 1319 (1981)

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Nature of the Case

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Facts

P and D entered into a contract where D agreed to supply condenser tubing to P. for use at LP&L's Waterford 3 nuclear power plant. The contract, dated February 8, 1974, was accepted by D in Mid-March of 1974. The total price was $ 1,127,387.82. If P delayed shipment beyond August 31, 1976, but not later than January 31, 1977, the contract price would be increased by three percent (3%). A further adjustment at the rate of ten percent (10%) would take place if P delayed shipment beyond January 31, 1977, but not later than January 31, 1978. No other escalation clauses were included in the contract. On May 19, 1975, D sent a letter seeking 'additional compensation.' D claimed that subsequent to the formulation of the contract its 'costs (had) risen at such a high rate that escalators built into our contracts have in no way adequately compensated for them. The price of electrolytic nickel had increased 24%, low carbon ferrochrome 185% and labor 21%.' P refused to raise prices. D informed P that D might be well advised not to perform under the contract. P demanded written assurances within thirty days under 2-609. As of January 19, 1976, P had not received any assurance of performance and on January 30, 1976, P notified D by letter that it considered the contract repudiated. D wrote to P stating it would perform but at $1.80 per pound which was the full cost of producing the material. P rejected the offer. P solicited bids from other vendors and entered into a contract at a price of $1,729,278. P sued D for the cost of cover. D testified that performance of the contract would have caused D to sustain a projected loss of $428,500 on the contract and reduced the planned profit from $1,018,000 to $589,500. D has defended based on commercial impracticability, mutual mistake, unconscionability and alleged bad faith conduct by P. P moved for summary judgment.