Magnet Resources, Inc. v. Summit Mri, Inc.

723 A.2d 976 (1998)

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Nature of the Case

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Facts

P contracted with D to provide preventive maintenance and emergency repair services for the MRIs. The charge was $120,000 for the first year and $150,000 annually for subsequent years of the contract. Payments were to be made monthly in advance, beginning with the fourth month of the contract. D's monthly payments were habitually late. P complained that seven of P's checks had been dishonored. P then required that payments more than ten days late would have to be made by certified check, the provision of the service contracts imposing a surcharge for late payment would be enforced, and neither essential supplies nor emergency service would be provided except under special arrangements if an invoice was late by thirty days or more. On December 20, 1994, D requested repair service for its Jersey City installation. P declined to provide the service because D then owed it $35,000. D promised that if the necessary work was done, P would get 'most of the money by the end of the week.' In reliance on that promise, D installed a necessary piece of equipment from its inventory for a total charge of $8,750. D did not pay anything. D called P on the weekend requesting immediate emergency service butt under its service contract, D was entitled to service only from Monday through Friday. D did not make the emergency repair. On Tuesday, December 27, D still had not paid its outstanding bills. That day, D urgently requested service. P informed D it would not respond because of failure to pay overdue bills. P canceled the contract. D sued for breach and was awarded $492,320.00. P counterclaimed for breach of contract and was awarded $18,470.00. P and D appealed.